Toronto Star: There's more to life than GDP

There's more to life than GDP
Canadians need a new, holistic measure of societal progress that goes beyond economics

Jun 10, 2009 04:30 AM

Roy Romanow


For many years – and particularly since the onset of the global recession – Canadians and people around the world have been bombarded with news about the gross domestic product. Numbers have been issued and then updated. Predictions have been made and then revised. So powerful and predominant has GDP become, that the New York Times referred to it as "a celebrity among statistics, a giant calculator strutting about adding up every bit of paid activity ..."

But what is GDP? What does it tell us about how well or poorly we are doing as a society? More important, what does it leave out? And what are the consequences of this omission?

GDP is simply the value of all goods and services produced in a country in a given year. It was first introduced in the U.S. during the Great Depression as a way of measuring how much and how quickly the U.S. economy was shrinking. Over time, GDP has emerged as a surrogate for wellbeing, something it was never designed to be. Even the "father of the GDP," Nobel laureate Simon Kuznets, recognized that "the welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP."

GDP makes no distinction between economic activities that are good for our wellbeing and those that are harmful. Spending on tobacco, natural and human-made disasters, crime and accidents, all make GDP go up. Conversely, the value of unpaid housework, child care, volunteer work and leisure time are not included in GDP because they take place outside of the formal marketplace. Nor are subtractions made for activities that heat up our planet, pollute our air and waterways or destroy farmlands, wetlands and old-growth forests. The notion of sustainability – ensuring that precious resources are preserved for future generations – doesn't enter the equation. .........(more)

The complete piece is at: http://www.thestar.com/comment/article/648141

"Nor are subtractions made for activities that heat up our planet, pollute our air and waterways or destroy farmlands, wetlands and old-growth forests. The notion of sustainability – ensuring that precious resources are preserved for future generations – doesn't enter the equation."

Canada ranks 3rd

US ranks 15th

:kick:

my bad. :blush:

Like the "happiness index" or "satisfaction index".

The GDP is for lazy economics reporters and bad politicians. It neither reflects the true state of bad news nor records good social trends.

think of the joke about how bill gates walks into an auditorium full of ordinary people and suddenly, the average net worth in the room is many millions of dollars.

gdp can be increasing overall while some sectors or regions are in decline. they call this a rolling recession.

most notably, from 1933-1941, aside from a brief recession in 1938, gdp rose yet unemployment remained stobbornly high. for one thing, the gdp rise merely meant things didn't suck as much as they did the previous year; for another thing unemployment may have come down a bit but if it's still ridiculously high at doesn't really feel any better. in any event the gdp gains were clearly not shared with those remaining unemployed.

However, that's not a good sign for a society.

actually are becoming our downfall, not our salvation.