Down with the GDP
In the November, 2009 edition of The Atlantic, Megan McArdle reminds us why we need to wean ourselves of using the GDP as an indicator of economic health. Here’s a sample:
GDP does not, and cannot, reflect the waste of enormous effort, and precious natural resources, that went into building something that suddenly no one wants. Moreover, it misses many other aspects of our existence. Strip-mining a picturesque mountaintop, or clear-cutting a primeval forest, shows up in GDP only as a boost to output. Meanwhile, in India’s national accounts, all of Mother Teresa’slabors among the poor would have had only the most minimal possible impact. GDP can record how much money we spend on health care or education; it cannot tell us whether the services we are buying are any good.
So how do you accurately measure a nation’s health? One alternative is the HDI.
Using GDP as a measuring tool goes back to a lack of education in real economics. Hell, an old econ 101 lesson is in order.
http://en.wikipedia.org/wiki/Parable_of_the_broken_window
Spot-on observation by Monbiot.com:
“Though we know they aren’t the same, we can’t help conflating growth and well-being. Last week, for example, the Guardian carried the headline “UK standard of living drops below 2005 level”(3). But the story had nothing to do with our standard of living. Instead it reported that per capita gross domestic product is lower than it was in 2005. GDP is a measure of economic activity, not standard of living. But the terms are confused so often that journalists now treat them as synonyms. The low retail sales of previous months were recently described by this paper as “bleak”(4) and “gloomy”(5). High sales are always “good news”, low sales are always “bad news”, even if the product on offer is farmyard porn. I believe it’s time that the Guardian challenged this biased reporting.”
http://www.monbiot.com/archives/2010/01/04/consumer-hell/?utm_source=feedburner&utm_medium=email
[...] topic: Down with the GDP! Related posts:Sponsoring a government religion without calling it government-sponsored [...]