BEYOND GDP TO BETTER WAYS OF JUDGING PROGRESS AND WELL-BEING

by Hazel Henderson
Monday, August 01, 2011
Inter Press Service

At last there seems to be real progress in overhauling the Gross Domestic Product (GDP) as measure of a country's status and progress -almost twenty years after 170 governments pledged to do so by signing Article 40 of Agenda 21 at the 1992 Rio Conference, writes Hazel Henderson, author of Ethical Markets: Growing the Green Economy and president of Ethical Markets Media (USA and Brazil).

In this article, the author writes that it's about time. Since 2007 and the Beyond GDP conference in the European Parliament, surveys in 12 countries show wide public support.

The inventor of the GDP system of national accounting, Simon Kuznets, warned that it was never intended to measure overall progress. Its one-size-fits-all focus on priced output of goods and services is akin to overflying a country at 50,000 feet. While it simplified the math, the aggregation and over-averaging of data obscures important aspects of national progress and human development: education, health (both treated as "consumption" in GDP rather than key investments), the state of infrastructure and the environment. Many of these key indicators are still treated as "externalities" (like pollution) in economics and company balance sheets, and are passed on to taxpayers and future generations.

The most significant new effort is that of the OECD, which announced its Better Life Index in 2011. It uses as indicators housing, income and wealth, jobs, community, education, environment, governance, health, life satisfaction, safety, work-life balance.

BEYOND GDP TO BETTER WAYS OF JUDGING PROGRESS AND WELL-BEING

Where next?

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BEYOND GDP TO BETTER WAYS OF JUDGING PROGRESS AND WELL-BEING

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