But as we start to comprehend the twin facts that oil is likely to become ever harder and more resource intensive to come by, and that the Earth and its atmosphere does not have a limitless capacity to absorb the crap we pour into it, the cult of economic growth at all costs starts to look a little shaky. Luckily, there are plenty of alternatives to the cult of GDP.
In our society today, economic measurements dominate the debate. We are talking about how much our economies grow, how much debt a nation has and what the employment ratio is. You may come up with some other economic metrics yourselves.
To avoid confusion, this is not the production of all people with the same nationality. This corrected GDP is a metric that captures the real expansion of creation of goods and services very well. It includes the production of consumer goods and services, government spending and even investment goods.
Do we all use the same definition of GDP?
Several of the G20 economies have modified their definition of what GDP consists of over the last few years, all suggesting growth of their economies. There is nothing wrong with that per se but it does render comparing economies impossible.
It is like comparing apples with bananas. Finally, in the EU, several countries also added parameters to the equation. We will not tell you what they added yet; read on to find out. Do we measure GDP accurately today?
In order to be able to come to a correct figure, one needs to receive the correct data.
This is where things go wrong. So, it is an educated guess at best. The economic infrastructure varies vastly across the world and not every country is able to gather all numbers, as you need a generally recognised central government to be able to report all statistics.
Thirdly, some components of the GDP equation are not objectively measurable. Does GDP contain everything that increases quality of life?
Provided one agrees with the fact that are economy should be designed to propel us forward, does the GDP metric take into account the things we find valuable? So, the first question we need to ask is: There are also some paradoxes in the GDP calculation. For instance, we do not economically value the hours we care for our children, while if we hire a babysitter or nanny this is considered to be valuable and part of the equation.
If you have children, you know how valuable spending time with them is. It is a service you provide to another person. You are just not getting formally paid for it. Does it measure what we want?
The general public is so used to hearing about GDP that we do not reflect on its contents or its goal anymore. We need to ask ourselves the question: GDP does not measure fairness nor the sustainability of the actual production.
It may sound a bit cynical: In healthcare, people need to be treated more because pollution makes them sick. We also sell more medicine. In technology, we aspire to develop new clean technology to solve the pollution problem, hence creating new industries.
In financial products, we created an emission trading system to pay for the possibility to exhaust greenhouse gases.Nov 12, · The shortcomings of GDP, as a measure of what we want from an economy, are not a new discovery.
The NEF and others have been making the case for years.
But while various proposals for alternatives have engaged the interest of policymakers and technocrats, they have not yet taken hold among politicians. Sep 20, · The shortcomings of GDP, as a measure of what we want from an economy, are not a new discovery.
But what are the alternatives? The idea that our real well-being can be measured by Gross Domestic Product is as pervasive as it is destructive. Here are some alternatives to the cult of GDP. Gross domestic product—the sum of the goods and services produced by a nation—is an insufficient measure of national economic performance, according to a new report from the World Economic.
When analyzing people's well-being there are other indicators beyond purely economic ones. Do you want to know them? Is a person’s well-being solely a function of their economic circumstances? Are inhabitants of countries with a higher GDP (Gross Domestic Product) per capita happier because of.
Imagine if a corporation used Gross Domestic Product (GDP) accounting to do its books: it would be adding all its income and expenses together to get a final number. (GNH) as an alternative to.