Economic statistics are a critical tool for managing the complex world we live in. The principal indicator has been a measure of national income, “Gross Domestic Product” or “Gross National Product”, and both are reported as aggregate and per person data. There are complexities to GDP calculation, but it is the number politicians, investors and others point to when comparing national performance. Although it seemed to be an all encompassing data point, GDP is a sterile number and does not indicate quality of life, prospects or externalities which impact the world. These weaknesses have been ignored perennially because it is inconvenient to have to develop new ones. But these are needed.
There are alternatives. Calvert-Henderson Quality of Life Indicators, an analysis of twelve dimensions, has been a useful standard for many years now, but remains underutilised by developed economies and communities. Genuine Progress Indicator is a direct competitor to GDP developed since the late 1990s. It attempts to include environmental and social factors which are ignored by GDP. In the late noughties the EU initiated development of new metrics “Beyond GDP“, though that is still on the drawing board.
Though we see GDP growth , other measures paint a more sanguine picture and draw attention to the pollution of environment and society that is not included in standard measures. These other measures are another warning that humanity needs to change its priorities if it is to provide space for nature to regenerate and our home, Earth, to survive in a state fit to support people.
Ethical Corporation: GDP v GPI – What price progress?