Business Day: ‘The value of an endlessly expanding GDP is doubtful’

Published in Business Day, 24 April 2014

THE speed at which a country’s gross domestic product (GDP) is growing has for the past 60-70 years come to be considered the most important measure of whether a country is succeeding or failing. But what if our most cherished notions about what makes a nation successful are wrong? What if economists who lead the obsession with this metric are, in fact, charlatans?

There have been some very prominent critics of our obsession with GDP growth.

In 1968, Robert Kennedy noted that GDP includes the costs of air pollution, road accidents, managing crime, militarism and environmental destruction, but does not include the “decency of our factories and the safety of our streets alike … the beauty of our poetry, or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials”. He concluded that GDP “measures everything, in short, except that which makes life worthwhile”.

Former French president Nicolas Sarkozy pointed out in 2009 how GDP figures have come to be widely misused: “GDP statistics … are increasingly thought of as a measure of societal wellbeing, which they are not.” Continue reading Business Day: ‘The value of an endlessly expanding GDP is doubtful’

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