14 September 2009

Let's transcend the obsession with economic growth - Stiglitz et al. recommend to go beyond GDP

"Well-being is more than money", a saying that could come from the Dalai Lama but in this case it is the essence of a recent report done by a group of 22 leaders. The group comissioned by French president Sarkozy included Nobel economics prize winner Stiglitz, and Nobel Prize winner Amartya Sen who helped create the U.N. Human Development Index.

"The report, delivered to Mr. Sarkozy on Monday, recommends shifting the emphasis from GDP, which measures economic production, to well-being and sustainability. "GDP statistics were originally introduced to measure market economic activity," Mr. Stiglitz said. "But they are increasingly thought of as a measure of societal well-being, which they are not. … Our economy is supposed to increase our well being; it is not an end in itself."

The report suggests looking at household income, consumption and wealth rather than production in the economy as a whole for a better reflection of material living standards... More prominence should be given to the distribution of income and wealth, as well as to access to education and health, the report said, adding that attention should also be given to whether countries are over-consuming their economic wealth and damaging the environment.

The report also recommends that indexes should integrate complex realities, such as crime, the environment and the efficiency of the health system, as well as income inequality."

Read on at Wall Street Journal

Personally, I believe we would benefit tremendously by 'updating' our 'success metrics'. How can we continue to count car accidents, bombs etc. as a positive on our national production measurement? How can we continue to believe that the more and faster the better? Let's support this more holistic way of measuring our well-being!

If you think the recommendation from the Stiglitz-commission doesn't go far enough, maybe we should go to adopt Bhutan's GHI, Gross National Happiness.