Moving Beyond GDP

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GDP measures the total monetary value of goods and services pro-

duced within our national borders in a given period. GDP has become synonymous with the broader welfare 

and progress of society, and our entire economic policy framework and 

economic debate have come to revolve around the goal of maximizing the 

growth rate of GDP. From promoting credit-fueled consumerism, to sub-

sidies for sprawl and deforestation, to deregulating capital and financial 

flows, to the relentless pursuit of cheap, dirty energy with high environ-

mental costs, GDP growth has become the unchallenged standard and 

guiding idea in most of our policy-making, politics, and public debate about economic development.

Earlier this month, a group of economists gathered at the annual meeting of the American Economic Association to discuss the U.S. Bureau of Economic Analysis, which for over 75 years, has been tracking GDP, or Gross Domestic Product. GDP is the total monetary value of all the goods and services produced by a country within a given period of time.

One of the panelists was the Nobel Prize-winning Princeton economist Angus Deaton, who has spent the last few years researching the rising numbers of “deaths of despair,” which is when struggling people die from self-inflicted causes, like suicide and drug overdoses. “Life expectancy has fallen for three years in a row,” Deaton said. “One of the major drivers of that is the opioid epidemic, which has so far killed over 200,000 Americans.” Pharmaceutical companies, he said, have made billions off this epidemic. “We’ve got a system that’s really killing people—and we’re counting that money as part of GDP. That’s gotta be crazy.”

According to co-chairs of the OECD-hosted High Level Expert Group on the Measurement of Economic Performance and Social Progress, Joseph E. Stiglitz, Jean-Paul Fitoussi and Martine Durand, show how over-reliance on GDP as the yardstick of economic performance misled policy makers who did not see the crisis coming. When the crisis did hit, concentrating on the wrong indicators meant that governments made inadequate policy choices, with severe and long-lasting consequences for many people. While GDP is the most well-known, and most powerful economic indicator, it can’t tell us everything we need to know about the health of countries and societies. In fact, it can’t even tell us everything we need to know about economic performance. We need to develop dashboards of indicators that reveal who is benefitting from growth, whether that growth is environmentally sustainable, how people feel about their lives, what factors contribute to an individual’s or a country’s success. Advancing Research on Well-being Metrics Beyond GDP, presents the latest findings from leading economists and statisticians on selected issues within the broader agenda on defining and measuring well-being.

Shoaib Habib Memon

Mr. Shoaib Habib Memon MA LLB is Global Goodwill Ambassador Pakistan, humanitarian,Social Worker,Development Professional

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Shoaib Habib Memon

One thought on “MOVING BEYOND GDP

  • Franca Colozzo

    Thank you for your meaningful article, Shoaib habib Memon. The problem is that while that kind of short-term economic system seemed to work right after the Second World War, due to the total breakdown and the desire for recovery, today the conditions seem to have changed.
    The growing introduction of consumer goods on the planet also due to the exponential growth of the world population (especially in Asian countries) has made the ecosystem unlivable. The insane environment generates diseases, states of anxiety and depression, as well as deaths from cancer.
    Pollution of the air, land, sea has become unsustainable and has led us to run for cover and think about other long-term systems. A form of slowing down the consumerist frenzy of today, especially in the USA, Europe and now China. We talk only about GDP and not about the inseparable unity of body and soul in man, almost as if talking about the soul is an emotional female issue. The denialism of the soul means not believing in creativity and imagination, two elements necessary for innovation. Those who do not dream, even the impossible (and to dream it is necessary to have emotions) cannot create. Einstein was a great dreamer who opened the human mind to worlds unthinkable before.

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