Is GDP the right way to measure progress? One economist says no (Dan O’Neill) | Drew Nelles | March 22, 2013 | The Globe and Mail

Should economic activity be measured as positives minus negatives, as Dan O”Neill (U. Leeds) says, in a Genuine Progress Indicator?

At the moment, our main economic indicator is GDP – gross domestic product. This is simply a measure of money changing hands in the economy. If I go out and buy a beer a pub in Edinburgh, this contributes to GDP. If I buy a bicycle, it also contributes to GDP. If the government invests in education, this contributes to GDP.

But the problem is that if there’s an oil spill off the coast of Mexico or the U.S., this also contributes to GDP. If we have more crime in society and pay to deal with it, this contributes to GDP. If we have more war, it contributes to GDP. Our main indicator of economic progress doesn’t distinguish between beneficial economic activity and dysfunctional economic activity.

One way we could fix that is by something called the Genuine Progress Indicator, which is a measure that separates the good stuff from the bad stuff and sees how they compare over time. Another area that’s been suggested is a completely different set of national counts, where we start to measure quality of life through surveys of happiness, well-being, life satisfaction and so on.

Is GDP the right way to measure progress? One economist says no (Dan O’Neill) | Drew Nelles | March 22, 2013 | The Globe and Mail at http://www.theglobeandmail.com/report-on-business/economy/is-gdp-the-right-way-to-measure-progress-one-economist-says-no/article10242590/.

Is GDP the right way to measure progress? One economist says no - The Globe and Mail