The limits of GDP

Recently the world economic forum has, in collaboration with the UK national statistics office, devised five measures of growth that are better than GDP. These are:

  • Good jobs
  • Wellbeing
  • Environment
  • Fairness
  • Health

In my mind, these are not better than GDP since they seem open to wide interpretation (my idea of fairness may be very different to yours, etc).

However, after reading GDP: A brief but affection history the limitations of GDP as a catchall statistic of the progress of a society were made clear and I think it is right that alternative measures are investigated.

The approach I like would be to have a dashboard of non-partisan factors of societal well-being each backed by a set of maybe 3 – 5 well-defined statistics. For example, the factors could be:

  1. Economy
  2. Education
  3. Environment
  4. Health
  5. Security
  6. Environment

The “Economy” factor could then be supported by combining statistics on for example GDP per capita, inflation and unemployment rates.

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