Time to dethrone GDP as a measure of national success, researcher says

Jan 16, 2014 by Amelia Bidgood

(Phys.org) —Gross Domestic Product is a misleading measure of national success, say ANU experts.

In a commentary piece for the latest edition of Nature, Crawford School of Public Policy's Professor Robert Costanza and Dr Ida Kubiszewski have urged all countries to establish new metrics to assess social well-being.

Costanza says that Gross Domestic Product (GDP) is no longer an effective way of measuring the success of a country.

"When it was instituted seven decades ago, GDP was a relevant signpost of progress," said Costanza.

"Increased economic activity was credited with providing employment, income and amenities to reduce social conflict and prevent another world war. But the world today is very different compared to how it was then.

"GDP measures mainly market transactions. It ignores social costs, environmental impacts, and ," he said.

Costanza says that the time has come for change and that GDP should be replaced by the new metrics connected with the United Nations' Sustainable Development Goals (SDGs).

"The chance to dethrone GDP is now in sight," he said.

"By 2015, the United Nations is scheduled to announce the SDGs, a set of international objectives to improve global well-being.

"Developing integrated measures of progress attached to these goals offers the global community the opportunity to discuss what sustainable well-being means, how to measure it, and how to achieve it."

Costanza added that if a successor to GDP isn't created and changes aren't made, the effects will be detrimental for the future of the world.

"Failing to make changes will condone growing inequality and the continued destruction of the natural capital on which all life on the planet depends."

Explore further: Economic development can only buy happiness up to a 'sweet spot' of $36,000 GDP per person, study finds

More information: Read the full Nature article at www.nature.com/news/developmen… e-gdp-behind-1.14499

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antialias_physorg
4.2 / 5 (5) Jan 16, 2014
I guess we could do worse that adopting the system Bhutan has: Gross National Happiness.

Though we might augment it with some metric for measuring sustainability/future impact of current policies (e.g. it was easy in the past to get a high GDP if one doesn't care that this is bought at the cost of catastrophic damage to the environment and low GDP due to needed cleanup costs years down the road)

Costanza added that if a successor to GDP isn't created and changes aren't made, the effects will be detrimental for the future of the world.

I fear that changing the metric won't change much in that regard - as those who contributed to the GDP aren't the policy makers. Unless policy makers get serious on improving their nation's SDG it'll be: bsuiness as usual. And with politicians being bought and sold I don't see how any of them would care about the SDG.
shavera
3 / 5 (2) Jan 16, 2014
It's the same as the Official vs. Supplemental Poverty Measures in the US. OPM is a terrible reflection of reality. Yet we can't change away from it, lest A) poverty "increases" under the change, and thus poverty "increased" under president X's watch. Or B) poverty "decreases" under the change, and thus president X is accused of manipulating the data to their advantage. Entrenched measures are very difficult to remove.
ryggesogn2
2.6 / 5 (10) Jan 16, 2014
Socialism destroys liberty and prosperity so stop measuring liberty and prosperity and socialism will succeed.
nevermark
5 / 5 (2) Jan 16, 2014
In addition to taking into account environmental changes, the right measure should also include governmental debt. Debt clearly can help increase GDP temporarily, but must be paid for out of future GDP. A year in which GDP is high but government adds a significant new debt burden might sensibly be considered a bad economic year overall due to governmental mismanagement.
dogbert
3.3 / 5 (7) Jan 16, 2014
Socialism destroys liberty and prosperity so stop measuring liberty and prosperity and socialism will succeed.


You don't change anything by looking away. GDP is a real measure which reflects prosperity or lack thereof.

Measuring social redistribution is no improvement and can only hide the reality that it fosters an ever decreasing standard of living.
antialias_physorg
3.3 / 5 (6) Jan 16, 2014
GDP is a real measure which reflects prosperity or lack thereof.

However if it is the prospertity of few - is that a situation to aspire to? To take it to an extremen: If you have one very rich person but millionsof poor ones is that better than millions of well-off people? Even if the cumulative wealth is less in the latter case?
And is either of these a situation to aspire to if it means that you can only gain it at the cost of impoverished future generations?
dogbert
2.8 / 5 (9) Jan 16, 2014
antialial_physorg,
However if it is the prospertity of few - is that a situation to aspire to? To take it to an extremen: If you have one very rich person but millionsof poor ones is that better than millions of well-off people? Even if the cumulative wealth is less in the latter case?


A rising tide lifts all boats. Capitalism creates wealth for those who are not wealthy. But socialism is killing opportunity. The goal of socialism is not to make everyone's lives better, but to make everyone equally miserable.

And is either of these a situation to aspire to if it means that you can only gain it at the cost of impoverished future generations?


Again, it is socialism which is impoverishing us and burdening our grandchildren with massive debt. Socialists today are not content with redistributing wealth, they are also borrowing money from other countries and printing money with nothing at all to back that money.

Returners
2.6 / 5 (5) Jan 16, 2014
Again, it is socialism which is impoverishing us and burdening our grandchildren with massive debt. Socialists today are not content with redistributing wealth, they are also borrowing money from other countries and printing money with nothing at all to back that money.


I think you have a very warped view of how things work in the U.S. Depending on who's number you use, 10% of people own 90% of the accumulated wealth.

That's beyond "unfair" guy. That's just plain evil.
dogbert
1.8 / 5 (5) Jan 16, 2014
That's beyond "unfair" guy. That's just plain evil.


No, it is not unfair or evil that there are rich people in the world. There always have been rich, poor and everything in between. What is unfair and bordering on evil to to remove the opportunities for advancement so that the poor stay poor and the people who are neither rich nor poor are spiraling into poverty due to redistribution and job stagnation.

America has always been the land of opportunity. Where is that opportunity since Obama took office? It is being systematically eliminated.
ryggesogn2
2.3 / 5 (6) Jan 16, 2014
However if it is the prospertity of few

It is under socialism.

10% of people own 90% of the accumulated wealth.

Thanks to 'progressive'/socialist crony 'capitalism', which is evil.
ryggesogn2
1.8 / 5 (5) Jan 16, 2014
Use the Index of Economic Freedom as the measure of national success.
http://www.heritage.org/index/

Or this:

http://www.cato.o...orld/map

Or this:

"Economic freedom is one of the main drivers of prosperity, resulting in improved wealth, health, and education as individuals and families take charge of their own future."
http://www.fraser...dom.aspx
antialias_physorg
4.2 / 5 (5) Jan 17, 2014
A rising tide lifts all boats.
That's the same argument as 'trickle down' economics (read: 'piss on' economics). Has that worked? All indicators say: no.
Capitalism creates wealth for those who are not wealthy.

Numbers of poor speak a different language. Wishful thinking does not facts make.

The goal of socialism is not to make everyone's lives better, but to make everyone equally miserable.

The goal of socialism is to make everyone's life better (the goal of capitalism is to make only those lives better of the one's who 'succeed', BTW -so capitalismis definitely the worse proposition of the two).
Whether that works with pure socialism I have my doubts. But as always you're playing a false dichotomy here. There are an infinite amount of ways to mix some capitalist approaches with some socialist approaches to curb the worst excesses of each.
antialias_physorg
5 / 5 (4) Jan 17, 2014
A rising tide lifts all boats.

To put it more succinctly: A rising tide lifts those who have boats. Everybody else drowns.
Wolf358
5 / 5 (1) Jan 17, 2014
GDP has never been an accurate measure of economic activity; it replaced Gross National Product which included all the money we now _waste_ on military activity, but which the government prefers we don't notice.
ryggesogn2
1 / 5 (3) Jan 17, 2014
The goal of socialism is to make everyone's life better

Socialists claim this is their goal yet it fails making everyone's life equally miserable, except those few on the socialist committee.
The goal of capitalism is to create opportunities for individuals to create wealth and prosper with the unintended consequence of increasing the wealth for all.
Both are well documented to be true so why support socialism?
Socialists are greedy and envious and would rather pull everyone down rather than allow some to be very successful, to make life 'fair'.
ryggesogn2
1 / 5 (3) Jan 17, 2014
"If income inequality is the problem, then income equality is the goal. From each according to his ability, to each according to his need, to coin a phrase (or to each according to his or her fanciful desires, if we are to adopt the Sandra Fluke addendum to the original Marx).

Are we to have a government committee to insure that the corporate CFO with the 10th floor corner office makes the same as the security guard sitting in the ground floor lobby? Should universities add what the full professor of women's studies and the janitor in her building make and pay them both half the total? "
"Envy's accompanying emotion is resentment. Which is exactly what the hustlers retailing income inequality want from the marks. "
"A few more years under policies brought about by those who whine about income inequality and we'll have real income equality. "
http://spectator....elusions
MR166
2 / 5 (4) Jan 18, 2014
What socialists hate and fear the most is individual freedom!!!! That is why they are so convinced that totalitarian ways are the true path to nirvana.
Shakescene21
1 / 5 (1) Jan 19, 2014
No experienced economist thinks that GDP (or any other statistic) can measure "national success". GDP is a half-decent measure of the value of economic output of a country. It's important to measure GDP in a standardized and accurate way to keep track of economic output and growth. Similarly, there are other measurements of unemployment, inequality, air quality, sustainability, health, water pollution, etc. I don't think there's any way to combine all these measurements into a single number or index that would could be usefull as a measure of "national success".
Back in the Sixties there was a lot of enthusiasm for this idea -- you can Google "Toward a National Report" to see a large and failed attempt at a broad-based replacement for GNP. The social sciences just can't deliver the precision and rigor that physical scientists expect.
ryggesogn2
1 / 5 (1) Jan 20, 2014
"If you are looking for a good escape hatch for when the U.S. is completely ruined or searching for a great country to start a business, the report can help you out. It is also an important piece of evidence about the economic importance of economic freedom.

The Economic Freedom of the World report measures economic freedom in five areas: the size of government, the legal system and property rights, the soundness of money, the freedom to trade internationally, and the amount of regulation. "
http://www.realcl...849.html
antialias_physorg
5 / 5 (1) Jan 20, 2014
What socialists hate and fear the most is individual freedom!!!!

Multiple exclamation marks. The sure sign of a diseased mind
-- Terry Pratchett

But seriously: Socialist value freedom just as much as capitalists (Maybe even more so, as they don't value their freedoms at the expense of others. So while there is certainly a drive towards freedom by the individual in capitalism it's always at the cost of the freedom of all others).

Socialism, capitalism, communism,...whatever: These are economic systems. They have nothing whatsoever to do with the notion of how freedom-loving the indiviudual subscribing to them is.
ryggesogn2
1 / 5 (1) Jan 20, 2014
Socialist value freedom just as much as capitalists

So why do socialists use state power to take away liberty?

Socialism/communism/fascism are economic systems controlled by the state, not by free individuals.
ryggesogn2
1 / 5 (1) Jan 20, 2014
drive towards freedom by the individual in capitalism it's always at the cost of the freedom of all others

How does the success of an individual in a free market system limit the freedom of anyone?

MR166
3 / 5 (2) Jan 20, 2014
"So while there is certainly a drive towards freedom by the individual in capitalism it's always at the cost of the freedom of all others)"

When the Pilgrims first settled in the US they had a socialist system where everyone shared equally in what was produced. The system was a dismal failure and things did not get better until the people benefited directly from their own labors.
ryggesogn2
3 / 5 (2) Jan 20, 2014
In a free market system, the role of the state is to protect the property rights of ALL individuals and not plunder anyone.
In a socialist/communist/fascist system, the role of the state is to violate the property rights of some, or all, and must engage in plundering some or all.
antialias_physorg
5 / 5 (1) Jan 20, 2014
So why do socialists use state power to take away liberty

Do you really equate money with liberty? Really? Wow....just....wow.

But lets examine that twisted piece of logic for a sec: If money is liberty then capitalism is the least free system of all, as it concentrates wealth in the hands of few and makes everyone else poor.
How does the success of an individual in a free market system limit the freedom of anyone?

By your logic: If all have X dollars. But person Y just acquires more dollars he's:
a) taking dollars from others (as wealth doesn't appear out of thin air)
b) if a) does not apply then he's increasing inflation (devaluing everyone else's wealth, because wealth is relative, not absolute)

In each case it's acuisition of 'freedom' at the cost of everyone else.

By your own logic: socialism is the system where everyone is equally free.
ryggesogn2
3 / 5 (2) Jan 20, 2014
Do you really equate money with liberty?

No.
Why do socialists?
By your logic: If all have X dollars. But person Y just acquires more dollars he's:
a) taking dollars from others (as wealth doesn't appear out of thin air)


This is fixed pie, socialist 'logic', not mine.
ryggesogn2
1 / 5 (1) Jan 20, 2014
Socialists can't seem to comprehend the concept of liberty. Here is a definition:
"Liberty means to exercise human rights in any manner a person chooses so long as it does not interfere with the exercise of the rights of others. "
"Understanding how governments always compete with liberty and destroy progress, creativity, and prosperity is crucial to our effort to reverse the course on which we find ourselves. The contest between abusive government power and individual freedom is an age-old problem. The concept of liberty, recognized as a natural right, has required thousands of years to be understood by the masses in reaction to the tyranny imposed by those whose only desire is to rule over others and live off their enslavement."
http://archive.le...734.html
And apparently too many who post here don't understand, or want to accept, liberty. Either they are afraid of the responsibility or want the power to rule over others.
Modernmystic
3 / 5 (2) Jan 20, 2014
Why are we still having this argument about socialism vs. capitalism with respect to material prosperity. It's not even worth debating.

North vs South Korea
USSR vs USA
Eastern vs Western Europe
Communist China vs Modern China

It's like debating the color of the sky. Capitalism DOES beat socialism every single time and in every instance and culture it's been applied to in the history of the world with respect to developing an efficient economy and a higher standard of living...period. Now money does NOT buy you happiness, so ALL OF YOU quit comparing apples to oranges...
Modernmystic
1 / 5 (1) Jan 20, 2014
Do you really equate money with liberty? Really? Wow....just....wow.


Who's more free, someone who can start a business with only one hoop to jump through or twenty? Someone who has cereal AND milk at the local supermarket or just milk (cereal might be available next week)? Someone who gets to decide which services they will or won't buy or someone who has that decision made for them? These are, of course, COMPLETELY rhetorical questions because economic freedom absolutely does translate into political freedom. Economic choices make up a HUGE number of choices any individual has in any society, if you don't see that then...wow...just WOW....

My wife does inter-cultural work for a living. It's heartbreaking to see someone from a former Soviet block country come into a Wal-Mart and literally break down and start to cry at the sheer numbers of choices they have. It doesn't exist in their world....
MR166
1 / 5 (1) Jan 20, 2014
The most basic principle of socialism is to reward individual failure as much as individual exceptionalism. Everyone wants to protect those, who through no fault of their own, are incapable of helping themselves. The problem with socialism is that it creates a whole segment of society that does not know how to support itself and that feels that the rest of us owe them their survival.
ryggesogn2
3 / 5 (2) Jan 20, 2014
And another reason many socialists refuse to accept liberty is they can't, or won't, understand the individual human rights are inherent and unalienable, not handed down by any state or any other individual human tyrant. While this may have been the historical pattern of individuals, or a gang of individual, tyrannizing and enslaving other humans, it doesn't make it valid or true.
Following the reason of Locke and others, the authors of the Declaration of Independence stated as an axiom that all humans are created equal with inherent, unalienable rights to life, liberty and property.
Socialists reject this axiom, as they must, otherwise they can't justify violating the rights of individuals.
ryggesogn2
3 / 5 (2) Jan 20, 2014
Everyone wants to protect those, who through no fault of their own, are incapable of helping themselves.

This is the function of society, not the state.
Modernmystic
3 / 5 (2) Jan 20, 2014
This is the function of society, not the state.


Yes, but you see that's one of the difficulties with a socialist society. In order to be completely self consistent with their own philosophy (which almost no one is anyway to be fair) socialists are unable to make a distinction between the two. The state becomes everything, it IS society.

So you saying that "society" and "the state" ought to have different and distinct roles is a concept outside their philosophy. They may understand the concept, but they reject the very premise on every level. So you have to start at a more basic level and convince them that the two ARE in fact distinct, if you can get that far you might have a chance to convince them of what one or the other "ought" to do...
ryggesogn2
3 / 5 (2) Jan 20, 2014
socialists are unable to make a distinction between the two. The state becomes everything, it IS society.

Agreed.

So you have to start at a more basic level and convince them that the two ARE in fact distinct,

There is no chance to convince the die hards, but pointing out how socialist must violate individual rights to redistribute wealth may be a start.
Obamacare is doing a fine job demonstrating how socialism violates rights to redistribute wealth. But the socialists are now expanding the pool of the plundered to what was once called the 'middle class' and the dependent class is growing out of control.
ryggesogn2
3.7 / 5 (3) Jan 20, 2014
What I find puzzling is the support so many who claim to be rational and scientific give to socialism.
Data over thousands of years show how socialism fails to improve the liberty and prosperity of people.
If these 'rational' socialists are truly rational, then they don't want individuals to have liberty or to prosper.
I'll give some socialists the benefit of the doubt and for some reason they are irrational and do want people to have liberty and prosperity and have been duped into beleiving socialism can improve liberty and prospertiy
But, more than likely, while these irrational scientists acknowledge and accept physical laws, they somehow believe they don't apply to human society and can engineer and design a society they believe to be superior. "If only those unruly individuals would listen to us, we wouldn't have to resort to force to create Utopia."
Even more ironic, most of these socialists are atheist yet expect socialist leaders act like angels to bring heaven on earth.
The Shootist
3 / 5 (4) Jan 20, 2014
"income inequity"

ah, yes. Institutionalized envy.

what a maroon.
MR166
1 / 5 (1) Jan 20, 2014
"Even more ironic, most of these socialists are atheist yet expect socialist leaders act like angels to bring heaven on earth."

Socialists are worse than atheists, they are anti-god because they want total power over mankind. They need their system to be the single entity to tell everyone how to act and what to think.
ryggesogn2
3 / 5 (2) Jan 20, 2014
"Even more ironic, most of these socialists are atheist yet expect socialist leaders act like angels to bring heaven on earth."

Socialists are worse than atheists, they are anti-god because they want total power over mankind. They need their system to be the single entity to tell everyone how to act and what to think.


Yes, and every time socialism fails, the excuse given is the leadership was corrupt. The leaders were not perfect. By this measure, socialism will only be successful when Christ returns.
MR166
3 / 5 (2) Jan 20, 2014
The socialist heroes like Mao, and Stalin have killed more people than all of the world wars combined yet they are looked upon as the "Saints" of the socialist movement. Castro is a virtual god. Here in the US, the politicians, courts, media and educational bureaucracy is doing everything possible to turn God into a four letter word.
ryggesogn2
1 / 5 (1) Jan 20, 2014
"Hollande dropped an economic bombshell: After a year and a half in office, Hollande announced that France should consider lowering taxes on businesses and, gasp, reducing government spending. To round out his heresy, Hollande cited Say's Law that "supply creates its own demand" (well, at least Jean-Baptiste Say was French). He suggested that France might want to consider supply-side factors, like improved incentives, labor market reform, and business-friendly tax rates."
http://www.forbes...-france/
Socialism is great until you run out of other people's money.
ryggesogn2
3.7 / 5 (3) Jan 20, 2014
"Well, if we survey Europe from Hollande's elegant desk in the in l'Elysée, we understand why he is looking for a Plan B.

First, his 75 percent tax on incomes above a million Euro is just going into effect after surviving a court challenge, but the flight of the richest French movie stars, fashion designers, perfume magnates, and industrialists has already hurt France's image as a place to do business. The millionaire tax, it is conceded, will, at best, raise a symbolic amount for the French treasury. So much for the rich paying for France's rejuvenation."
"Despite steady increases in public spending, France has averaged a zero percent growth rate since 2007 and currently is either not growing or, worse, slipping into a double dip recession. "
http://www.forbes...-france/

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