If the world were merely seductive, that would be easy. If it were merely challenging, that would be no problem. But I arise in the morning, torn between a desire to improve the world and a desire to enjoy the world. This makes it hard to plan the day... EB White
Friday, October 18, 2013
Beyond GDP: How might we best measure what matters in our society?
Aggregate counts of economic activity like gross domestic product, or GDP, give all activity equal value. The cultivating of an urban farm, which may involve little paid work and consume few bought materials, is less “productive,” in GDP terms, than paving that farm over.“When grain prices go up, that’s good for GDP but terrible for hunger,” says Joshua Farley, a professor in community development and applied economics at the University of Vermont. ”GDP is an excellent measure of cost; a terrible measure of benefit.”To even start a new conversation, we need new measurements. As the Business Alliance for Local Living Economies (BALLE) puts it, it’s time to start “measuring what matters.”
Farley’s been involved in studies of Burlington, Vermont, using a ‘genuine progress indicator,’ a version of the index of sustainable economic welfare that looks at a community’s overall well-being. There are many variations of these alternative indicators. Though most still equate value with consumption and growth, some include factors that GDP leaves out — like the value of unpaid household and volunteer work — and factor in the cost of pollution, depletion of resources and the consequences of uneven distribution of wealth.
We don’t yet measure the real costs of these problems in the United States, because, for example, we tend to under-price energy, transportation and education and pay no tax on environmental pollution.
According to Robert Reich, former US labor secretary and a professor at the University of California, Berkeley, “A true tally of all that might reveal the value of being more local.”