Replacing GDP
The always excellent Fat Knowledge has a good catch.
Nobel Prize-winning economist Joseph Stiglitz has suggested a replacement for GDP. I’ve long been down on GDP as a measure for human progress (or happiness), and so I can easily get behind efforts like this:
Long the standard scorecard for any national economy, GDP has become deficient as a measure of long-term economic health in our resource-driven, globalizing world.
Think about it. It’s like grading a corporation based on one day’s cash flow and forgetting to depreciate assets and other costs.
That’s why economists looking for an alternative accounting framework to supplement the use of GDP are considering a new measure: green net national product.
The “green” means that GDP must be reduced to take into account the depletion of natural resources and the degradation of the environment – just as a company must depreciate both its tangible and intangible assets. “Net” national product (NNP) means that there has to be an adjustment for the depreciation of the country’s physical assets.
This makes more sense to me than no-growth initiatives. Those folks seem to, very strangely, endorse GDP as a measure, and then plan for “no growth” around it.
I think Stiglitz, and people like Thomas Homer-Dixon are on a better footing.