Measuring progress with GDP is a gross mistake | Science Matters | David Suzuki Foundation
Photo: Measuring progress with GDP is a gross mistake

We deserve better indicators of societal well-being that extend beyond mere economic growth.

By David Suzuki

Governments, media and much of the public are preoccupied with the economy. That means demands such as those for recognition of First Nations treaty rights and environmental protection are often seen as impediments to the goal of maintaining economic growth. The gross domestic product has become a sacred indicator of well-being. Ask corporate CEOs and politicians how they did last year and they'll refer to the rise or fall of the GDP.

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It's a strange way to measure either economic or social well-being. The GDP was developed as a way to estimate economic activity by measuring the value of all transactions for goods and services. But even Simon Kuznets, an American economist and pioneer of national income measurement, warned in 1934 that such measurements say little about 'the welfare of a nation.' He understood there's more to life than the benefits that come from spending money.

My wife's parents have shared our home for 35 years. If we had put them in a care home, the GDP would have grown. In caring for them ourselves we didn't contribute as much. When my wife left her teaching job at Harvard University to be a full-time volunteer for the David Suzuki Foundation, her GDP contribution fell. Each time we repair and reuse something considered disposable we fail to contribute to the GDP.

To illustrate the GDP's limitations as an indicator of well-being, suppose a fire breaks out at the Darlington nuclear facility near Toronto and issues a cloud of radioactivity that blows over the city, causing hundreds of cases of radiation sickness. All the ambulances, doctors, medicines and hospital beds will jack up the GDP. And if people die, funeral services, hearses, flowers, gravediggers and lawyers will stimulate GDP growth. In the end, cleaning up the Darlington mess would cost billions and produce a spike in the GDP.

Extreme weather-related events, such as flooding and storms, can also contribute to increases in GDP, as resources are brought in to deal with the mess. Damage done by Hurricanes Katrina and Sandy and the BP oil spill in the Gulf of Mexico added tens of billions to the GDP. If GDP growth is our highest aspiration, we should be praying for more weather catastrophes and oil spills.

The GDP replaced gross national product, which was similar but included international expenditures. In a 1968 speech at the University of Kansas, Robert Kennedy said, "Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things ... Gross national product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities ... and the television programs which glorify violence in order to sell toys to our children.

"Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile."

We deserve better indicators of societal well-being that extend beyond mere economic growth. Many economists and social scientists are proposing such indicators. Some argue we need a 'genuine progress indicator', which would include environmental and social factors as well as economic wealth. A number of groups, including Friends of the Earth, have suggested an Index of Sustainable Economic Welfare, which would take into account "income inequality, environmental damage, and depletion of environmental assets." The Kingdom of Bhutan has suggested measuring gross national happiness.

Whatever we come up with, it has to be better than GDP with its absurd emphasis on endless growth on a finite planet.

February 27, 2014
http://www.davidsuzuki.org/blogs/science-matters/2014/02/measuring-progress-with-gdp-is-a-gross-mistake/

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15 Comments

Jul 24, 2014
12:19 AM

The GDP is admittedly a poor measure of progress and development as you detail in your post. However, when providing for an alternative, one should not cite Gross Hapiness Index or some such thing which important as they are can not be measured and are open to the criticism of being subjective. Instead we should measure things that give a true picture of human welfare. For a developing country these would include: i) Life expectancy, ii) opportunity for educational achievement, iii) Access to affordable healthcare, iv) percentage of cities having adequate sanitation / public transportation / footpaths / sewage treatment, v) levels of inequalities, vii) crime levels, viii) gender bias ix) degree of compliance with existing national environmental laws, and so on. Each one of these gives a true and direct picture of wellbeing unlike national income. The statement ‘Environmental compliance increased by 5%’ is an objective reflection of an area of wellbeing than the dubious ‘Our GDP is on a high growth trajectory’.

Some of these indices are being already measured, but unfortunately don’t have the same place in public policy as the hallowed GDP.

Mar 26, 2014
9:40 AM

@Marie-Odile Liu,

Thanks for your interest in reading the column in French. We translate some columns into French, but it sometimes takes a bit longer. You can find the French versions at:

http://www.davidsuzuki.org/fr/blogues/la-science-en-action/

For more information, or to inquire about offering translation services, you can contact our Quebec office: http://www.davidsuzuki.org/fr/fondation/contact/

Thanks again.

Ian Hanington Senior Editor The David Suzuki Foundation

Mar 13, 2014
1:08 PM

Ginger, In a world where the people making the most money are those producing the least or in many instances nothing at all, and the runners up are those in the most polluting industries, it’s clear the time to rethink the economy has long past.

Economics as a discipline, does not inform us what our industry should produce. Profits can be made in many ways and growth can occur without jeopardizing the environment we depend on for survival.

Mar 09, 2014
9:20 AM

Suzuki has stooped to new depths in this article slamming economic growth as if it’s a bad thing. He truly is attacking Stephen Harper’s good record on the economy. Nothing does well if the economy is bad. Everyone benefits when the economy is good.The radical environmentalists do way more harm than good, but Suzuki won’t admit that. He’s part of the Gaia worshipping cult. He’s been making tons of money preaching the fake global warming gospel, while making it sound like people making money is almost a crime. The earth is not dying

Mar 08, 2014
11:49 AM

David, Another great article. It takes an important point and focuses solely on it to really drive it home. More of this is needed.

However, it does make an assumption. It assumes that we ‘should’ measure these things. For to do so, makes them into a competition and we all know where that leads. Instead, maybe the government could have it’s meter on this, that and the other. The financial industry could have another set. The energy industry, the pharma, agriculture and all the others could also be measured in an isolated manner. This way, when one is seen by the public as making profit yet their environmental measure is falling, public sentiment would follow that and do so appropriately for that industry. Same goes for the others as well as the government.

It’s not an easy subject when politics and international finance gets involved but if you want to hear more, I urge you to contact me. I’m a member of a group of companies that are solving these and many other global problems with massive ground-up solutions. We could sure use a couple connections that would be a phone call away for you. If nothing else, it would be an enjoyable eye opener to what’s coming.

Mar 05, 2014
10:06 PM

Suzuki says it like it is-straight and true ! Too many people don’t have the guts to come out and say it, even though they agree. Of course, it certainly helps when this comes from an individual who has the stature of Suzuki. So if you do agree,at least come out and support him !

Mar 03, 2014
8:53 AM

There is a Canadian index of Wellbeing: https://uwaterloo.ca/canadian-index-wellbeing/. This index and others like it provide a more meaningful measure of a society’s well being by including social, community and environmental factors.

Feb 28, 2014
10:56 PM

Hi. This is a wonderful article. Will make it available to all of my first year economics students.

Feb 28, 2014
10:32 PM

I couldn’t agree more with you. This whole idea about economical growth at all costs has got to stop. The big corporations have way too much power in the scheme of things, with their endless butchering of the environment, I wonder if we are going to survive for very long. People need to wake up, the mainstream news always downplay how serious this is becoming. We need more “David Suzukis” in the political arena… I cheer for you and the Green Party of course

Feb 28, 2014
6:48 PM

I always thought GDP stood for Gross Destructive Piffle

Feb 28, 2014
2:44 PM

I think David is bang on the nose about the GDP, it’s absolutely perverted the way we measure our progress in our economy. Of course if we don’t deal with climate change soon we won’t have to worry about the economy because there won’t be one. Our governments will be bankrupt trying to deal with all the extreme weather events.

Feb 28, 2014
11:20 AM

The world is in disarray thanks to those politics, but no, they keep going deeper while trying to calm the population with false promises — but what am I talking about? — it’s the same since man decide to tell their neighbours to “do this… or else…”. But now it’s with a bigger threat for humankind and (their?!)… our dying planet, that’s on what our kids will have to survive :(

Feb 28, 2014
8:42 AM

Thank you David Suzuki. You’ve written another thoughtful and wise piece. It has inspired me to write:

Unlimited growth and voracious consumption is a recipe for a future that is dark and uncertain. Unlimited war and voracious imperialism is the same.

Feb 28, 2014
8:07 AM

This is a beautiful analysis of the GDP measuring bias. As a French-speaking Canadian, though, I would have loved to read it in French — I can’t find it in your French website, which is mostly devoted to Quebec matters. Any possibilities you have your general-interest blogs published in English and French at the same time?

I take this opportunity to propose my service: I am a retired federal translator (English to French) and I’d love to translate your analyses.

Marie-Odile Liu

Feb 28, 2014
7:50 AM

If the state spends on things that move us in directions benefiting the environment, health, and other things that increase our general happiness and, taxes things that don’t, we could still employ the concept of growth to measure our progress even as the nature of our traded products and services change.

Environment vs the economy and jobs is a false dichotomy and the straw man of choice among those resisting change. Poor economic policy choices make for unhappy future economic outcomes.

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