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GDP and its Enemies: the Questionable Search for a Happiness Index

01 September 2010

The financial crisis and global warming have led to a crisis of confidence in our traditional ways of measuring wealth because they do not take speculative risk and environmental costs into consideration. A number of alternative indexes have been proposed that would measure people’s well-being and the environmental sustainability of the planet.

Even though the gross domestic product (GDP) measure has its problems, a look at the alternatives reveals that they are constructed with a specific political agenda in mind and are easily manipulated by governments.

In fact, a strong argument for sticking with GDP is that it is narrow in scope and value free. It tells us what we can do, but not what we should do, and does not even try to define well-being. It fits a liberal, pluralistic society where people have different interests, preferences and attitudes to well-being. Our present environmental and financial problems can and should be solved within the intellectual framework of economic growth.

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