Change In How We Figure GDP Might Change Environmental Debate

As pointed out by the Harvard Business Review in its January-February issue, "Since World War II, gross national product and its replacement, gross domestic product, have been the chief measures of national success." That measuring stick of economic progress is under fire from many environmental and nonprofit groups who feel that it is a flawed method by which to measure actual, productive economic activity.

Harvard Psychology Professor Daniel Gilbert, among others, has championed the fact that happiness should also be included in any analysis of a nation's wealth, even that concept can be attacked as more subjective than the amount of unpaid household rent that is currently included in GDP or GNP. These same commentators are also calling for inclusion of data measuring economic and environmental sustainability, as well as educational achievement and life expectancy.

Too often, it has been written, GDP can not distinguish between economic activities that actually increases a nation's wealth and one that pollutes or uses unrenewable resources for temporary economic advantage. This so-called "Green GDP", championed by Joseph Stiglitz, suggests that sustainability estimates are no more speculative than some of the estimates now included in current GDP, arguing that, "Taking into account resource depletion and some aspects of sustainability is fairly easy."

The U.N. , in measuring its top countries for human development, includes three basic aspects of quality of life: health and longevity, knowledge, and income. In that index, Norway, Australia, and the Netherlands all finish above the U.S. It is all something to think carefully about as we plot the nation's future economic and social programs going forward.