Stiglitz, Sen, and Sarkozy propose alternatives to GDP

Stiglitz, Sen, and Sarkozy propose alternatives to GDP
Karl Bakeman
16.09.10

In 2008, the French government created the Commission on the Measurement of Economic Performance and Social Progress. The commission, chaired by Joe Stiglitz, are searching for alternatives to GDP. Many social scientists are critical of using GDP as a measure, because it is imprecise. GDP also encourages developed countries to chase economic growth at all costs. However, according to many psychologists, sociologists, and economists economic growth has a limited relationship to happiness or social well-being. The commission writes:

For example, traffic jams may increaseGDP as a result of the increased use of gasoline, but obviously not the quality of life.Moreover, if citizens are concerned about the quality of air, and air pollution isincreasing, then statistical measures which ignore air pollution will provide an inaccurateestimate of what is happening to citizens’ well-being. Or a tendency to measure gradualchange may be inadequate to capture risks of abrupt alterations in the environment suchas climate change.

The panel argues that we should measure both current well-being and sustainability, and they made 5 recommendations:

Recommendation 1: When evaluating material well-being, look at income and consumption rather than production

Recommendation 2: Emphasise the household perspective

Recommendation 3: Consider income and consumption jointly with wealth

Recommendation 4: Give more prominence to the distribution of income, consumption and wealth

Recommendation 5: Broaden income measures to non-market activities

You can read the full commission report here. http://templatelab.com/rapport-anglais/

Here is video of the presentation of the commissions findings. http://video.minefi.gouv.fr/dynamic/catal/datasheet.php?clef=AlHglQQiEPaztE6BDTkq&idProg=ucMr2OKNeeasr7J0Tuvy&idSess=0i74brj4o1vj356x7rn97&lang=Fr

You can also see a short interview with some of the panelists here. http://www.time.com/time/business/article/0,8599,1923330,00.html