Gross Domestic Product – was never intended to gauge anything other than how much money was changing hands. Yet we routinely use economic growth as shorthand for how well a country is doing. Natural disasters, oil spills, car crashes, riots, crime: anything you pay to fix will boost GDP. Helping a neighbor up the stairs, skipping work to watch your son’s little League gam,e strolling in the woods won’t. GDP tallies the value of an item, but not the environmental cost of its production: pollution, carbon emissions or the depletion of minerals and ecosystems. GDP counts napalm and the cost of a nuclear warhead, and armored cars for police to fight riots in our streets. 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.
GDP doesn’t even consistently measure what actually gets done. Did you pay a cleaning company to clean your floors? Congratulations, you’ve added to this year’s numbers. Did you scrub them yourself? Sorry, you haven’t. Buying eggs from a factory farm: a GDP boost. Raising chickens in your backyard: nope.
An overreliance on GDP is not just misleading. It’s harmful. Focusing on economic growth blinds policy-makers to other measures of progress. If a policy is going to hurt GDP then it’s difficult for that policy to survive. Despite its flaws, GDP has proved hard to replace – if only beause it provides a single number which nations can use to measure themselves against neighbors nd rivals.