From today’s New York Times: A Nobelist Joins Those Pursuing Well-Being Over Growth
A Nobel laureate, Joseph E. Stiglitz, has joined the circle of economists convinced that the world needs new ways of measuring progress as human numbers and appetites butt up against the planet’s limits and old economic models have hit some speed bumps.
In The Financial Times yesterday, Dr. Stiglitz, who teaches at Columbia University, outlined the results of a study he and other economists conducted for President Nicolas Sarkozy of France providing advice on a basket of measurements that might better reflect whether a country is advancing the quality of lives while not diminishing the environment. Mr. Sarkozy embraced the findings and called on France’s econometric bureaucracy to shift how it assesses progress and on world leaders and international institutions to do the same.
9/14 NYT article: G.D.P. Seen as Inadequate Measure of Economic Health
G.D.P. is the measure of the market value of all the goods and services produced in the economy… [and] has been described as one of the most important advances in macroeconomics.
However, there has long been criticism that, while it accurately captures the growth or contraction of the overall economy, it is a crude tool for describing social health.
The Stiglitz commission report, known formally as “The Measurement of Economic Performance and Social Progress Revisited,” said that one of the most glaring problems with using economic growth as a proxy for well-being was the fact that it excluded the damage to society and ultimately to the economy of environmentally non-sustainable activities.
Mr. Sarkozy created the commission in February 2008, only the latest initiative to take on the issue. The Organization for Economic Cooperation and Development and the European Commission are also considering new economic measures.
Rock on France. I am very impressed with this new wave of thinking.
Interestingly I’d approached Professor Stiglitz’s office to see if he’d be available to join us at Web 2 Summit this year but was told he had a pre-arranged international engagement that would keep him occupied and unavailable. Now I understand why…