Gross Domestic Problem: The Politics Behind the Worlds Most Powerful Number (Economic Controversies)
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In this category, we find a long tradition of thought in economics seeking to improve GDP by adding measures of economic welfare and genuine progress.
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Championed by progressive environmental economists, these approaches have become rather common also among governmen- tal institutions, especially the UN and the World Bank. Although useful, this approach does not call into question the underlying assumptions of GDP growth and its political agenda. Finally, some proposals have been more radical, disputing whether economic growth is an acceptable goal in its own right and arguing that, instead of trying to complement or improve GDP, policies should be based on a completely different understanding of well-being.
Such reforms have been put forward mainly by civil society groups and progressive think-tanks, with the support of a handful of progressive governments. This indefatigable production of alternative indicators has progressed in parallel with an international public debate char- acterized by heated confrontations regarding the scale and signifi- cance of environmental degradation and the policies needed to address it. Finally, two Earth Summits, in Rio de Janeiro in and in Johannesburg in , marked the process that eventually led to the entry into force of the Kyoto Protocol in , currently the only existing global agreement on climate change.
Although playing a leading role in the early negotiations under President Clinton, the US never officially signed the protocol, which was actively opposed during the two tenures of George W.
Development Statistics and Information
Emerging economies such as China, India, Brazil and South Africa broke ranks, thus sinking hopes that a new agreement would be reached any time soon. The debate on alternative measures to GDP has mirrored the contradictions of the global debate on sustainability. Significant steps forward were taken in times of progressive environmental politics, almost invariably followed by setbacks and regressions as soon as more conventional economic concerns took centre stage. Improving or replacing GDP? They saw no direct effect of defence expenditures on economic welfare. For most of the s and s, the economist Robert Eisner championed the call for a general reform of national account- ing in the US.
Similarly, most work-related spending by households e. TISA also acknowledged the importance of non-market outputs, many of which are produced within the household sector. As a consequence, it incorporated the value of, among other things, meal preparation, house cleaning and painting, as well as care of the young and elderly. Through his recalculations, Eisner found that the reiterated claims made in the business press that the US government invested too little in the economy were grossly unfounded and that, by contrast, indiscriminate cuts in federal spending to eliminate the budget deficit could reduce public investment in transportation, education, new technologies and the like.
The overall performance of the US economy was, once again, supported by households, which dipped into their savings, and got further indebted. For instance, Eisner did not include the value of leisure time in his estimate of non-market output, ignored issues associated with em- ployment both the personal satisfaction of being productive and also dissatisfaction with poor working conditions and neglected fundamental income distribution problems.
It initially covered the period — Acknowledging their intellectual debt to Nordhaus and Tobin, Daly and Cobb argued that it is the current flow of services to humanity from all sources, not just the output of marketable commodities, which is relevant to economic welfare. An additional deduction from the welfare calculation was the cost of air, water and noise pollution.
The depletion of natural assets was another set of concerns ad- dressed by Daly and Cobb. They estimated and deducted the annual loss of productive services associated with the past and present conversion of wetlands and farmland to urban uses. Moreover, they believed that the marginal annual loss of benefits would rise with cumulative land conversion. As a consequence, their accounting methodology ensured escalating aggregate costs of land development as time unfolded.
Extraction of non-renewable energy in the forms of oil, coal, natural gas and nuclear fuel was another category of natural capital deple- tion incorporated in the GPI. This monetization procedure invariably led to the para- doxical consequence that losses in terms of natural assets could be easily offset by equal or greater gains in terms of human-built capital. Animated by honest ecological concerns and the legitimate conviction that what is not monetized is generally considered free or worthless , the approach of measuring all types of resources in terms of money has continued until the present day, producing all sorts of paradoxes and distortions.
Besides the GPI, a number of alternative indicators have been proposed throughout the years by a variety of think-tanks, invest- ment funds, NGOs and foundations. Several efforts to measure not just the level of income but also how it is distributed and uti- lized were undertaken throughout the late s and s. Published for the Overseas Development Council in the mids, the PQLI combined three basic indicators of well- being: infant mortality, life expectancy at the age of 1, and basic literacy.
A more ambitious but perhaps less compelling effort to measure well-being was represented by the Human Suffering Index. Originally published by the Population Crisis Committee in , the HSI used a set of ten — rather disparate — indicators to measure social well-being, including calorie supply per capita, access to drinking water, telephones per capita, political freedom and civil rights, inflation and GDP. Precisely because it dispenses with income as an indicator, the BCI has proved to be highly correlated with measures of other human capabilities and, in particular, has shown a high degree of correlation with the indicators designed to track progress towards the Millennium Development Goals, the most far-reaching set of global standards sponsored by the UN.
The Legatum Institute, a London-based think-tank connected to the Legatum investment group, has been publishing a Prosperity Index since with a coverage of countries. On the environmental front, the best-known index is probably the ecological footprint, developed in the early s by a Ph. The set of measurements officially called national footprint accounts was launched in , with information drawn from the Food and Agriculture Organization, the UN Statistics Divi- sion, and the International Energy Agency, plus various studies published in peer-reviewed scientific journals.
In , the network launched a lobbying campaign with the goal of insti- tutionalizing the ecological footprint in at least ten key national governments by So far, more than twenty nations have completed reviews of the footprint, while only Japan, Switzerland, the United Arab Emirates, Ecuador, Finland, Scotland and Wales have formally adopted it. One of the major weaknesses of the ecological footprint is that data collection takes a significant amount of time and new information is often available only every two to three years.
The ecological footprint is an assessment of how many natural resources our economies use, but does not measure human well-being or economic welfare per se. An interesting attempt to combine measures of welfare with ecological impact is the Happy Planet Index developed by the UK-based New Economics Foundation in and revised in with a coverage of countries. It has also emphasized that there are different routes to achieving comparable levels of well-being.
In particular it has demonstrated that, while the model followed by the West can provide widespread longevity and variable life satisfaction, it does so only at a vast and ultimately counter- productive cost in terms of resource consumption. Formally launched in , but yet to become fully operational, this initiative aims to harness the power of the Web to allow American citizens to discover, understand and review hundreds of indicators on issues such as crime, energy, infrastructure, housing, health, education, environment and the economy.
Besides a partnership with the National Academy of Sciences, which provides the methodological backing, and the support of various philanthropic foundations, The State of the USA has been boosted by the decision of the Obama administra- tion to create a Key National Indicator System in In Canada, since the late s, the Atkinson Charitable Foundation has sponsored a community-based process to define new indicators to measure the quality of life.
In , this effort resulted in the publication of the Canadian Index of Wellbeing and a number of associated reports. Public institutions rethinking GDP? Not only researchers, think-tanks and civil society groups have questioned GDP. Public agencies and governments have also promoted their fair share of revisionism, more often than not, though, without stepping out of their relative comfort zones. There is one notable exception: a small landlocked kingdom of a few hundred thousand souls, bordering the two most populous countries of the world, India and China.
It was only in , though, that the government formally decided to develop GNH indicators. The Centre for Bhutan Studies was given the task of designing the methodology, and, after a number of con- sultations and local stakeholder meetings, the first GNH survey was carried out in a handful of districts in The four pillars were translated into nine measurable domains: psychological well-being, health, education, time use, cultural diversity, good governance, community vitality, ecological diversity, and living standards.
A second larger survey was carried out in , but its implementation took nearly nine months, a long time for a process that, ideally, should be conducted on a regular basis to inform ongoing national policies. When the achievements exceed the cut-off, they are replaced by the sufficiency level.
Moreover, its democratic credentials may be questionable, which begs the question of whose happiness or sufficiency is actually being measured. International conferences on gross national hap- piness have been held in Canada, Thailand and Brazil, and small to medium-sized projects aiming to measure national happiness at the local level have sprawled across the globe.
Bhutan was the only country in the top 20 with a low GDP record. Also the World Bank has tried to complement GDP in an effort to step up its professed fight against global poverty. By the early s, the list had evolved into a different set of six variables: population, area, per capita GDP, life expect- ancy, adult illiteracy rate, and inflation rate. One of the key indicators employed in these studies is the so-called adjusted net saving, better known as genuine saving, which purports to be a measure of sustainability by looking at how much countries provide for the future.
Given the scope of the data collection, the gathering is quite cumbersome, so total wealth estimates are only published every five years. In the latest report, titled Where is the Wealth of Nations? Measuring Capital for the 21st Century, the Bank convincingly demonstrated how relying solely on GDP would result in distorted estimates of national wealth. For instance, a major oil exporter such as Nigeria could have had a stock of produced capital five times higher.
Similarly, Venezuela could have four times as much produced capital. In terms of per capita GDP, Venezuela, Trinidad and Tobago, and Gabon, all rich in petroleum, could have reached a level of produced capital comparable to that of contemporary South Korea. Recognizing that low incomes typically satisfy basic needs whereas high incomes are spent in part on luxuries, the HDI uses a deflated version of per capita GDP to take account of the declining contribution of higher income to human development, with very little weight attributed to increases in GDP per capita above the world median.
The theories put forward by Indian economist and Nobel laureate Amartya Sen, which emphasize individual capabilities as a key component of human development, were instrumental in the methodological construction of the HDI. But that seemed to both Mahbub and me to be wrong. What I want you to do is produce an index as vulgar as GDP but more relevant to our own lives. For some, the index pro- vides a skewed understanding of human development given that it adopts socio-economic indicators but excludes measures of political freedom and human rights.
The HDI has also been considered of little use for more affluent countries, as their scores scarcely differ from one another. Indeed, most of these nations enjoy nearly universal adult literacy, and the transformation procedure for income levels essentially equalizes their per capita GDP data. Thus, in order to provide a more comprehensive blueprint for national account- ing better suited to deal with new challenges, Sen accepted the invitation to become part of a special commission set up by Nobel laureate Joseph Stiglitz and French economist Jean Paul Fitoussi in upon request of the then president of France, Nicolas Sarkozy.
Although the group gave itself the convoluted name of Commission on the Measurement of Economic Performance and Social Progress, its actual objective was to identify alternative measures that policymakers could use to replace GDP. In its final report, the Commission recommended broadening the spectrum of information regularly published by national statistical offices so as to include measures of health, education, political par- ticipation and governance, social connections and relationships, environment and insecurity of both an economic and a physical nature.
But any reasonable driver read our policymakers would also want to know how much fuel is left, how far can the car still go and the overall mileage covered so far. Both pieces of information are critical and need to be displayed in distinct, clearly visible areas of the dashboard. Resistance to change According to Stiglitz, President Sarkozy was sincere in his attempt to find alternative and better measures to GDP.
And, most importantly, politi- cal willingness. At the same time, a full system of environmental accounting still poses serious methodological challenges from an economic point of view. According to the OECD, for instance, if household production and services were to be included in official estimates, the US economy would be surpassed by a number of European countries in terms of GDP growth rates, thus shaking deep-seated convic- tions behind the American economic dream.
Although formal, this shift would have an important political impact: it would signal the end of the economic recession in both countries. A lingering question is whether some governments, perceiving dangers in a new measurement system, might conclude that such an overhaul would wreak political havoc and therefore ought to be avoided. A telling example in this regard is the controversy surrounding the introduction of the green GDP in China. Since no other country had ever developed a comprehensive methodology to estimate the full environmental costs to be deducted from GDP, Chinese authorities decided to set up the system from scratch and invited local government authorities to cooperate.
The process was divided into three sequences: the calculation of the natural resources consumed in economic activities; the assessment of environmental loss caused by economic development; and the monetization of the quantity of resources and environmental loss. For over two years, the technical team conducted accounting analysis on physical quantification of environmental pollution and imputed environmental degradation cost for forty-two industrial districts and three regions in East, Central and West China.
Published in but with data from , the first report showed that the economic loss caused by pollution amounted to Of the figure, environmental costs by water pollution, air pollution, solid wastes and pollution accidents accounted for Methodological problems, political tensions and economic interests ended up derailing the initiative. For starters, the official authorities of the regions with a lot of polluting industries — such as Ningxia, Hebei, Shanxi and Inner Mongolia — refused to cooperate in data collection.
Many local government officials feared that the green GDP initiative would turn into a naming and shaming exercise. However, this approach ran counter to a decades-long tradition within the state apparatus, which based promotion for officials on the economic growth rate of their localities. This was due to the fact that the National Bureau of Statistics had relied exclusively on basic data and rudimentary techniques, thus focusing only on the cost of environmental pol- lution, without accounts of natural resources depletion and eco- logical damage.
Moreover, green GDP team leader Wang Jinnan accused local governments and the statistical agency of foot-dragging. Unfortunately, it is also wrong. As discussed in Chapter 1, it drew extensively on the pivotal research conducted in the US by Kuznets and his colleagues. Over time, the system was reformed according to the evolutions of the market economy and the specific interests of participating states. In , the UNSNA went through a partial reform aimed at further developing some of its key concepts, in particular the distinction between market and non-market production, the classification systems, the statistical units and the boundary of assets that are seen as adding to national income.
After this reform process, Japan and Australia joined in and, in , the then European Community adopted some of its components. As countries began to develop their own national accounts, the statistical community went on refining the underpinnings of the system. In the meantime, the globalization of markets forced statisticians to keep up with the evolution of complex economic and financial mechanisms.
The outcome of this revision process was not to revise GDP, as most progressive economists and environmen- talists had hoped, but rather to create the so-called system of satellite accounts, a parallel set of calculations incorporating, among other things, indicators to gauge the scope of the informal sector and consumption of environmental resources. The UN reviewers rejected the call for an outright revision of GDP because of their reluctance to add any further imputations to the national accounts.
Hence, better no valuation at all than a distorted one. The new set of revisions was officially published in and the most important changes regarded the financial sector, which had become one of the key drivers of GDP growth. A first reform regarded the computation of pension expenditures, which saw the introduction of new systems to take into account the diversification of pension schemes among public and private suppliers. Moreover, due to the mounting pres- sure of policymakers and brokers, the financial assets boundary was expanded to include also financial derivative contracts, a burgeoning industry of speculation that would soon cause the entire global economic system to plummet.
In this new version, the UNSNA came to include all produc- tion actually destined for the market, whether for sale or barter, but it kept on excluding production of services for own final consumption within households except for the services produced by paid domestic staff and imputed rental of owner-occupied dwellings.
Similarly, no estimate was included for labour services of individuals provided without cost to non-profit institutions e. By contrast, the growth of fish in fish farms is treated as a process of production and therefore adds to GDP. Similarly, the natural growth of wild, uncultivated forests or wild fruits or berries is not counted as production, whereas the cultivation of crop-bearing trees, or trees grown for timber or other uses, is counted in the same way as the growing of annual crops.
The revision did not limit itself to closing the door to an incorporation of environmental costs into the calculation of national income. It also rehashed an old concern of progressive economists: that is, the computation of military expenses as part of GDP. Up until then, expenses on offensive weapons such as bombs, torpedoes and spare parts were only included as part of national income for the period of acquisition, regardless of the length of their life.
This meant that weapons could be sold or exported in another accounting period, thus producing counter-intuitive entries in the accounts for government. In order to resolve this merely technical inconsistency, the revision recommended that all military expenditure on items used for a period longer than a year must be treated as capital formation, thus contributing fully to the calculation of GDP.
It is hard to say whether specific pressure was made by arms- producing countries to have this reform introduced. In line with their GDP growth, emerging powers such as China, India and Russia have become the biggest investors in military equipment after the US, accounting for about 15 per cent of global spending. Poisonous beer Alternative indicators have played an important role in sustaining and strengthening the critique of GDP.
In many cases they have provided much needed meat to be added to the bones of the intellectual and philosophical struggle to reconsider GDP growth as the guiding principle in contemporary societies. At the same time, it would be incorrect to argue that all alternative indicators aimed at the same goal. Most attempts, especially those carried out by public institutions, did not call into question the main tenets of GDP growth. In many cases they have helped public opinion recognize some of the contradictions of economic growth and have provided environmental groups with additional data to advance their goals.
At the same time, satellite systems remain fundamentally distinct from the central accounts used to measure national income. As a conse- quence, the market mentality has expanded its reach.
Its valuation procedures have come to govern not only conventional goods but also the vast realm of intangibles that make up social and natural capital. So-called environmentally adjusted net domestic products and valuation methods for ecosystem services are being presented at international conferences and development summits. It must be recognized that most of these initiatives are genuine in their ultimate goal. They are honestly trying to use economic reasoning for the preservation of social and environmental quality. As a consequence, the depletion of natural resources can be offset by, for instance, an equivalent investment in other fields.
The removal of a park to build a kindergarten would result in a perfectly balanced sheet, with no negative impact on sustainable development or, in eco- nomic terms, with a net opportunity cost for future generations equivalent to zero. In this type of accounting, what we take away from nature is rebalanced by what we invest in human develop- ment. Prices create the illusion that natural goods and services can be exchanged on the market as if they are conventional factors of production. This is why one needs to be very careful about what is being measured and for what purpose, what can be controlled and what cannot.
Yet, it may also open up dangerous possibilities for a marketization of natural resources, given that anything that has a price can be bought and sold. As already pointed out by E. Worse: its way of thinking has permeated other sectors and most well-meaning attempts at finding alternative measures. Apparently, poisonous beer is harder to let go off than many would have thought.
It will just spread. It will be something that the intelligent people do. It had implemented a series of unprecedented austerity measures and curtailed public spend- ing. Retirement benefits had been slashed and working hours increased. Yet, unemployment stood at 20 per cent and social discontent was on the rise. Hundreds of supermarkets were shut down after looters broke in and emptied shelves. Angry citizens struck out against banks, businesses and multinational corpora- tions. In a wave of collective hysteria, millions of citizens began withdrawing money from their accounts and sent all their savings abroad.
In response, the state froze bank accounts and capped the sums of cash available to account-holders. A few weeks later, following the collapse of the currency, the govern- ment was forced to default on its debt obligations. Soon, there was no cash at all circulating within the economy. Bartering began to rise spontaneously in communities, espe- cially on the outskirts of Buenos Aires and in rural areas. Although a red de trueque bartering network had been created by a small group of farmers in the early s, few people had any prior knowledge of barter markets, and initially groups of citizens simply showed up at public spaces such as schools, parks and churches.
In cities, most bartering dealt in used and second-hand goods such as clothing and furniture as well as services, including healthcare. In spite of their initial reluc- tance, even nurses and doctors agreed to provide their services in exchange for various types of material goods. Local markets where farmers could sell their produce mushroomed across the country, more often than not thanks to the introduction of community-managed local currencies alternative to the official peso, the most widespread of which being the credito.
As new forms of production and consumption took root, communities began to reorganize economic processes from below. Closed-down factories were repossessed by retrenched workers, who started running them as co-operatives, as exemplified by the movement of fabricas recuperadas.
Collective decisions, whether in factories or in local markets, were generally based on consensus. Voting was considered a last resort, only to be used when unanimity could not be achieved. Despite inevitable complications and latent tensions, these initia- tives aimed to foster participation by all strata of society with a view to safeguarding the basic needs of every individual and, most importantly, avoiding social and political exclusion.
The preservation of cohesion was considered more important than decisional efficiency, as long meetings and strenuous deliberations became quite common. Indeed, markets and other community events presented opportunities for informa- tion and cultural exchange. Music, street theatres and various other types of arts served not only as entertainment but also as outlets for public protest and resistance. For instance, the boom in local currencies combined with a decrease in production led to inflation.
This became particularly noticeable when one needed to replace items not manufactured locally.
We Can't Eat GDP: Global Trends on Alternative Indicators, by Lorenzo Fioramonti
As rules regard- ing property rights became more relaxed, squatter camps popped up in many peripheral areas of the major cities, often causing distress and conflicts. Eventually, the conventional economy got back onto its feet. The political class was reshuffled and new leaders emerged.
In spite of lofty rhetorical remarks about alternative economic plans, GDP growth was reaffirmed as the chief objective of national macroeconomic policy. Several barter markets were undermined by official authorities and sabotaged by corporate interests. Or did it? As a matter of fact, pockets of resistance remained active throughout the nation. Indeed, the crisis had brought about a fundamental opening.
It had shown that an alternative economic system was possible, and that citizens could take the lead in reshaping the economy — and, as a consequence, democracy — from below. Ever since the mids, and in particular with the outbreak of the Great Recession, similar experiences have mushroomed throughout the world, especially in Europe. Climate change and the financial crisis have forced hundreds of thousands of people to call into question the conventional economy. As macroeconomic policies have continued unaltered despite the evident threats posed by environmental degradation and financial instability, citizens have decided to take matters into their own hands and have launched a wealth of grassroots initiatives.
Others have been absorbed into more conventional non-profit and third-sector activities, thus losing their innovative character and becoming part and parcel of the more traditional social economy. In some cases, though, the sys- tematic effort to challenge the politics of GDP has given birth to fully fledged movements spanning countries and continents. This chapter discusses some interesting examples of how civil society has been rethinking the pillars of mainstream economics: that is, how we produce, how we consume and the role of money.
Hopkins focused on permaculture: that is, an approach to ecological design and agricultural systems centred on natural ecosystems. Then, in , they got imaginative. As part of their voluntary work, Hopkins and his fellows also ran awareness-raising events in the district, which exposed them to other communities sharing similar concerns about economic imbalances, environmental degradation and the depletion of natural resources. In late , at an early UK transi- tion meeting held in Bristol, a fortunate encounter with the foun- dation Tudor Trust allowed the TTT founders, in partnership with others, to secure initial funding to launch a network.
In late , the Transition Network began its training activities with a first intake of eighteen people. Meanwhile, Hopkins went back to his desk and completed the Transition Handbook, which was finally published in and sold over 25, copies. Their training programme has spanned the world, having been replicated in a number of countries and regions. Currently there are hundreds of people involved in some capacity in TTT and more than thirty running projects, some implemented in collabo- ration with local authorities.
Essentially, TTT is now an umbrella organization made up of various groups and clusters focusing on a wide variety of activities, from education programmes to renewable energy projects, from health and well-being to building and housing. Community projects have been put forward to turn abandoned industrial sites into offices for eco-friendly businesses and public spaces, all equipped with renewable energy sources. According to the US Energy Information Administration, the production of crude oil in America peaked in the s and has steadily declined since.
At the same time, they aim to make communities more resilient and adaptable to the shifts required by a low carbon economy while strengthening civic participation, solidarity and social cohesion. Starting from a realization that the GDP development model is humanly and ecologically not sustain- able as it causes irreparable damage to our ecosystems and living environment, the transition initiatives have become laboratories of alternative economic thinking and practice. In doing so, they are also experimenting with new forms of democracy.
They are entirely founded on principles of bottom-up self-organization and encourage collective decision-making on public goods, thus challenging the power of technocrats that thrive under the GDP paradigm. They promote self-governance and espouse many tenets of deliberative democracy, whereby each resident-member is encouraged to contribute towards collective decisions affecting the management of common resources. A special emphasis is placed on public goods such as food and energy.
These initiatives strive to identify new and better ways to produce food locally in order to privilege grassroots knowledge and expertise, while reducing food miles that push up prices and damage the environment. In all the projects, a fundamental goal is to avoid long supply chains, promote local ownership and encourage reusing and recycling. The same principles have also been applied to the production of energy. Moreover, they promote a different understanding of common goods based on cooperation rather than competition.
The emphasis on self-production and self-consumption, sharing, recycling and reusing is viewed in fundamental opposition to the GDP model of consumption, which requires things to be purchased, burned up, replaced and discarded at an ever-accelerating rate. Moreover, community gardens have popped up in a number of cities, small communities have advanced renewable energy projects, and low-carbon approaches have affected lifestyles and collective action.
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Focusing on pioneering research on alternative metrics of progress, governance innovation and institutional change, he makes a compelling case for the profound and positive transformations that could be achieved through a post-GDP system of development. From a new role for small businesses, households and civil society to a radical evolution of democracy and international relations, Fioramonti sets out a combination of top-down reforms and bottom-up pressures whose impact, he argues, would be unprecedented, making it possible to build a more equitable, sustainable and happy society.
If you want to buy it on Amazon UK, click here. For Amazon US, click here. By showing us how it can be accomplished, this much-needed book should hasten that day. And it is also a better and more compelling read than exactly Gross Domestic Product GDP is arguably the most well-known statistic in the contemporary world, and certainly amongst the most powerful. It drives government policy and sets priorities in a variety of vital social fields — from schooling to healthcare. Can we continue to sacrifice the environment to safeguard a vision of the world based on the illusion of infinite economic growth?
Finally, the political interests behind the GDP mantra have been unveiled, forcing us to rethink mainstream economic views and build a more just and sustainable world. It is indeed the most important struggle of our generation. GDP is thus an ideological weapon, not a neutral scientific measure. There is no hope of escaping the current crisis until we recognise the role that obssession with GDP has played in causing it. Seeing the problem of government policy priorities having been led astray, Fioramonti provides a thorough and up-to-date picture of the various initiatives that have emerged to demote the role of GDP.
This is a singular contribution on a vitally important subject. That is, the GDP number takes no account of the depletion of capital goods or natural resources, treats income accruing to foreign investors as a measure of national success and focuses on the means of economic activity, production, rather than the ends.
Gross Domestic Problem : The Politics Behind the World's Most Powerful Number
Gross Domestic Problem explains why GDP is so misleading, and gives a readable history of this most powerful and mysterious of numbers. Will crises compel regions to adapt by increasing or decreasing their mutual commitments? This book is a path-breaking effort to answer these crucial questions with regard to Europe, Africa, South America and East Asia. Les mer. Om boka Gross domestic product is arguably the best-known statistic in the contemporary world, and certainly amongst the most powerful. Yet for perhaps the first time since it was invented in the s, this popular icon of economic growth has come to be regarded by a wide range of people as a 'problem'.
After all, does our quality of life really improve when our economy grows 2 or 3 per cent?