Monday, April 21, 2014

GDP: A Brief but Affectionate History -- Good history, short on the alternatives.




I read Stiglitz and Sen’s “Mismeasuring  Our Lives” a while back, and I bought their arguments that GDP was itself defective and overly reductive and measured some of the wrong things. They proposed a dashboard of stats that would better measure wellbeing than GDP does.

Coyle does not think this is necessary. After going through a history of GDP, she concluded:
GDP does a good job of measuring how fast (or not) the output of “the economy” is growing. And GDP growth is closely linked to social welfare. GDP struggles with measuring innovation, quality and intangibles, but it does a better job than any currently available alternative. (136)

And then she proposes some tweaks to GDP to better work in the information economy.

Overall she does a good job outlining the history.  It is accessible to everyone with some background in national accounting (even if just econ 101).  My only issue is where she looks at possible alternatives to GDP.  I kept waiting for her to really get into the Sen/Stiglitz study, and then she did. For one page (118). Then where she lost me, was her paragraph dismissal of the Bhutaneese metric of “Gross National Happiness”  (112). I am a fan of trying to track flourishing, even if that makes me “Grotesque”  by her words without much justification. These parts are all too short and come across as dismissive, even in a brief, affectionate history.