Explore Your Possibilities: Is GDP An Obsolete Measure of Progress?

The GDP, generally expressed as a per-capita figure and often adjusted to reflect purchasing power, represents the market value of good and services produced within a nation's boundaries. Sounds reasonable. Until we consider what it doesn't measure: the general progress in health and education, the condition of public infrastructure, fuel efficiency, community and leisure.

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One new calculation that's been attracting attention is the Happy Planet Index (HPI), which combines economic metrics with indicators of well-being, including subjective measures of life satisfaction, which have become quite sophisticated (HPI uses data from Gallup, World Values Survey, and Ecological Footprint). The HPI assesses social and economic well-being in the context of resources used, looking at the degree of human happiness generated per quantity of environment consumed. The HPI metric was driven in part by the recognition that the environmental costs of economic growth must be figured into standard-of-living reports.

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The matter of how a nation measures performance is far from trivial, says Gus Speth, particularly at a time when environment sustainability is on many people's minds. He observes: "You tend to get what you measure, so we'd better measure what we want." In other words, to a certain extent we are what we count.

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For Nic Marks, the key shift introduced by the HPI is its "move away from measuring production and toward measuring consumption. The HPI serves as a signpost pointing more toward a society we want to live in — the delivery of good lives rather than the delivery of more goods."

So how does the U.S. fare in HPI terms? Not so good. It sits pretty far down the list at 114. The U.K. is 74, behind Germany, Italy and France. Topping the chart is Costa Rica, which has long life expectancy, high life satisfaction, and a per capita ecological footprint one-fourth the size of the U.S.

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