Stephanie Phillips, Associate Editor
Ideology: Environmentalist | Writing From: Portland, Oregon

Last week, French President Nicolas Sarkozy, called for radical changes to how nations of the world measure economic and societal health. He announced that France would begin shifting away from using Gross Domestic Product (GDP) as the primary matrix to measure the success of its economy.

This comes on the heels of a report released by an international panel of economists led by Nobel Prize winner Joseph Stiglitz, recommending new global measurement methods for economic output. In line with these recommendations, French statistics agencies will begin to explore ways to incorporate quality of life measurements (health, education, environment, social connections, personal activities, etc) and long-term sustainability (both environmental and economic) data alongside GDP into calculations of national economic well-being.

The authors of this report posit that GDP, and GDP per capita are currently the widest used tools to measure and compare national success globally. Because of this exclusivity, ensuring raw economic growth and growth in production often monopolize national policy making. This is often to the direct detriment of the environment, and
high GDPs often ignore the realities of unequal distribution of wealth, overworking of populations, growing class separations and other factors that may lead to lower quality of life in both the short term, and the long term. They argue that by using different measuring techniques that take all of these factors into account, policy priorities may shift in a way that will provide greater access to the pursuit of happiness and a higher quality of life for all.

Examining our own country with these recommendations in mind, we know that the United States enjoys the world’s highest GDP and a very high GDP per capita. This makes us, within the current paradigm, the greatest global super power and wealthiest nation. But does this equal societal success?

To answer this, we must first ask: what is the goal of society, both its economy and its politics? Or perhaps more simply: what is the goal of our existing political structure, and our Constitution? I believe that the United States was designed with the purpose of creating an always-improving reality in which its citizens are free to pursue their own happiness in greater and greater numbers. Our economy was set up with the purpose of best enabling these ends.

Up to this point, many believe that pursuit of happiness has been best enabled by the pursuit of property and wealth. The more wealth in our nation, the more possible this is, and thus growth in economy has been an indicator of the health of society. Maximum growth in GDP has been used as a measure of progress; with more wealth, there is more ability for defense, more possibility of science and research, more medicine, more education and more material consumption. We see economic growth as a means to an end, as a means to ensuring a free society.

There are a number of undeniable problems with limiting progress to GDP measurement however, which have and will hinder our ultimate goal of freedom to pursue happiness. They must be accounted for.

The first is environmental sustainability. As we have seen in the United States and around the world, growth in GDP is very often simultaneously paired with degradation of the environment; in fact, growth in GDP often comes out of degradation of the environment. For example, if people drive more and, thus, consume more gasoline, the GDP will rise as a result but so will our direct impact on climate change. If industry can produce more goods at cheaper costs, the GDP will rise but so will the number of discarded goods in landfills and the number of resources extracted from the earth. As a result of this, “fixing the environment” is often demonized as too expensive for the economy. In reality, however, juxtaposing the two makes no sense in the long run, as unchecked growth will eventually encounter the earth’s resource limits. This is not a moral issue, environmental sustainability is societal sustainability; economic wealth is directly related to the earth’s resources, and detriment to the environment we live in will ultimately come at great cost to the economy. A nation that doesn’t take the idea of its own long-term sustainability into account is directly harming the future freedoms of its citizens.

The second relates to quality of life. As we see in the United States today, economic growth and a high GDP does not come always come with subsequent increases in the distribution of wealth and access to the services that enable better qualities of life. Despite our high GDP, we have less access to successful health care, lower literacy rates, and higher infant mortality rates than other nations with smaller GDPs, and more significantly, smaller GDPs per capita. So are we really a “wealthier” nation?

Perhaps, as President Sarkozy has suggested, in the name of utilizing politics and economy to enable our life pursuits, the definition of wealth and how it is measured needs to evolve beyond sheer material production. While measuring short-term growth will always be important in any capitalist economy, it may not be everything we need to look at into the future. President Sarkozy plans to talk about economic measurement at the upcoming G20 Summit. I am interested to see what comes of it and how France’s experiment will play out.