February 26, 2009
When the Commerce Department announced the nation’s Gross Domestic Product (GDP) figures for the fourth quarter of 2008 at the end of January, they revealed a historical context for our economic slide – the 3.8% GDP shrinkage at the end of 2008 is the fastest pace for an economic slowdown in a quarter of a century.
Consumer spending, stated the Commerce Department, has fallen sharply, with big-ticket spending plunging even faster, falling off by 22% for the 2008 fourth quarter.
But what if the GDP – measuring the market value of a country’s economic output – isn’t the best indicator of societal well-being?
“GDP growth is mostly a measure of growth in consumption, which is the driving cause of environmental decline,” writes Positive Futures Network chair David Korten in his new book, Agenda for a New Economy. “Human health and well-being depend on a great many things that do have market value: food, housing, transportation, education, health care, and many other essentials of a healthy life. These, however, are means, not ends, and their real value is a function of how they contribute to improving human and natural health and vitality.”
Because the GDP measures quantity of consumption only, rather than quality of that consumption (and its costs to society or the environment), relying on such a measurement suggests an underlying assumption that material growth and wealth accumulation are the greatest goods. In actuality, the GDP remains largely silent on societal well-being.
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