Comments on: Measuring economic performance: Looking beyond GDP

By: The Singapore Daily » Blog Archive » Weekly Roundup: Week 45

The Singapore Daily » Blog Archive » Weekly Roundup: Week 45 — Sat, 07 Nov 2009 03:25:22 +0000

[...] are fed up with progress! – Gerald Giam’s Blog: Measuring economic performance: Looking beyond GDP [...]

By: JS

JS — Tue, 03 Nov 2009 08:50:38 +0000

@TM: try http://www.worldbank.org/environmentaleconomics
for the indicator Adjusted Net Saving. It includes e.g. the exploitation of resources. Published regularly within the Word Development Indicators.

By: TM

TM — Tue, 03 Nov 2009 06:42:00 +0000

Hi Gerald, sadly the GPI and ISEW have not been officially adopted by any government in the world. GDP remains the chief indicator of economic well-being. The only country I know of that ranks an alternative indicator above GDP is the nation of Bhutan which has embraced the Gross National Happiness (GNH).

http://en.wikipedia.org/wiki/Gross_national_happiness

However, ecological economists have attempted to calculate true progress using the GPI in America and Canada and their results show that while GDP has almost doubled since the 1970s, GPI has been essentially flat.

http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm

http://www.greeneconomics.ca/AlbertaGPI

http://gpiatlantic.org/gpi.htm

The way I see it, the main problem is that mainstream economists have a wrong set of units for accounting. They reduce everything to dollars and cents which are nothing more than abstractions divorced from the material world. Oil prices hit a low in 1999 at $17/barrel but the price did not tell us what was left in the ground for us to extract. All it did was to create the temporary illusion that oil was plentiful, and that alternative sources of energy were therefore uneconomic and unnecessary – in dollar terms – according to the self-deluded economists.

Had they learned to calculate the economic inputs/outputs of a nation in terms of energetic units (Watts, BTUs, etc.), biocapacity and ecological footprint, they would have realized that our entire growth-centric-consumerist economic paradigm is one giant energy sink and resource blackhole that is squandering away at unsustainable rates the earth’s natural capital and natural resources that have taken eons to form.

http://dieoff.org/page175.htm

By: The Singapore Daily » Blog Archive » Daily SG: 3 Nov 2009

The Singapore Daily » Blog Archive » Daily SG: 3 Nov 2009 — Tue, 03 Nov 2009 03:16:41 +0000

[...] Singaporeans are fed up with progress! – Gerald Giam’s Blog: Measuring economic performance: Looking beyond GDP [...]

By: Gerald Giam

Gerald Giam — Tue, 03 Nov 2009 02:50:04 +0000

TM – Thanks for your insights and suggestions! They will certainly be useful for any future revisions/updates to this article. I’m interested to find out more about GPI and ISEW. I’ve seen them mentioned during my research for this article, but how credible are they, and have they been adopted by anyone or any country?

By: TM

TM — Mon, 02 Nov 2009 23:39:07 +0000

I agree with you fully. Growth today in developed nations has become uneconomic. Non-mainstream economists and environmentalists have argued for decades that the GDP is flawed and that a true measure of progress ought to differentiate transactions that add to well-being and those that decrease it. There are alternative metrics such as the Genuine Progress Indicator (GPI) and the Index of Sustainable Economic Welfare (ISEW) that Singapore should adopt alongside the GDP to measure true progress, but it will definitely put us in a bad light because of the costs incurred in resource depletion and environmental degradation. So while we delude ourselves into thinking we are rich because of our high GDP, we are in reality accumulating huge amounts of ecological debt which will require painful reckoning in the near future.

http://dieoff.org/page11.htm
http://en.wikipedia.org/wiki/Genuine_progress_indicator
http://en.wikipedia.org/wiki/ISEW

“Uneconomic Growth Today

The definition of uneconomic growth is growth that produces higher costs than benefits. The United Nations has documented examples of five types of uneconomic growth:

* jobless growth, where the economy grows, but does not expand opportunities for employment;

* ruthless growth, where the proceeds of economic growth mostly benefit the rich;

* voiceless growth, where economic growth is not accompanied by extension of democracy or empowerment;

* rootless growth, where economic growth squashes people’s cultural identity; and

* futureless growth, where the present generation squanders resources needed by future generations.”

http://www.steadystate.org/CASSEDownsides.html