Why GDP Still Matters
New Zealand is being lauded for introducing the world’s first Wellbeing Budget, which aims to shift the focus from GDP toward the “wellbeing of people.” Those with a grudge against the GDP indicator – in particular greens, who blame economic growth for harming the environment – see this as an exciting new opportunity to stop chasing dollars and start caring about people.
The pursuit of higher GDP is easy to malign. The measure was invented during the industrial era, and includes many things that are obviously not beneficial. As Robert F. Kennedy pointed out a half-century ago, GDP “counts special locks for our doors and the jails for the people who break them,” yet “does not allow for the health of our children, the quality of their education, or the joy of their play.”