What GDP has to do with economic progress or wellbeing?


If there is one single lesson to be learned from the economic crisis culminating in 2008-2009, then it is – unsustainable economy is not viable and socially justifiable.The problem though is that as long as GDP (gross domestic product) will continue to be used as the dominant, key indicator to characterize success, growth, recovery, improvement of economy, we will not escape the good old in-sustainability circle. As long as political leaders will use GDP to measure success of their policies and wellbeing of their people, we will continue missing the point, and it is: it is not the size of the economy, but its content and distribution of resources which matters and affects people’s wellbeing and quality of life.

Back in 1968 it was perfectly clear to Robert F. Kennedy that GDP “measures everything, in short, except that which makes life worthwhile.” He understood the danger of GDP as the political/ economic goal which is useless in measuring things which politicians AND economists should be really worrying about, like human wellbeing, employment, decent living conditions, infrastructure, shelter, self-realization, human security, education, good health services and social relations.

I wish every single politician in every single country could watch this Kennedy’s speech and if even just 1% of all of them would understand the true essence (or actually lack of it) of GDP, it will be a huge achievement. Actually, you should watch this too. Everyone should.


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