The end of GDP? Not quite but lets reconsider

Joseph Stiglitz has an interesting piece regarding the effectiveness of our current GDP-heavy economic measurement approach to public policy. But Stiglitz is not implying the 'end of GDP' as a crucial measure for public policy - at least I hope he's not. As he says after all:

'The fact that GDP may be a poor measure of well-being, or even of market activity, has, of course, long been recognized.'

And we still use the measure because it does reveal crucial data about the state, structure and direction of an economy (when measured correctly.)

What he is getting at is that over-reliance on GDP-based public policy will cause more problems as the fundamental structures of the global economy continue to change, and as the ramifications of economic growth are increasingly felt on the environment and other areas of our lives.

As he puts it:

'If we have poor measures, what we strive to do (say, increase GDP) may actually contribute to a worsening of living standards. We may also be confronted with false choices, seeing trade-offs between output and environmental protection that don’t exist. '

which causes conflict when,

'political leaders are told to maximize it, but citizens also demand that attention be paid to enhancing security, reducing air, water, and noise pollution, and so forth – all of which might lower GDP growth.'

Well these tensions are only going to become more pronounced as capital, labour, technology and ideas increasingly escape the control of state sovereignty in a globalizing world.

In this respect, improving our measurement approaches to public policy is a great start to be sure, but I feel that the number-one priority should be for states and stakeholders to come together through formal and informal mechanisms to 'talk' and craft shared visions for public policy issues on a more global level.

The debate is a very complex one to be sure. But to me, if public policy in the 'hyperconnected' 21st century is going to meet the global challenges that confront us, it seems almost imperative that global governance mechanisms would be the most logical and effective means to bring about real and sustainable advances in socio-economic wellbeing.

But i'll stop here since I feel I am now pushing the debate beyond what Mr. Stiglitz intended.