Traditionally, a country’s economic health and well-being is
measured by something called the Gross Domestic Product (GDP) or its cousin, the
Gross National Product (GNP). The media eagerly report the number on a monthly
basis and its rise or fall is used as an indicator of how well things are
progressing or not. A recession, for instance, is defined as two consecutive
quarters of negative GDP growth.
But GDP is really just a measure of national
spending with no distinctions between transactions that add to well-being and
those that diminish it. As long as money changes hands, the GDP increases.
The fact that this indicator is based
upon economic growth is not surprising. The collection of the statistics
underlying GDP and GNP, which is called the System of National Accounts (SNA),
was created in the United States
in the 1930s to kick start the economy out of the Great Depression by maximizing
production and consumption of manufactured goods in a wartime economy.
Seventy-some years later, however, the GDP’s faith in
unbridled growth and efficiency is not as useful. Our current worldwide economic
and environmental crises suggest that we need a new definition of progress and
a new way of accounting for the costs generated by economic activity. For
instance, under the GDP, environmental pollution ends up being a positive
because it creates economic activity – and is even counted positively twice:
once when it’s created and again when it’s cleaned up. And the result of that
pollution, which is often illness such as cancer, also ends up on the plus side
of the ledger because it, too, creates economic activity...
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Wendy Priesnitz is Natural Life magazine's editor. Visit her
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blog.