Who still cares about GDP?

Why would anyone care about high GDP growth if the resulted wealth is not enjoyed by all members of society? Illustration: Biplob Chakroborty

Many years ago, a colleague at the United Nations invited me to watch a video of Marilyn Waring, an MP and economist from New Zealand, talking about economics. I watched, stunned, as Waring scoffed at the focus on GDP. "Why should I care about GDP?" she demanded. "What does it tell us that is useful or important?"

Naturally, I was intrigued. Like so many people, I had unquestioningly assumed that GDP was a great measure of how a country is doing. If GDP is on the rise, then the country is growing more prosperous: people can afford a decent home, enough food, good education for their children, and so on. If GDP stagnates or, heaven forbid, is on the decline, then it's a disaster. Simple, right?

But inspired by Waring, I started to learn more, and discovered that Gross Domestic Product doesn't actually tell us much useful about a country's condition. GDP includes all kinds of products that we would do better without, such as weapons, junk food, and tobacco. It fails to include things we need, like the unpaid work of caring for others. It ignores whether products are healthy or harmful; a gun, being more expensive, is far more valuable than a carrot. Cars pollute and kill, but by the logic of GDP, they are vastly more valuable than a bicycle. A forest is a waste of space; a river with clean water has no value. Destruction pays; conservation is wasteful.

It's little wonder, then, that our obsessive international focus on GDP and its endless growth has led to so much environmental destruction and the terrifying climate emergency. As Robert Kennedy famously said, GDP "does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… it measures everything in short, except that which makes life worthwhile."

I realise that after all we've been told, it seems counter-intuitive that economic growth, measured by GDP, will not mean that growing populations will have enough of what they need. So let's break it down a little more. As I mentioned, GDP does not measure only what we need, but rather everything we produce—as long as it's for sale. GDP includes harmful products and excludes beneficial ones, like organic vegetables, if they're not sold. GDP leaves out household work, despite its necessity to societies. So, GDP can go up without people having more access to basic goods.

Additionally, we measure GDP per capita. On the surface, that makes sense—we have to spread the material wealth among the population, so population size matters. But GDP per capita is simply an average. If Elon Musk walks into the room, average wealth will skyrocket—but nobody actually has more money. Averages tell us nothing about distribution, and what we do know is that Bangladesh is rapidly becoming more and more unequal, with wealth accumulating in the hands of the rich. Nor does GDP tell us anything about unemployment or the quality of existing jobs, or about people's health or feelings of satisfaction.

It isn't like we don't have alternative measures that would give us a better sense of how well we, as a country, are doing. In my research on the topic, the measure I found most impressive, for being the most comprehensive and the closest to measuring what we actually value, is Gross National Happiness. This does not mean, as some people have suggested, that everyone in Bhutan is supposed to smile all the time; what it means is that the Government of Bhutan looks at a wide range of measures, not just one average, and seeks to make things better across all of them: environmental issues, women's overwork, social isolation in the capital, etc.

Marilyn Waring's strong words about GDP came as a revelation to me two decades ago. We all need to have a shared revelation about the uselessness of GDP as a measure of a country's well-being. Let's stop using a measure that has resulted in obscene wealth for the few and environmental devastation, and focus instead on a measure that takes into account the things we value: access to basic needs for all, clean air and water, time for family, and well-being.


Debra Efroymson is the executive director of the Institute of Wellbeing, Bangladesh, and author of "Beyond Apologies: Defining and Achieving an Economics of Wellbeing."


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