#134 - GDP vs. HDI
A friend and reader of this newsletter sent me a profile on the Japanese philosopher, Kohei Seito:
Can Shrinking Be Good for Japan? A Marxist Best Seller Makes the Case
I’m not going to even attempt to wade into the fight of the growth vs. degrowth Econ people. That territory of public intellectual debate seems more toxic than the Gowanus1.
However there was one policy proposal that Seito suggested that I think might be a helpful way to reorient economic thinking. He proposes using
the “human development index,” an idea proposed by the Pakistani economist Mahbub ul Haq, which the United Nations has used as an alternative indicator of a country’s progress.’
The index — which measures life expectancy, education and quality of life — gives a more comprehensive view of how the economy affects people’s lives than GDP
I’ve always felt like GDP never gave a full accounting for how wealthy a country could be. Sure it measures the amount of wealth and economic output within a country, but it does not track distribution and the overall true health of an economy. Sure you can have a lot of money, but it is how you use that money that matters. As it says in the book of Proverbs
Of what use is money in the hand of a fool, since he has no intention of acquiring wisdom? (Proverbs 17:16)
Some might argue that GDP per capita is a better indicator, but according to the World Bank, that would rank the United States 12th among nations, with the 11 in front of us being some variation of rentier petrol state or tax shelter (Qatar, Cayman Islands, Bermuda, Switzerland, Ireland, etc.)
Quality of life varies across these nations and does not necessarily measure the true measure of success in a country. A nation of happy and healthy people is far more desirable than a nation of miserable yet wealthy people. Reorienting global goes around HDI may yield outcomes that we actually want and that are within reach, over the endless pursuit of making a line on the chart go up 📈.
My inbox is open for all your thoughts and ideas about where we should go next. Please let me know what you think.
Thank you as always for reading.
If you have any thoughts that are civil and/or interesting regarding the growth vs. degrowth debate, I’m all ears. I’ve just sensed that this is a space that gets real fired up online