Monday, July 12, 2010

The quest for a GPI

There was an interesting article (offline) in The Press on Saturday on the development of a Genuine Progress Indicator (GPI) for New Zealand. For those who don't know, the GPI combines the traditional measure of national advancement - GDP - with measures of environmental and social progress to give us a better measure of whether we are in fact better off. There are at least two groups working on this in NZ - one at Landcare Research, and an independent group led by sustainability consultant Dave Breur. In addition, Green MP Kennedy Graham has a member's bill in the ballot to require the government to report and forecast environmental and social indicators alongside GDP in budget documents. All three versions disagree on exactly which measures should be used, and how they should be combined, but they're all clear that you need to measure things other than just straight economic growth.

As for why, other countries which have measured GPI have found something disturbing:

From World War II until the late 1970s, GDP and GPI roughly kept track. Any expansion in economic activity registered directly as a general increase in reasons to feel good about life.

But from the 1970s, raw economic output has continued to soar (and no wonder with every family working two jobs and all hours, says Peet) while GPI has stagnated. Spinning the wheels faster has not necessarily been paying off.

As the article points out, this is politically explosive. Both major parties have been pushing growth uber alles. But if economic growth does not make us better off (because it is effectively mining our society and our environment), then what is the point of such policies? All they do is transfer wealth from the many to the few. Measuring GPI will let us see the full effects of our policies, and make better judgements about what we want. And that can only be good for our society.