In the early days of his 1968 presidential campaign, Robert Kennedy gave a speech about what he saw as the limited scope of the measurement known as the GNP (Gross National Product), which after a few tweaks, now goes by GDP (Gross Domestic Product). “It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile,” he told a crowd at the University of Kansas. What it does measure is consumption and spending, and so growth in the GDP is often cited as a way to gauge the nation’s economic health.
Almost exactly 40 years after Robert Kennedy’s speech, a subcommittee of the U.S. Senate is taking a hard look at the GDP— what it calculates and what it leaves out and what that means for policy decisions. The Glaser Progress Foundation will be represented at the hearing tomorrow because one of their missions is to “ensure people understand the limitations of the GDP statistic.” For example, the Glaser Progress Foundation points out, the GDP does not measure economic inequality, environmental costs, and healthcare expenditures that could have been avoided by wider insurance coverage.
Do you pay attention to the GDP? Is it an accurate measure of economic health? What are the alternatives? What is your personal economic barometer?
- Martin Collier, Executive Director of The Glaser Progress Foundation
- Joe Cortright, Chair of Governor Kulongoski?s Council of Economic Advisors and Vice President and Economist at Impresa Inc.