Is GDP A Detrimental Way to Determine the Success of A Nation?

WHAT IS GDP?

GDP is a tool of measurement used by the International Monetary Fund and the World Bank to measure the wellbeing of nations. GDP compiles the value of all final goods and services produced or traded for money within a given period of time. This includes money spent on oil drilling, logging, and war. It includes money made from processes that release dangerous toxins; it includes money spent on mass incarceration and unhealthy food; it includes money spent to build oil pipelines and to drop bombs, and it includes money made from industries that dump pollutants into our rivers, streams, and oceans. A Boston University journal explains, “Economists have warned since its introduction that GDP is a specialized tool, and treating it as an indicator of general well-being is inaccurate & dangerous.”

WHY DO WE CONTINUE TO USE GDP TO MEASURE NATIONAL WELLBEING?

We continue to measure national wellbeing with GDP because there has not been a great enough demand for a new scale of measurement. To create change, we have to be aware of the issue, we have to be aware of potential alternatives, and we have to take action.

ARE THERE BETTER OPTIONS?

Efforts to create Green GDPs “factor estimates for environmental degradation and depletion of natural resources”. The Genuine Savings, developed by the World Bank, factors in global damages from carbon emissions and considers the capital required for human society to thrive.

The Genuine Progress Indicator (GPI) seeks to correct the weaknesses of GDP measurement by factoring in the sustainability of income. A nation that has a high GDP from oil drilling will have a low GPI because income from oil drilling harms our environment. 

The Ecological Footprint accounts for the flow of energy and matter in and out of the human economy and the area of productive land and water required to support this flow. Subjective Well-Being seeks to measure people’s satisfaction in quality of life; it seeks to measure the extent to which human needs are being met.

A Google search of “alternative GDP measurements” will reveal several more schemes with goals of creating wellbeing measurements that reward planet-healing activities.

The nation of Bhutan has rejected the use of GDP as a measurement of national wellbeing since 1971. Instead, Bhutan measures Gross National Happiness.


Bhutan has pledged carbon neutrality and promises to leave 60% of its land under forest cover. The nation is founded on equitable social development, cultural preservation, conservation of the environment, and promotion of good governance. There is a national ban on export logging and an enforced pedestrian-only day every month.

Thakur Singh Powdvel, Bhutan's minister of education, explains, "GNH is an aspiration, a set of guiding principles through which we are navigating our path towards a sustainable and equitable society. We believe the world needs to do the same before it is too late.”


Bhutan’s belief that wellbeing should take precedence over material growth has created important changes over the last twenty years. Bhutan has doubled its life expectancy, enrolled almost 100% of its kids in primary school, and completely overhauled its infrastructure.

Powdvel explains, “it’s easy to mine the land and fish the seas and get rich. Yet we believe you cannot have a prosperous nation in the long run that does not conserve its natural environment or take care of the wellbeing of its people.”


When our measure of success rises in connection to detrimental activities like water pollution, we encourage economic activity even if it has dangerous consequences for our health. Isn’t it highly likely that we would have a cleaner and healthier planet, and cleaner and healthier water, if we adopted a new measure of national wellbeing that penalized harmful activity?


Do you think the world should adopt a measurement of national wellbeing like Bhutan’s measurement of Gross National Happiness? Would a new measurement of national wellbeing result in cleaner water? We’d love to hear your thoughts—please share them in the comments below!

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