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It's Not About Growth

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Seventy-some years later, however, the GDP' s faith in unbridled growth and efficiency is not as useful. Our curren worldwide economic and environmental crises suggest that we need a new definition of progress and a new way of accounting for the costs generated by economic activity. For instance, under the GDP, environmental pollution ends up being a positive because it creates economic activity - and is even counted positively twice: once when it's created and again when it's cleaned up. And the result ofthat pollution, which is often illness such as cancer, also ends up on the plus side of the ledger because it, too, creates economic activity. Shouldn't a true set of indicators include a way to debit the accounts for the cost of degradation of wetlands and the depletion of the ozone layer and oil? Shouldn't it adjust for factors such as the value of household and volunteer work, which are invisible in the GDP because no money changes hands?

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									                   It’s Not About Growth
 Alternative Economic Indicators Measure the Quality of Life
                                                       by Wendy Priesnitz


T   raditionally, a country’s economic
    health and well-being is measured by
something called the Gross Domestic
                                                activity. Shouldn’t a true set of indicators
                                                include a way to debit the accounts for
                                                the cost of degradation of wetlands and
                                                                                               nomic, health, social and environmental
                                                                                               factors. In effect, the GDP could be seen
                                                                                               as gross profit of a company and the GPI
Product (GDP) or its cousin, the Gross          the depletion of the ozone layer and oil?      as its net profit – or revenue minus the
National Product (GNP). The media ea-           Shouldn’t it adjust for factors such as the    costs incurred. If the costs associated
gerly report the number on a monthly ba-        value of household and volunteer work,         with our way of life were to equal the fi-
sis and its rise or fall is used as an          which are invisible in the GDP because         nancial gains, the GPI would be zero.
indicator of how well things are pro-           no money changes hands?                            A number of countries have used the
gressing or not. A recession, for instance,          A think tank called Redefining Prog-      GPI to recalculate their GDP. And in
is defined as two consecutive quarters of       ress, founded in California in 1994, puts      Canada, Nova Scotia and Alberta have
negative GDP growth.                            it this way: “We believe that progress is      pioneered its use provincially. In 2000,
     But GDP is really just a measure of        not measured by the quantity of goods          the National Roundtable on the Environ-
national spending with no distinctions          we consume, how fast our economy is            ment and the Economy began a three-
made between transactions that add to           growing or how much financial wealth is        year multi-stakeholder program aimed at
well-being and those that diminish it. As       being amassed. We believe progress is          developing a small set of indicators to
long as money changes hands, the GDP            measured by how well we equitably dis-         track whether Canada’s economic activi-
increases.                                      tribute wealth, income and access to cul-      ties threatened the way of life for future
     The fact that this indicator is based      tural amenities; diversify and stabilize       generations. The Environment and Sus-
upon economic growth is not surprising.         our economic base; protect and restore         tainable Development Indicators (E
								
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