Tuesday, September 15, 2009

a Joie de Vivre Index

From now on, to gauge the economy's health, France will consider well-being in addition to the classic measure of gross domestic product, Mr. Sarkozy said Monday in a speech at the Sorbonne, part of the University of Paris.

In the speech presenting the findings of a committee headed by Nobel Prize-winning economist Joseph Stiglitz, the president said new measures are needed in the wake of the financial crisis, which was triggered by an overreliance on free-market principles. "If the market was the solution to all problems and was never wrong, then why are we in such a situation?" asked Mr. Sarkozy. "We need to change criteria."

These past two years have certainly been rough. GDP might have contracted a few percentage points, but the quality of life has deteriorated far more for many people.

Mr. Sarkozy isn't the first politician to criticize GDP, which measures a country's aggregate output, as the dominant yardstick of economic performance. In 1968, Robert Kennedy complained during his U.S. presidential campaign that GDP "counts napalm and counts nuclear warheads." Since then, many economists have said GDP isn't a fully adequate way to measure growth, but no one has come up with a viable alternative.

Taking into account well-being would likely paint a rosier picture of the economy in France [compared to the 3% GDP contraction expected for 2009], where workers take long vacations and have generous social-security benefits.

Healthy and Wealthy

Nicolas Sarkozy is suggesting gauges of economic health
encompass well-being in addition to GDP. Measures could include:

  • Employment levels
  • Health care
  • Vacation
  • Household assets and income
  • Consumption
  • Education
Well, there is much to be said for this approach

No comments:

Post a Comment