GEOG 352: Day 16

GDP and Human Needs/Well-being

Good example of alternative economic practice last weekend: our Co-op’s semi-annual swap.

Final exam will be Tuesday, December 9th at 1 p.m. in

this room.

Housekeeping Items

Am working on the mid-terms, but it will take a while.

Today we were to have four presenters – Jesse on the limits of GDP as a measure of social well-being, Jayme on the Genuine Progress Indicator (GPI), Zane on Gross National Happiness, and Maya on needs and

satisfiers (Max-Neef). Jayme will not be able to come.

Housekeeping Items

We were talking about paying for work experience last class…

“Our Gross National Product...counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities..., and the television programs which glorify violence in order to sell toys to our children. Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. 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” – Robert F. Kennedy, 1968

Most economists use GDP nowadays rather than GNP. DEFINITION of 'Gross Domestic Product - GDP‘:The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

GDP = C + G + I + NXwhere:"C" is equal to all private consumption, or consumer spending, in a nation's economy"G" is the sum of government spending"I" is the sum of all the country's businesses spending on capital"NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)

Source: Investopedia

Jayme will cover GPI and Zane will cover Gross National Happiness.

There are many others. I will briefly mention: Index of Sustainable Economic Welfare (ISEW), the Happy Planet Index, and the UN’s Human Development Index (HDI).

ISEW was a forerunner of GPI and was developed by Herman Daly and his collaborators. The basic idea is to subtract the ‘bads’ from GDP and add ‘goods’ not encompassed by it.

Alternatives to GDP

The Happy Planet Index was developed by the New Economics Foundation in Britain as a measure of an economy’s efficiency in producing human happiness and well-being. It consists of three measures: life expectancy at birth, life satisfaction, and ecological footprint.

The UN’s Human Development Index (HDI) uses three measures as proxies for well-being: life expectancy at birth; literacy rate and school enrollment, And real GDP per capita adjusted to reflect

purchasing power.

Alternatives to GDP

To give an example of each, New Zealand and the U.S. have similar life expectancies (NZ is slightly higher) and similar life satisfaction, but NZ uses half the resources per capita as the U.S.

Moldava and Honduras have similar HDI ratings, but Honduras scores 30 points higher on HPI because life satisfaction there is more twice Moldava’s!

So, now I will turn it over to Zane and Maya.

Alternatives to GDP