On March 18, 1968, the candidate for Presidential Elections in the USA Robert Kennedy challenged the suitability of GDP as an indicator of the well-being of the country: “It tells everything about America, except why we are proud to be Americans”. Almost fifty years later, with other presidential candidates vying for power in the USA, Davos economists assessed the same issue.
Can we still measure the country by its GDP?
IMF Director Christine Lagarde, Nobel Prize-winning economist Joseph Stiglitz, and MIT professor Erik Brynjolfsson stressed that as the world changes, so too should the way we measure progress.
Simon Kuznets, the man behind GDP as an indicator, already warned in the late 1930s that it was not a suitable measure of a country’s economic development. It counts the things that we are buying and selling, but it is quite possible for GDP to go in the opposite direction of welfare.
In Davos, IMF director Christine Lagarde suggested that we have to go back to GDP, the calculation of productivity, the value of things – in order to assess, and probably change, the way we look at the economy. A new parameter to measure, namely value.
Progress is value and innovation, an efficient and flexible problem-solving approach.
Our country mostly reflects what happens in everyday micro-worlds: school, university, work, social measures. These are all interconnected and independent factors, consequences that build our present.
To Robert Kennedy’s mind, “GDP measures everything, except what makes life worthwhile”.
Our duty, in each field, is to find our own indicator, the one that measures wellbeing and properly values what makes life worthwhile. This is first and foremost the mission for all of us in the field of education, to change the individual for the better and, by extension, the whole country too.