Yet another call is being made to adjust the lens through which we see our world. In the 19 September 2009 Economist Finance and economics column the venerable newspaper makes the call to move beyond GDP to embrace broader measures of human well-being. This report focused on a French commission’s recommendations.

The full article can be found here.

The following are high level observations from the commission:

• GDP does not account for depreciation of capital goods, thus overstates production, often because the price of some things has gone to zero
• State health-care, education, owner-occupied housing and unpaid child care estimates are very poorly estimated
• Statisticians should focus on incomes, consumption and wealth and move away from total production (with new accounting France’s GDP went from 73% of the US to 87%)
• One number might not be able to reflect the subtleties of current account, let alone speculating about the future value of current investments

The commission further suggests:

• Developing “quality of life” measures as wealth has proven to be a poor indicator of well-being
• Create future looking numbers that capture things like education and environmental issues that the current generation will pass on to the next

I agree with the recommendations from the Economist and conclude:

• Statistics independent of the government (I would even suggest, of governments, perhaps an international body that can create an apples to apples picture of world economic health, and applying new learning consistently across the globe)
• Legislators need to understand the impact of moving to multiple measures as special interest groups will use statistics to manipulate logic and emotion
• The we get on with the task of figuring out measures that are more meaningful than the current industrial age legacy by which which judge our success.

It is time to embrace the knowledge economy, the role of environment and sustainability to economic health and the perceptions of individuals. We are not here to serve the productive capacity of nations, they exist to serve the citizens of the world.  Until nations translate our well-being into something other than factors of production, many points of dissonance between citizens and government will remain. Behavior, it seems, is often predicated on what we measure. It is indeed time to measure things that really matter.

Further reporting from the FT here. 

The full report can be found here.