Use new measure for quality of life
Watching the news today talking about economics gives the impression that an increase of GDP (Growth Domestic Product) should have us jump for jubilation and its decrease should put us in a time of despair. Why is this?
It is because we have mixed up the accumulation of things with well-being. A confusion that started with the economists use of the very ambiguous word of "utility", where utility is supposed to be the satisfaction given by a product or service. The connection between a product or service and the satisfaction from them is however highly non-linear and many times the satisfaction received diminishes for one more of more. The satisfaction the products and services give vary because they are imbued with social and psychological meanings that changes from human being to human being and it diminishes because eating more of more means less, with the last bite not being quite as good as the first (diminishing marginal utilifty).
The economists usually want to simplify complex things so they equated utility with price paid and added up all prices for the products and services in the measure Gross Domestic Product (GDP), thinking that this measure could function as a measure for the well-being of a society. However, it was and is a flawed equation, missing out on what makes human beings experience well-being and flourish, and GDP as explained succinct by Bobby Kennedy
“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. It counts Whitman's rifle and Speck's knife, 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”
Furthermore GDP doesn’t take into account the environmental destruction or the one-way use of our resources that is making us in a way poorer everyday. It also make us believe one dollar for a rich person is of the same utility as one dollar of a poor person and completely ignores those without money.
So if we don’t want to fulfill Yogi Berra famous quote