Growth does not equal progress: Why GDP is (increasingly) obsolete

COMMENTARY | February 21, 2012

Gross Domestic Product badly overstates the benefits of unequal growth and understates the value of intangibles, writes an advocate of alternative measurements. As a result, journalists should stop granting it talismanic significance in defining the nation's progress.

By Lew Daly
ldaly@demos.org

A pervasive narrative linking growth in the Gross Domestic Product (GDP) to social progress has shielded our leaders from accountability for a reality in which market growth and real social progress have actually diverged -- even sharply diverged -- in some ways. It's past time we found another way to measure our nation’s progress.

The idea of GDP, or "national income accounting," was introduced in the 1930s, in response to the Great Depression. With a 30 percent contraction of the economy unfolding, it certainly made sense to devise a common national standard for measuring economic output within our borders.