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gwp/time-put-gdp-out-pasture

Time to put the GDP out to pasture

Global Women's Project | Tue, Aug 11, 2009

By Kristin Sampson, GWP
Source: Center of Concern
Yesterday's New York Times featured an opinion piece by Eric Zencey, professor of historical and political studies at Empire State College, entitled “G.D.P. R.I.P.” In it, Zencey makes the case that it is time to get rid of the outmoded economic concept “gross domestic product” and replace it with one that better captures well-being and our nation’s economic health.

Yesterday's New York Times featured an opinion piece by Eric Zencey, professor of historical and political studies at Empire State College, entitled “G.D.P. R.I.P.” In it, Zencey makes the case that it is time to get rid of the outmoded economic concept “gross domestic product” and replace it with one that better captures well-being and our nation’s economic health.

Zencey argues, “To begin with, gross domestic product excludes a great deal of production that has economic value. Neither volunteer work nor unpaid domestic services (housework, child rearing, do-it-yourself home improvement) make it into the accounts, and our standard of living, our general level of economic well-being, benefits mightily from both. Nor does it include the huge economic benefit that we get directly, outside of any market, from nature.”

He further notes the deeper flaw in using a measurement of national income as an indicator of economic well-being. “In summing all economic activity in the economy, gross domestic product makes no distinction between items that are costs and items that are benefits. If you get into a fender-bender and have your car fixed, G.D.P. goes up.”

Zencey’s concise, yet thoughtful treatment of the short-coming of GDP as a measure of well-being, economic or otherwise, is a great introduction to the need for new economic concepts and models.

The Center’s Global Women’s Project (GWP), in line with feminist economics, has championed better recognition of unpaid domestic services in our economic concepts and models. Now, we are further developing the economic concepts, models and policies necessary to integrate the ecological and the social with the economic.

You’ll get the first taste of our work in the Fall 2009 issue of Center Focus.