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Sep. 16 2009 - 12:28 pm | 116 views | 0 recommendations | 3 comments

Stiglitz, Sarkozy push for new measures of country performance

Nicolas Sarkozy, a watermark was present that ...

Sarkozy: the man with a new plan via Wikipedia

This is brilliant.

France’s president on Monday urged other countries to adopt proposed new measures of economic output unveiled by a panel of international economists led by Joseph Stiglitz, the US Nobel Prize winner. via “France to count happiness in GDP” at FT.com

What are these new measures and why do we need them?

Conventional metrics of national accounting, like GDP, essentially measure economic output alone. Economic output equals a country’s performance. Case closed.

The new measures proposed by the International Commission on the Measurement of Economic Performance and Social Progress, would offer a more comprehensive method for measuring a country’s performance by taking into consideration people’s well-being and the sustainability of a country’s economy and natural resources.

Mr. Sarkozy is a bit of a screw-ball, and admittedly this sounds like a pretty screwy idea at first. But Sarkozy makes a good point: he says the world has become trapped in a “cult of figures.” The famed Mr. Stiglitz elaborates:

While there is no single indicator that can capture something as complex as our society, the metrics commonly used, such as gross domestic product, suggest a trade-off: one can improve the environment only by sacrificing growth. But if we had a comprehensive measure of well-being, perhaps we would see this as a false choice. Such a metric might indicate an increase in wellbeing as the environment improved, even if conventionally measured output went down. Via “Towards a better measure of well-being” at FT.com

Essentailly, Stiglitz argues that if we use the wrong metrics, we will strive for the wrong things. Health care in America illustrates this beautifully. The US spends 15 percent of its GDP on health, while France spends 11 percent. Yet if GDP accounted for the outcomes of our expensive health care instead of just how much money we spend, the report suggests it would cut US GDP per capita by a third. This would be a mighty blow to our collective egos, yes, but perhaps it would encourage us to focus on preventative care and health outcomes instead of just throwing money at insurance companies. Costs would finally come down and we’d be a healthier nation for it.

Stiglitz asks, “Should we ‘punish’ a country – in terms of our measure of performance – if it decides to take some of the fruits of the increase in productivity from the advancement of knowledge in the form of leisure, rather than just consuming more and more goods?” No. But we currently do.

To me it seems axiomatic that as a county’s wealth grows, so should the well-being of its citizens. I have been left to wonder how it is, then, that the world’s richest country fails to provide its citizens with paid time-off from work, paid sick leave, paid parental leave, or universal health care. On all of these measures Europeans are far ahead, yet the world still looks to the American model for “growth.” Americans, for all our wealth, are only granted an average of 10 days off from work a year, while Europeans are guaranteed an average of four weeks. Most European countries provide at least a year of paid maternity leave and even some paternity leave. No European will ever go bankrupt because of health care bills. What is “wealth” without well-being?

The fact is that we’ve confused our ends with our means—and our system of metrics continues to shove us along this path. “Our economy is supposed to increase our well-being,” Stiglitz reminds us. “It, too, is not an end in itself.”

– Liz


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  1. collapse expand

    This is by far the best political idea ever!
    I think that everyone should support that idea, left or right. My experiences as a French man leaving in the US lead me to say “When a Republican proposes something that contains social advantages, TAKE IT!”

    But I wont hold my breath on that one…

  2. collapse expand

    I wonder if this has something to do with the idea of short people being happier?

  3. collapse expand

    I think it’s a brilliant idea. It’s such a radical shift in thinking to value something as ephemeral as “leisure” instead of working hard to buy tons of stuff we don’t need and jam into storage lockers — gulping meals in cars or at our desks in the rush to “be efficient.” I doubt anyone on their deathbed, or in their eulogy, gives a crap about how “productive” they were relative to more personal, intimate and less commercially useful values.

    It’s madness.

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We’re two twenty-somethings who joined the real world armed with diplomas worth a combined half million dollars from Middlebury College—only to find out that we didn’t have a clue. No one prepared us for the inflexibility of the whole workplace set-up. No one warned us that the Mommies were at War, or that employers still assumed men were okay seeing their kids every other week, or that the U.S. doesn’t guarantee paid parental leave, vacation, or sick leave. The current work-life model isn’t working. Let’s talk about it.

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