Is GDP a valid measure of economic prosperity?
Uploaded by krolik on Jan 09, 2008
GDP OPINION PAPER
Once upon a time, in a land far, far away, a small island existed. This island was the best place in the world to live in, it was in the Caribbean Sea, great tropical weather, sandy beaches, but most importantly a GDP of two Trillion US dollars. Who can argue that this island is a bad place to live on, who can argue against statistics? Statistically each person was suppose to have two trillion dollars, but realistically there were only two people on the island, one being the richest man in the world, the other was his broke slave. Statistically it was by far the best place to live in but realistically there was 50% unemployment rate, 50% mortal disease rate, etc. Who can now say that GDP is an accurate indicator of a nation’s well being, how can u compare an economically active country with its GDP to an island with one rich person and his slave?
The above example is an extreme case but it is an indicator of just one of the issues that GDP poses when it is used to measure a countries’ well being. When the GDP system was invented it was made to measure just the domestic production and nothing more, today it is being used as a means for determining which country is better to live in and I think that this is ludicrous to say the least. There are many things to consider when setting a standard of living or ranking a country, money isn’t the only one and even when it is GDP is not an accurate way of measuring economic growth, on the whole GDP lacks many essential elements, thus making it unfit to measure anything let alone the overall ranking of a country in the world and economic growth.
On some level GDP does measure economic growth, but what else is associated with economic growth, is economic growth necessarily good or can it sometimes be bad, what does GDP keep a blind eye on? In today’s society because of globalization and the development of international trade, countries tend to compare themselves on a global scale using GDP measurements. Ideally whoever has more economic growth and GDP is the better place to be a citizen of (World Bank Statistics, 2004) , but where one country could be growing more financially, another one may have better standards of...