Transcript GEOG 352: Day 16

GDP and Human Needs/
Well-being
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Good example of alternative
economic practice last
weekend: our Co-op’s
semi-annual swap.
Final exam will be Tuesday,
December 9th at 1 p.m. in
this room.
Am working on the mid-terms, but it will
take a while.
 Today we were to have four presenters –
Jesse on the limits of GDP as a measure of
social well-being, Jayme on the Genuine
Progress Indicator (GPI), Zane on Gross
National Happiness, and Maya on needs and
satisfiers (Max-Neef). Jayme will not be able
to come.
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“Our Gross National Product...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..., 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” – Robert F. Kennedy, 1968
Most economists use GDP nowadays rather than GNP.
DEFINITION of 'Gross Domestic Product - GDP‘:
The monetary value of all the finished goods and services
produced within a country's borders in a specific time period,
though GDP is usually calculated on an annual basis. It includes
all of private and public consumption, government outlays,
investments and exports less imports that occur within a defined
territory.
GDP = C + G + I + NX
where:
"C" is equal to all private consumption, or consumer spending, in
a nation's economy
"G" is the sum of government spending
"I" is the sum of all the country's businesses spending on capital
"NX" is the nation's total net exports, calculated as total exports
minus total imports. (NX = Exports - Imports)
Source: Investopedia
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Jayme will cover GPI and Zane will cover Gross
National Happiness.
There are many others. I will briefly mention:
Index of Sustainable Economic Welfare (ISEW),
the Happy Planet Index, and the UN’s Human
Development Index (HDI).
ISEW was a forerunner of GPI and was
developed by Herman Daly and his
collaborators. The basic idea is to subtract
the ‘bads’ from GDP and add ‘goods’ not
encompassed by it.
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The Happy Planet Index was developed by the New
Economics Foundation in Britain as a measure of an
economy’s efficiency in producing human
happiness and well-being. It consists of three
measures: life expectancy at birth, life satisfaction,
and ecological footprint.
The UN’s Human Development Index (HDI) uses
three measures as proxies for well-being:
 life expectancy at birth;
 literacy rate and school enrollment,
 And real GDP per capita adjusted to reflect
purchasing power.
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To give an example of each,
New Zealand and the U.S. have
similar life expectancies (NZ is
slightly higher) and similar life
satisfaction, but NZ uses half
the resources per capita as the
U.S.
Moldava and Honduras have
similar HDI ratings, but
Honduras scores 30 points
higher on HPI because life
satisfaction there is more
twice Moldava’s!
So, now I will turn it over to
Zane and Maya.