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The Genuine Progress Indicator (GPI) is a concept in green economics and welfare economics that has been suggested as a replacement metric for gross domestic product (GDP) as a metric of economic growth. Its advocates claim that it can more reliably distinguish worthwhile growth from uneconomic growth: almost all advocates of a GPI would accept that some economic growth is very harmful. Green economics is an unconventional approach to economics by non-economists. ...
Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution associated with it. ...
This article is about GDP in the context of economics. ...
World GDP/capita changed very little for most of human history before the industrial revolution. ...
Uneconomic growth, in welfare economics, human development theory and some forms of ecological economics, is economic growth which reflects or creates a decline in human well-being. ...
A GPI is an attempt to measure whether or not a country's growth, increased production of goods, and expanding services have actually resulted in the improvement of the welfare (or well-being) of the people in the country. The GDP vs the GPI is analogous to the difference between the Gross Profit of a company and the Net Profit; the Net Profit is what determines the long term health of the company. Accordingly, the GPI will be zero if the increases in dollar costs of crime and pollution equal the total dollar rise in production of goods and services, all other factors being constant. The well-being or quality of life of a population is an important concern in economics and political science. ...
Motivations for developing a Genuine Progress Indicator
Most economists assess the progress in welfare of the people in a country over time by comparing the gross domestic product over time, that is, by adding up the annual dollar value of all the goods and services produced within the country over successive years.
Even its inventors argue that GDP is prone to productivism or consumerism, over-valuing production and consumption of goods, and not reflecting improvement in human well-being at all. (GDP was not intended to be used as a measure of these things, and was not supposed to be a measure of goodness of any governmental decision. Its use to justify such decisions is a fairly recent phenomenon.) Productivism is the (purported) ideology that measurable economic productivity and growth is the purpose of human organization and perhaps the purpose of life itself. ...
Consumerist redirects here. ...
The well-being or quality of life of a population is an important concern in economics and political science. ...
This article or section is in need of attention from an expert on the subject. ...
GPI, by contrast, takes into account the enhancement of nature's ability to provide services and generate water, air, soil and produce. These things are part of a more inclusive ideal of progress, and are more easily perceived and believed by most people, than are raw industrial production metrics. Natures services is an umbrella term for the ways in which nature benefits humans, particularly those benefits that can be measured in economic terms. ...
Ecological yield is the harvestable growth of an ecosystem. ...
GPI also reflects sustainability: whether a country's economic activity over a year has left the country with a better or worse future possibility of repeating at least the same level of economic activity in the long run. For example, agricultural activity that uses replenishing water resources, such as river runoff, will score a higher GPI than the same level of agricultural activity that drastically lowers the water table by pumping irrigation water from wells. The Earth Day flag includes a NASA photo. ...
Some economists, notably Herman Daly, John Cobb, [1] and Philip Lawn [2] have asserted that a country's growth, increased goods production, and expanding services have both "costs" and "benefits"--not just the "benefits" that contribute to GDP. They assert that, in some situations, expanded production facilities and other free market activities damage the health, culture, and welfare of people in ways that conservative free market economists ignore. In particular, Daly, Cobb, and Lawn assert the "threshold hypothesis" that Manfred Max-Neef developed--the notion that when macroeconomic systems expand beyond a certain size, the additional benefits of growth are exceeded by the attendant costs. (Max-Neef 1995.) Herman Daly is an ecological economist and professor at the School of Public Policy of University of Maryland, College Park in the United States. ...
John Cobb can refer to: John Cobb (motorist) John Cobb (politician) This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ...
Manfred Max-Neef (b. ...
Philip Lawn has developed a theoretical framework for determining the "costs" of economic activity that balance against the "benefits" of growth in a Genuine Progress Indicator to determine whether economic development improves or harms the welfare of people. According to Lawn's model, the "costs" of economic activity include the potential harmful effects of the following costs:
- Cost of resource depletion
- Cost of crime
- Cost of ozone depletion
- Cost of family breakdown
- Cost of air, water, and noise pollution
- Loss of farmland
- Loss of wetlands. (Lawn 2003, p. 108, Table 1.)
Theoretical foundation of Genuine Progress Indicator The need for a GPI to replace biased indicators such as GDP was highlighted by analyses of uneconomic growth in the 1980s notably that of Marilyn Waring who studied biases in the UN System of National Accounts. Uneconomic growth, in welfare economics, human development theory and some forms of ecological economics, is economic growth which reflects or creates a decline in human well-being. ...
Marilyn Waring (born 1952) is a renowned New Zealand feminist, an activist for female human rights, an author and an academic. ...
The United Nations System of National Accounts (often abbreviated as SNA or UNSNA) is an international standard system of national accounts, first published in 1953. ...
By the early 1990s there was a consensus in human development theory and ecological economics that growth in money supply was actually reflective of a loss of well-being: that lacks of essential natural and social services were being paid for in cash and that this was expanding the economy but degrading life. Human development theory is an economic theory that merges older ideas from ecological economics, sustainable development, welfare economics, and feminist economics. ...
Ecological economics is a transdisciplinary field of academic research that addresses the dynamic and spatial interdependence between human economies and natural ecosystems. ...
In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ...
The matter remains controversial and is a main issue between advocates of green economics and neo-classical economics. Neoclassical economists understand the limitations of GDP for measuring human wellbeing but nevertheless regard GDP as an important, though imperfect measure of economic output and would be wary of too close an identification of GDP growth with aggregate human welfare. However GDP tends to be reported as synonymous with economic progress by journalists and politicians and the GPI seeks to correct this shorthand by providing a more encompassing measure. Green economics is an unconventional approach to economics by non-economists. ...
Neoclassical economics is the grouping of a number of schools of thought in economics. ...
The issue was brought to a head by Herman Daly in 1995 who asserted strongly that all growth that was in excess of sustainable norms (e.g. of ecological yield) had to be considered to be uneconomic. This was later underscored by John McMurtry in his book The Cancer Stage of Capitalism which likened the kind of growth that was being measured by GDP in the 1990s as being more like a tumour than like the healthy growth of an organism. Herman Daly is an ecological economist and professor at the School of Public Policy of University of Maryland, College Park in the United States. ...
Ecological yield is the harvestable growth of an ecosystem. ...
Uneconomic growth, in welfare economics, human development theory and some forms of ecological economics, is economic growth which reflects or creates a decline in human well-being. ...
Professor John McMurtry, FRSC is a moral philosopher and ethicist who works at the University of Guelph in Ontario, Canada. ...
Analysis by Robert Costanza also around 1995 of nature's services and their value showed that a great deal of degradation of nature's ability to clear waste, prevent erosion, pollinate crops, etc., was being done in the name of monetary profit opportunity: this was adding to GDP but causing a great deal of long term risk in the form of mudslides, reduced yields, lost species, water pollution, etc.. Such effects have been very marked in areas that suffered serious deforestation, notably Haiti, Indonesia, and some coastal mangrove regions of India and South America. Some of the worst land abuses for instance have been shrimp farming operations that destroyed mangroves, evicted families, left coastal lands salted and useless for agriculture, but generated a significant cash profit for those who were able to control the export market in shrimp: this has become a signal example to those who contest the idea that GDP growth is necessarily desirable. Dr. Robert Costanza(-[?]born Sept. ...
Natures services is an umbrella term for the ways in which nature benefits humans, particularly those benefits that can be measured in economic terms. ...
This article is about the process of deforestation in the environment. ...
Above and below water view at the edge of the mangal. ...
South America South America is a continent crossed by the equator, with most of its area in the Southern Hemisphere. ...
Shrimp growout pond on a farm in South Korea. ...
Hicks: Distinguish "income" from "capital depletion" Hicks (1946) pointed out that the practical purpose of calculating income is to indicate the maximum amount people can produce and consume without undermining their capacity to produce and consume the same amount in the future. From a national income perspective, it is necessary to answer the following question: ‘‘Can a nation’s entire GDP be consumed without undermining its ability to produce and consume the same GDP in the future?’’ For other persons named John Hicks, see John Hicks (disambiguation). ...
Fisher: Distinguish "enjoyment of life" from "production of goods" Fisher (1906) contended that "economic welfare depends on the psychic enjoyment of life," not just the production of goods.
Applying the Genuine Progress Indicator to legislative decisions The best known attempt to apply a GPI to legislative decisions is probably the GPI Atlantic indicator pioneered by Ronald Colman for Nova Scotia, the Alberta GPI pioneered by economist Mark Anielski to measure the long-term economic, social and environmental sustainability of the province of Alberta and the environmental and sustainable development indicators used by the Government of Canada to measure its own progress to achieving well-being goals: its Environment and Sustainable Development Indicators Initiative (Canada) is a substantial effort to justify state services in GPI terms. It assigns the Commissioner for the Environment and Sustainable Development (Canada), an officer in the Auditor-General of Canada's office, to perform the analysis and report to the House of Commons. Motto: Munit Haec et Altera Vincit(Latin) One defends and the other conquers Capital Halifax Largest city Halifax Regional Municipality Official languages English, Canadian Gaelic Government - Lieutenant-Governor Mayann E. Francis - Premier Rodney MacDonald (PC) Federal representation in Canadian Parliament - House seats 11 - Senate seats 10 Confederation July 1, 1867...
Motto: Fortis et liber(Latin) Strong and free Capital Edmonton Largest city Calgary Official languages English (see below) Government - Lieutenant-Governor Norman Kwong - Premier Ed Stelmach (PC) Federal representation in Canadian Parliament - House seats 28 - Senate seats 6 Confederation September 1, 1905 (split from Northwest Territories) (8th [Province]) Area Ranked...
Queen Elizabeth the second was the first person who created the law and the taxes and judging to count the votes from the voters from all around Canada. ...
The role of the Auditor General of Canada is to aid independent audits of federal government operations. ...
The House of Commons (French: Chambre des communes) is a component of the Parliament of Canada, along with the Sovereign (represented by the Governor General) and the Senate. ...
This has not satisfied the stricter advocates of GPI, however: Canada continues to state its overall budgetary targets in terms of reducing its debt to GDP ratio, which implies that GDP increase and debt reduction in some combination are its main priorities. And not all parties believe that anything less than total commitment of the A-G's office only to the "genuine" indicators can achieve the goals. The debt to GDP ratio is the National Debt divided by the Gross Domestic Product (GDP). ...
Despite the efforts of local communities to achieve more sustainable development, Canada lacks a federal Genuine Progress Indicator (GPI), said Green Party of Canada former leader Jim Harris. “Measuring well being through GPI is the first step to forming solid solutions to problems facing our communities,” said Harris. “Indicators such as Gross Domestic Product (GDP) show financial growth without taking into account harmful activities such as crime and pollution. A strategy that uses GPI to better reflect our concerns is essential to protecting our health and overall well being.” [3] The Green Party of Canada is a Canadian federal political party founded in 1983. ...
Jim Harris 2006 election campaign photo. ...
In the EU the Metropole efforts and the London Health Observatory methods are equivalents focused mostly on urban lifestyle. The Metropole was the name given to the English metropolitan center of the British Empire, i. ...
The EU and Canadian efforts are among the most advanced in any of the G8 or OECD nations, but there are parallel efforts to measure quality of life or standard of living in health (not strictly wealth) terms in all developed nations. This has also been a recent focus of the labour movement. Group of Eight redirects here. ...
EU redirects here. ...
The well-being or quality of life of a population is an important concern in economics and political science. ...
The standard of living refers to the quality and quantity of goods and services available to people and the way these services and goods are distributed within a population. ...
For the business meaning, see Wealth (economics). ...
A developed country is a country that is technologically advanced and that enjoys a relatively high standard of living. ...
The labour movement or labor movement is a broad term for the development of a collective organization of working people, to campaign in their own interest for better treatment from their employers and political governments, in particular through the implementation of specific laws governing labor relations. ...
The term Gross National Happiness was coined by the king of Bhutan. Gross National Happiness (GNH) is an attempt to define a standard of living in more holistic and psychological terms than Gross National Product. ...
Supporting countries
Articles - “Advantage or Illusion: Is Alberta’s Progress Sustainable?” by Mark Anielski. Encompass Vol. 5, No. 5, July/August 2001.
- "The Growth Consensus Unravels" by Jonathan Rowe. Dollars and Sense, July-August 1999, pp. 15-18, 33.
- "Real Wealth: The Genuine Progress Indicator Could Provide an Environmental Measure of the Planet's Health" by Linda Baker. E Magazine, May/June 1999, pp. 37-41.
- "The GDP Myth: Why 'Growth' Isn't Always a Good Thing" by Jonathan Rowe, and Judith Silverstein. Washington Monthly, March 1999, pp. 17-21.
- "If the GDP Is Up, Why Is America Down?" by Clifford Cobb, Ted Halstead, and Jonathan Rowe. Atlantic Monthly, October 1995, pp. 59-78.
The Washington Monthly is a magazine based in Washington DC which covers American politics and government. ...
The Atlantic Monthly (also known as The Atlantic) is an American literary/cultural magazine that was founded in November 1857. ...
References - Anielski, M, M. Griffiths, D. Pollock, A. Taylor, J. Wilson, S. Wilson. 2001. Alberta Sustainability Trends 2000: Genuine Progress Indicators Report 1961 to 1999. Pembina Institute for Appropriate Development. April 2001.
- Anielski, M. 2001. The Alberta GPI Blueprint: The Genuine Progress Indicator (GPI) Sustainable Well-Being Accounting System. Pembina Institute for Appropriate Development. September 2001.
- Anielski, M. and C. Soskolne. 2001. “Genuine Progress Indicator (GPI) Accounting: Relating Ecological Integrity to Human Health and Well-Being.” Paper in Just Ecological Integrity: The Ethics of Maintaining Planetary Life, eds. Peter Miller and Laura Westra. Lanham, Maryland: Rowman and Littlefield: pp. 83-97.
- Daly, H., 1996. Beyond Growth: The Economics of Sustainable Development. Beacon Press, Boston.
- Daly, H. & Cobb, J., 1989. For the Common Good. Beacon Press, Boston.
- Fisher, I., 1906. Nature of Capital and Income. A.M. Kelly, New York.
- Hicks, J., 1946. Value and Capital, Second Edition. Clarendon, London.
- Lawn, P.A. "A theoretical foundation to support the Index of Sustainable Economic Welfare (ISEW), Genuine Progress Indicator (GPI), and other related indexes". Ecological Economics 44 (2003) 105-118.
- Max-Neef, M. "Economic growth and quality of life". Ecological Economics '15 (1995) 115-118.
- Redefining Progress, 1995. "Gross production vs genuine progress". Excerpt from the Genuine Progress Indicator: Summary of Data and Methodology. Redefining Progress, San Francisco.
Irving Fisher (February 27, 1867 Saugerties, New York — April 29, 1947, New York) was an American economist, health campaigner, and eugenicist. ...
For other persons named John Hicks, see John Hicks (disambiguation). ...
John R. Hickss book Value and Capital (1939) is a classic exposition of microeconomic theory. ...
See also Full cost accounting (FCA) generally refers to the process of collecting and presenting information (costs as well as advantages) for each proposed alternative when a decision is necessary. ...
Green Gross Domestic Product (Green GDP) is an index of economic growth with the environmental consequences of that growth factored in. ...
This article is about GDP in the context of economics. ...
The Index of Sustainable Economic Welfare is an economic indicator intended to replace the Gross domestic product. ...
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