First formulated during the American Great Depression, does
the Gross Domestic Product or GDP truly is the measure of human progress?
By: Ringo Bones
Our global economic system today is forever thankful of
famed economist Simon Kuznets for formulating the term Gross Domestic Product
or GDP (almost quite but not to be confused with Gross National Product or GNP) back in January 3, 1934 - so today is the GDP's 80th Birthday or 80th Anniversary - as
a mathematical quantifiable measurement of human progress of a nation-state via
its economic health. Thanks to Kuznets’ monumental work in economics during his
tenure at the Johns Hopkins University during the 1930s and the 1940s, his GDP has
since been widely recognized as the keystone – both conceptually and
statistically – of modern gross national income measurement; By the way, Simon Kuznets was born on April
30, 1901 and then won the 1971 Nobel Economics Prize (which was first
established in 1968 and awarded its first Economics Prize in 1969). Luckily,
Kuznets’ monumental work in economics during the 1930s that lead to the GDP had
him awarded a Nobel in 1971 before he passed away in July 8, 1985 – which is
fortunate since the Nobel Committee decided not to give away their Prizes
posthumously around the start of the 1970s. Although there are
detractors to the reliability of Kuznets’ GDP measurement as the true benchmark
of human progress of a certain nation-state?
Back in 1972, the King of Bhutan adopted the concept of
Gross National Happiness as the true benchmark of human progress – at least it
more or less still holds true in the remote corner of his kingdom. And back in
1990, the United Nations formulated the UN Human Development Index where gender
equality factors serve as the primary benchmark for human progress. Is Kuznets’
GDP in its current incarnation just too “inefficient” to be used as a true and
reliable benchmark for human progress?
