GDP And WELLBEING

GDP And WELLBEING

GDP is the gross domestic product, which measures the total monetary value of goods and services produced within a country or an economy. GDP is one of the most common stools used in economics to determine how well a government performs regarding economic growth and progress. However, there are arguments on how GDP also has its shortcomings.

An article published by CBS News entitled “Why GDP fails as a measure of well being” argues that GDP is a “poor way” to assess an economy’s health. The article enumerated some textbook problems regarding why GDP is a poor measure. These problems where that GDP counts both good and bad things in the economy does not consider leisure time, only considers goods and services produced and consumed in official markets, does not present the distribution of goods and does not consider pollution or environmental costs, which are factors deemed important as they also affect the economy’s growth as well as the standard of living in a country. What I agree most with the author’s assessment was how GDP truly does not consider the benefit we gain from technological advancement in terms of free apps, easy access to information, and the convenience technology brings to consumers. I agree with the points cited by the author, as GDP only considers that with numeral or monetary value. However, with the rate of advancement today mostly brought about by technological breakthroughs, we need to think that the basis for the standard of living does not just concern numeral data but, more than that, convenience, contentment and even happiness which GDP cannot easily capture and measure. Suppose we only base growth and well-being on monetary measures of GDP. In that case, we fail to consider the value of the total well-being of people in the economy who contribute to economic sustainability. Thus, the article’s author points out the need to determine a more comprehensive measure offered by the GDP formula.

As I read the article, I realized that some factors contributing to my well-being and happiness are excluded from the GDP. It does not consider the value I put on my quality time with family and friends, a harmonious and just workplace, and the importance of a healthy and thriving environment. It does not consider my use of technology for convenience and free information which increases my efficiency and productivity at work. GDP fails to consider the accessibility of connection promoted by social media platforms which can be mediums for business, investment and personal satisfaction. These are factors and indicators that add value to my standard of living, my well-being as a person and as a contributor to the economy. The only value considered in GDP is my income, my monetary contribution as a consumer, and my numeral productivity as an employee. Thus, I can say that my well-being and happiness are measured more than what GDP considers.

This aThiwell-being and happiness preclude considering how our technological tools have improved my leisure time. GDP fails to measure my work efficiency as the goods I have produced in the economy remain unchanged. Technology has made my work easier, enabling me to accomplish my work faster at my convenience. Since I have finished my job efficiently, I do not have to render extra time at work to achieve the desired output goal or salary. This gives me spare time for myself, my family and my friends. This is one thing that GDP cannot reflect in its measurement. My output level and salary can be the same as someone from a different country working more hours. My leisure time can make me more productive in other areas that GDP can no longer measure and gives me happiness that GDP cannot put a value on. Thus, we can say that while another person in a different country who works more hours has the same output level and salary as me, we do not have the same level of well-being. I am more happy and content because my leisure time GDP excludes this factor in an economy and, thus, cannot present a comprehensive measurement of an economy’s thorough well-being.

References

https://www.cbsnews.com/news/why-gdp-fails-as-a-measure-of-well-being/

https://www.khanacademy.org/economics-finance-domain/macroeconomics/macro-economic-indicators-and-the-business-cycle/macro-limitations-of-gdp/a/how-well-gdp-measures-the-well-being-of-society-cnx

https://inflab.medium.com/is-gdp-a-good-measure-of-economic-well-being-7ad449ded139

https://www.scientificamerican.com/article/gdp-is-the-wrong-tool-for-measuring-what-matters/

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GDP AndWELLBEINGG

Read through the shortcomings of GDP identified in your textbook. Next, look at the article published by CBS News. This Links to an external site. Do you agree with the author’s assessment that GDP fails to measure well-being? Why (or why not)? Are there things that contribute to your well-being and happiness but are excluded from the calculation of GDP? Describe an example and why it might be excluded from the GDP calculation.