Measuring Real Progress

It's not every day I find out there's an entire academic field I've never heard of. Today's new (to me) field is ecological economics, and I came to know about it because of an op-ed I read on March 15 in the Star Tribune (reprinted from the March 10 Los Angeles Times) by Robert Costanza, director of the Gund Institute for Ecological Economics at the University of Vermont.

The Times titled it "Our Three-Decade Recession: The American quality of life has been going downhill since 1975." And that covers the gist of it. Basically, Costanza argues that the use of GDP (gross domestic product) to express a general level of prosperity is misleading because GDP focuses only on things that can be traded for money, and doesn't differentiate the desirable from the undesirable. (The example he gives is an oil spill -- it may increase GDP because someone has to clean it up, but no one would seriously consider it a positive occurrence.)

Several other measures have been worked out that better express the idea of "progress" as most of us would experience them. From 1972, we have the Measure of Economic Welfare. From 1989, the Index of Sustainable Economic Welfare. And in 1995, the Genuine Progress Indicator (GPI).

Costanza tells us that none of these measures is perfect, either, but they are better approximations of our well-being than GDP. The GPI, for instance, peaked in 1975 and has been flat or down since then. Which, as he says, is consistent with life-satisfaction surveys (no reference given on what surveys he specifically means by that).

Herman Daly, one of the creators of the Index of Sustainable Economic Welfare and a former World Bank economist, calls our current state "uneconomic growth." Costanza says that this is when "further growth in economic activity (that is, GDP) is actually reducing national well-being."

Which means that the things that really matter have been in decline for the last 33 years (my entire adult life and a bit more).

I can't help but think of Wendell Berry's essays on the devaluing of rural life and the degradation of the family farming infrastructure as part of this. Of how we are constantly told that our happiness is tied up in consuming more goods, to the point where we are supposed to be worried if Target's earnings are down because we aren't buying "enough." Of how the average American is more and more disconnected from nature (including me).

I know there are many things to be hopeful about, too, and in some ways this way of thinking about progress and well-being makes me more hopeful -- because I realize that the malaise is not all in my head. There is a quantifiable way to express the fact that we are on the wrong track.

So thanks to Robert Costanza and his academic field. Now that I've heard of ecological economics, I won't forget it.