The Stiglitz Report on the measurement of economic performance and social progress

Last week we had quotes from Joseph Stiglitz as regards his new report that asks the world to move away from measuring country progress via the bludgeon of the GDP number.

This week we have the report. Yep, click right here for your English language version of the report, snappily entitled "Report by the Commission on the Measurement of Economic Performance and Social Progress" (those econodudes make it all sound so sexy, don't they?). As for the recommendations of the report here they are, all twelve of them in title form. To understand the reasoning behind the lines, read that report. My thanks to UL for passing the report along.

Recommendation 1: When evaluating material well-being, look at income and consumption rather than production.

Recommendation 2: Emphasise the household perspective.

Recommendation 3: Consider income and consumption jointly with wealth.

Recommendation 4: Give more prominence to the distribution of income, consumption and wealth.

Recommendation 5: Broaden income measures to non-market activities.

Recommendation 6: Quality of life depends on people’s objective conditions and capabilities. Steps should be taken to improve measures of people’s health, education, personal activities and environmental conditions. In particular, substantial effort should be devoted to developing and implementing robust, reliable measures of social connections, political voice, and insecurity that can be shown to predict life satisfaction.

Recommendation 7: Quality-of-life indicators in all the dimensions covered should assess inequalities in a comprehensive way.

Recommendation 8: Surveys should be designed to assess the links between various quality-of-life domains for each person, and this information should be used when designing policies in various fields.

Recommendation 9: Statistical offices should provide the information needed to aggregate across quality-of-life dimensions, allowing the construction of different indexes.

Recommendation 10: Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey.

Recommendation 11: Sustainability assessment requires a well-identified dashboard of indicators. The distinctive feature of the components of this dashboard should be that they are interpretable as variations of some underlying “stocks”. A monetary index of sustainability has its place in such a dashboard but, under the current state of the art, it should remain essentially focused on economic aspects of sustainability.

Recommendation 12: The environmental aspects of sustainability deserve a separate followup based on a well-chosen set of physical indicators. In particular there is a need for a clear indicator of our proximity to dangerous levels of environmental damage (such as associated with climate change or the depletion of fishing stocks).

GDP: For Stiglitz, a fetish. For Twobreakfasts, a perversion

Joseph Stiglitz is a royal pain in the trasero for the dumbass-in-suit brigade of nodding donkey economists that led us into a financial crisis and still proclaim wisdom. Y'see, Stiglitz isn't like 99.999% of the dismal scientists because....

1) he's smart and actually makes sense
2) he has a Nobel prize for what he does

....and it's that second one that makes it tough for the brainless dumbasses that call themselves experts to dismiss him. So tomorrow Stiglitz is presenting his new findings on the world's obsession GDP (sponsored by Sarko de La France, et pourquoi pas?). Here's a Bloomie report quoting him and laying out a preview of what we can expect tomorrow and here are a few choice quotes from the man himself:

"GDP has increasingly become used as a measure of societal well-being and changes in the structure of the economy and our society have made it increasingly poor one."

"So many things that are important to individuals are not included in GDP,” said Stiglitz, a Columbia University professor. “There needs to be an array of numbers but we need to understand the role of each number. We may not be able to aggregate everything together."

"Most governments make a fetish out of it. If you take one message out of our report, make it avoid GDP fetishism,” he said. “The message is to encourage political leaders away from that."

Twobreakfasts take heed; the way you mentally masturbate over GDP, the whole GDP and nothing but the GDP whilst ignoring the disasterous social situation faced by whole swathes of your countrymen is about to be given lie by a man far, far smarter than you in these things. Twobreakfasts isn't the only one guilty here, but he's the smelliest proponent of growth at all (or perhaps 'any') cost. So I hope Stiglitz gets the traction he deserves on this issue and it gets the debate it deserves, though I suspect the status quo peddlers will want to sweep it all under the carpet as quickly as possible.