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Outside In | The fallacy of GDP as a measure of prosperity: prison expenditure counts, but housework doesn’t

David Dodwell says it was Robert Kennedy who reminded the world that gross national product does not measure what is most valuable in a society

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Women’s unpaid work in the home is not accounted for in GDP calculations. Photo: David Wong

It is sometimes uncanny where research for these articles can take me. My aim was to take up David Pilling’s excellent book, The Growth Delusion, to explore how badly the idea of gross national product serves us as a measure of our wealth, progress or happiness. First, however, I must mention the unsettling red herring that arose as I began research. 

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For anyone who has taken an interest in what GNP or economic growth are all about – putting aside Simon Kuznets, who in the 1930s was tasked with building an economic measurement tool to tackle the Great Depression – the journey may start with an eloquent speech by US senator Robert Kennedy at the University of Kansas in 1968, both on the shortcomings of our measures of economic strength and the then ongoing Vietnam war. 

“Too much and for too long, we seem to have surrendered personal excellence and community values in the mere accumulation of material things. Our gross national product, now, is over US$800 billion a year, but that gross national product … counts air pollution and cigarette advertising and ambulances to clear our highways of carnage,” he protested. GNP, he said, “counts special locks for our doors, and jails for the people who break them … counts napalm and counts nuclear warheads and armoured cars for the police to fight the riots in our cities”, but not “the health of our children, the quality of their education or the joy of their play”. 

“It measures everything,” he said, “except that which makes life worthwhile.” 

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What was so unsettling – apart from the reminder that the US’ problems remain as great as ever even though the GNP has grown 23-fold since Kennedy spoke – was that six weeks later he was dead, assassinated after winning a primary in his bid for the presidency. 

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