Does Material Progress Matter?
The conundrum of GDP
Risk & Progress| A hub for essays that explore risk, human progress, and your potential. My mission is to educate, inspire, and invest in concepts that promote a better future for all. Subscriptions and new essays are free and always will be. Paid subscribers gain access to the full archives.
The headline might read that the GDP grew 2.1 percent this quarter, but does this really matter? Few among us stop to think about what GDP is, what it actually measures, or what it means for them when it grows or shrinks. For the cynical among us, the growth of GDP represents the expansion of human greed and environmental destruction. But it turns out that GDP is a reasonably good indicator of material progress and material progress is anything but greedy or destructive.
A Brief History of GDP
Gross Domestic Product, or GDP, is a metric that was born out of a World War 2 need to determine the total productive capacity of an economy to support a war effort. The metric was never intended to be a measure of well-being for the inhabitants of that economy. Nonetheless, its cousin, GDP per capita, or the GDP divided by the total population, has become commonly used to measure well-being regardless.
