The word “wealth” comes from the Old English word weal (well-being) and th(condition). So the word wealth literally means “the conditions of well being” or “the conditions of being happy and prosperous.” It says nothing about getting rich.
Economists might well need a reminder of this as they tout the so-called necessity of yearly GDP growth. We know that endless growth means endless consumption, and endless consumption means eventual destruction. Of course, this is madness, but we’re stuck in a system that supports it and bombarded with (corporate) messages that tell us that growth is good.
We often hear news of GDP growth slowing and the ensuing panic as if it’s the end of the world, but I hardly ever feel any difference in my life. Do you? For example, when China surpassed Japan’s GDP into the #2 spot after the US a few years ago, it felt like a big hit. Well, maybe for the egos of some Japanese economists and in particular their US allies who see everything as a potential threat (the US is a bit insecure like that). But there are still about 1001 reasons I’d rather live in Japan than China, and it has little to do with GDP, and more to do with healthcare, safety, corruption, and escalators that grind people up.
The Growth Delusion outlines, very bluntly, what GDP misses, why we should scrap it, and what our alternatives are. The book is accesible, witty and get’s pretty deep without sounding too extreme.
Here’s a quote from the book about the conundrum between technological advancement and GDP measurement:
“The goal of disruptive technology companies, in the statistical sense, is to reduce GDP,” Page said when I found him lurking in one of the corridors. “To wipe out transaction costs, which are being measured, and to replace them with convenience, which is not being measured. So the economy is shrinking, but everyone is getting a better deal. Lots of what tech is doing is destroying what wasn’t needed. The end result is you’re going to have less of an economy, but higher welfare.”