Time for New Economic Metrics

Since the time of Adam Smith, we've used the wealth of nations as a proxy for the well-being of nations. We measure whether life is getting better by checking whether the good numbers (GDP, personal incomes, and so on) are going up and the bad numbers (unemployment, inflation, and so on) are going down. However, over the past half century, something strange has happened. The US's per capita GDP - the value of all the goods and services a nation produces divided by its population - has nearly tripled, but American well-being hasn't budged. We've grown almost three times richer but not one jot happier. There's ample evidence that in all postindustrial societies, material wealth and broader happiness are no longer closely in sync.

True, the federal government maintains a $2 billion, 10,000-person statistical apparatus to track the blips and dips of our national well-being. But here's the problem: The current economic gauges don't tell us enough about how the economy is really doing. And just as important, how the economy is doing no longer tells us enough about how the nation is really doing.

Of course, critics may scoff that it's silly to calculate gross national happiness (a metric now used in Bhutan). But it's no sillier than spending nearly $150 million a year collecting agriculture statistics, as the US does, even though 98 percent of our workforce long ago transitioned to "nonfarm" pursuits.

via Wired