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Economics: how to describe how well people are doing
3 years ago

This thread is for ideas about economic measures - ways to measure how well we are doing as a society on this planet.  So far nations talk a lot about GDP and GNP, but this ignores a lot.

I think that one of the fundamental questions here is: what is it that truly matters? What is real wealth?


All ideas are welcome!

Small is Beautiful
3 years ago

Good Read

Small is Beautiful
Economics as if People Mattered
by E. F. Schumacher

3 years ago

Thanks Kit, this looks very interesting!

3 years ago

I downloaded a copy of this book at this site:


I hesitate to post this link since I don't know the site. Always be cautious and decide for yourself if you want to visit a site and download from it. Don't believe what I say without checking first.


I'll read this and leave comment afterward.


love to you all,

Charmaine x

3 years ago

This is a recurring idea in the UK, the current administration has allocated a couple of million pounds to figure out a happiness index. It's a nice idea, after all, what do conventional measures of wealth matter so long as we are happy? Trouble is, it all tends to get a bit vague and is not something easy to calculate in any scientific way... which is probably why previous governments have quietly abandoned the plan after some initial enthusiasm.

Unsustainable growth
3 years ago

An economic system that does not require continuous growth is what will eventually be in place everywhere, because growth can never continue for ever. Capitalism is great in that it rewards people for being inventive, smart and hardworking, but if people continuously abuse the environment in order to promote growth, we have a problem. We need to have a progressive capitalist system that does not reward the destruction of nature, but instead rewards it. People must realize that being extremely rich cannot buy you happiness, although it can help.

Economics: How to describe how well people are doing
3 years ago

My ideas may take a bit of digesting. The current economic system used on this planet is wholly unworkable. It was created by the few to control all the planet's wealth while contributing nothing to the world. It is capitalism in its purest sense.
Capitalism does not work. This does not mean that Communism does as the way the Capitalist and the top dogs in any Communist regime act are extremely similar. The effects upon the masses are also extremely similar. The main difference is that in a capitalistic system some of the people can rise without selling their soul to the party.
What is needed is a production based economy. The individual's production as part of the whole is rewarded based upon his ability to produce a product that others desire in sufficient quantity and quality as to make it viable.
For instance a fellow who makes buggy whips. If he makes the best buggy whip in sufficient quantity he can make a nice living for himself. He knows what his product is worth to others and the quality at which the product must be made and the number of buggy whips he has to produce to make a good living. If he wants to be the king pin of buggy whip makers he finds more uses for his product and extends his business to keep up with the demand for buggy whips that he has created. He pays his employees based upon their production so that anyone of his employees can earn a very good living. The same goes for any service based industry. An accountant delivers a service that is of good quality and in good volume then he makes a good living. If he hires others and has several people producing in quantity with quality then each of them will be paid upon their own production and they are paid well.
Then one turns to the people who produce no product or service - the professional investor, the money lender. These people produce nothing. They seek to create wealth out of others without giving anything of themselves to any corporate activity.
One must understand what a valuable product or service is. It is not whether you feel that you need that product or service but whether there is any demand for that product or service. In NYC one has little use for goat herders but this is a hot commodity in other areas of the earth. Is the product or service that you create exchangeable with others for their goods and services? In large corporations you may find that your product is only exchangeable within that organization. For instance, a receptionist who greets everyone with a friendly smile and makes them feel welcomed into the company may be an absolute treasure but the fellow down the street is not going to exchange anything with her directly. When he buys the buggy whip that her company makes then he is exchanging with the company which exchanges with her.
I focus upon exchange here as if one does not have a product or service that anyone wants then they are not going to give you anything in exchange. You can take a magic rock that is worth a billion dollars out to Wall Street and tell anyone and everyone that it is the only hope for mankind of continually repelling Martian attacks. This magic rock has no value to others so no one is going to buy it. So one's product or service must have value to others because only then is it exchangeable.
This is where governments enter the picture. The government does not have the role of "keeping you safe". If you depend on any government to do that you had best begin writing your will right away. A major portion of a government's role is to provide a medium of exchange. Governments around the world have been seduced into this idea that they had to have private backing for their money and to really look after it for poor addled politicians who could also make a good buck out of this.
This is all that money is. It saves one from carting around a van full of buggy whips or IOUs for your services at the local grocery store. Money is not wealth.
All the wealth that any individual has is his own ability to produce a product or service that others desire.

3 years ago

Hi everyone, thank you for your comments. Kit I think your post is very good. I have read Cobb and Daly's 1989 book "Ecological Economics" (or most of it), and both of the Affluenza books - there is one for America and one for Australia. (Maybe more have come out since I read those?) Kit I have found a copy of Schumacher's book at my local library and I am reading it. So far I have to say that I am astounded by Keynes' comment to the effect that society would have to wait another 100 years (when he made his comment) before it could afford to be ethical.

James I love your post too. I have heard about the King of Bhutan's interest in gross national happiness as an economic measure, and I wonder if that might tie in with Schumacher's discussion of Buddhism. The article at the link looks wonderful - David Cameron's statements in support of a new economic measure that includes real wellbeing, sound great.  Gross national happiness may be not completely straightforward to define, but I think that it is worth the effort to try to find something that might be useful. It sounds good that Britain is doing research into it towards this. Research in psychology and sociology can probably shed some insights there too. I hope that the British initiative will progress further and lead to real and lasting change.


I must say that a big concern for me is environmental sustainability. I would like economic measures to include the welfare of other species than our own, and measures of the health of ecosystems. 

Jake and John, thank you for your comments.  I think it is wonderful that people are thinking about this and commenting!  I'm really wanting this thread however to be about the starting point of it all - how we begin to formulate economics, and what things matter and should be included.  I might start a new thread shortly about possible solutions. To figure out what a good economic system might be, I want to be clear about what the starting point is, and how we get from there to construct an economic system. Sorry - I don't mean to put you off. I love comments, but I like them in the right places - call me a neat freak!

Thank you to all of you for thinking about this and posting.



3 years ago

There were ideas in the past (see Adam Smith) where trade and economic growth were associated with peace. It was thought that trading countries bringing each other some level of prosperity would never go to war with one another, the ensuing economic losses being too great. Merchants have often been against forms of agressive conflict WHERE THEIR INTERESTS were at stake!!! But looks like they may have become FOR war, WHEN THEIR INTERESTS WERE CONCERNED.....(

That said, my initial point was to add a comment on the measures of prosperity. There are several indexes that are presently used for development measurement. The Human Development Index (HDI) was developed in 1990 by Amartya Sen, a well-known Indian economist, author, and critic of the current economic system, along with Pakistani economist Mahbub ul Haq. The UN publishes a yearly report and also predictions using this method. There are also gender related welfare indexes, and the Gini Index (created by an Italian, Gini, in the 1900's) which measures the inequalities within a country, allowing also comparisons between countries.

P. S. Thank you Kit for the link.

2 years ago

Here is a link to a recent Care2 article about GDP and some of its shortcomings:


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