Who says international growth statistics are misleading?
I have written about the risks of growth and about the misuse of statistics. For more on the misuse of statistics, go to https://www.amazon.com/How-Avoid-Being-Misled-Statistics/dp/1499190484
However, I have not written about the misuse of growth-statistics, which David Pilling writes about in his book, The Growth Delusion. The author quotes former President of France, Nicolas Sarkozy, that we are ‘mismeasuring our lives’.
How do people measure growth?
Gross Domestic Product (GDP) is the main index used. Everyone wants to see this number increase. We use it to compare ourselves with other countries, and with ourselves in previous years. What is it? It is the total value of goods and services produced in a country in a year, excluding investment income from abroad.
Why do GDP statistics not give a true picture of growth?
The powers that be have chosen a single measure. This gives the impression of simplicity and appears to make comparisons easy. The trouble is that life is not so simple. GDP will not reveal regional variations, or even the experiences of different groups of people in the same town. There is plenty of evidence that regional and other differences in income have been widening in the UK for some time. Different people’s real incomes are moving in opposite directions, because their prosperity depends on where they live and what industry they are in.
You can read about other criticisms of the way people use GDP in The Growth Delusion.
Do misleading growth statistics create a risk?
David Pilling and Nicolas Sarkozy have recognised a risk, which is that people will think they are being deliberately misled. They will hear how well our economy is performing,when the evidence of their own eyes contradicts that assertion. This could add to the distrust in experts of all kinds, which would be very bad for democracy. I do not want to take that risk.
Let’s find better ways of measuring prosperity.