‘There are three kinds of lies: lies, damned lies and statistics’ said Mark Twain. This statement is profoundly true in today’s context where the leaders and ‘economist leaders’ of the country are highly obsessed with increasing the Gross Domestic Product (GDP). While such an obsession may still be warranted, but the equating of GDP increase to the welfare of the nation is not only unwarranted but smacks of ignorance.
GDP is an aggregate indicator that may help us in the rat race of this globalized world where having the highest GDP has become a sacred goal. This is definitely a race to the bottom. Many of us see our political leaders who cherish talking about 9% growth in 2006-07, a near 8% growth last year and a growth of around 7% in 2011-12. This is not just it. Different organisations are burning the midnight oil just to be sure that they give the exact ‘number’ for this growth.
To secure the citizens of this nation JUSTICE – Social, Economic and Political says our Preamble to the Constitution. It is exactly this economic justice that the obsession with GDP is not going to provide. I made it clear in the beginning of this article that my aim is not to the critique GDP as such. I am just not comfortable with the interpretation of this single number as signifying the welfare of the people of this nation. I am not comfortable with the fact that this single number is the bedrock on which we want to build our policies. It is my guess that the obsession of GDP is based on the tacit approval of the ‘trickle down theory’, a theory which has long ago been disproved.
This obsession with GDP has grown so much that recently, the president of France Mr. Nicholas Sarkozy appointed a commission to look into it. MIS-measuring our lives – why GDP does not add up is a book which is the first report of this commission. This book is authored by the ‘real’ economists, Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi. This book is a good read for understanding the ill effects of using GDP as an indicator of social progress. The book also provides ways of measuring the welfare. It is high time that the leaders of our nation take a cue from a developed country like France which does not hesitate in finding new ways instead of being complacent with the ‘GDP Progress’.