William Paul Bell Queensland University Researcher

Why is mainstream economics not a social science but ideological mathematics?

Posts Tagged ‘Cultural map

GDP as a proxy for well being misses the mark

leave a comment »

The report prepared for the President of France, Nicolas Sarkozy, by two Nobel prize-winning economists, Joseph Stiglitz and Amartya Sen, has proposed ways of improving our measurement of economic performance and social progress (Gittens 2009).  GDP measures the production of an economy.  There are at least three problems with GDP as a proxy for well-being.  First, this proxy may hold for countries outside the OECD membership, where the basics such as shelter, food, access to medical services, and clean water and sanitations are lacking.  Second, what is measured becomes a policy target, in this case a misguided target in OECD countries.  Third, GDP becoming a target circumvents the important discussion of what are suitable measures for well-being.  Equating the level of GDP to the level of well-being reduces the study of economics to an optimisation problem, allowing neoclassical economics the pretence of being scientific.  My post ‘The G8 protests and the logically inconsistent foundations of neoclassical economics’ further discusses this scientific pretence.

Read the rest of this entry »