«The success of a society is not within the GDP figure»

«The success of a society is not within the GDP figure»

The economic journalist criticizes in 'El delirio del crecimiento' that the economic advance is calculated without taking into account the welfare of the citizens of a country

   The more a country produces, the better. It does not matter if they are plastics, food or industries. That is the definition of GDP (Gross Domestic Product), very roughly, that does not distinguish between beneficial or harmful production. And GDP has become the only way to measure the growth of a country, despite the fact that nothing, or very little, has to do with the real progress of the population that composes it.

  On many occasions, as in the case of Spain, citizens complain that politicians only take into account macroeconomic data and are not aware of the lack of social welfare  in their country. This is due to the measurement of GDP.

  The economic journalist David Pilling has studied this phenomenon in his book 'The delirium of growth' (Taurus) and assures in an interview to this newspaper that GDP is a way of measuring growth "very limited" because "does not take into account anything »About the distribution of this growth among citizens or how a country invests this increase. "GDP does not say anything about how money is spent and how sustainable an economy can be, a country could grow because it is looting and destroying the environment and GDP would rise," he explains.

The concept of GDP was invented in 1932, in the Great Depression of the United States. President Franklin Roosevelt wanted to cite what the country's economy had suffered after the Crash of the 1929 Stock Exchange and asked the economist Simon Kuznets for help. Although now it seems incredible, there was no figure that estimated the growth of the countries, and thanks to the calculation of the GDP they discovered that the American economy had been reduced by half.

The objective was to compress into a single figure all that citizens and companies had produced, consumed and spent in a year under the calculation of added value, that is, according to what each phase of production adds up to transform some raw materials in products. The problem is that after 90 years since the creation of this concept, some economists believe that it should be renewed to include other elements such as the quality of life of citizens.

"I thought that happiness could not be measured, but I was surprised by the consistency of some studies," Pilling argues. And is that in some European countries have been measuring the degree of happiness of its citizens for 30 years, is what he calls the "subjective well-being", which is related to GDP. Contrary to the fact that sometimes it seems that in poor countries citizens are happy "even if they do not have running water", the author explains that studies reveal that this is not the case, which implies a certain correlation between happiness and GDP.

However, Pilling explains that there is no perfect correlation because in the average income "that similarity is lost". "There are countries that are not so rich, declare a level of happiness much higher than others with higher GDP; Costa Rica is the perfect example. On the other hand, others with a remarkable growth of the economy at the macro level, the degree of well-being of the people is not as high, as it is in France, "he clarifies.

Increase retirement age
For this reason, the columnist for 'The Financial Times' gives as an example public parks in the midst of large cities, because if the land were sold to build large buildings the GDP would increase, but a level of social welfare for the neighbors would be lost. You can take a walk for free. "If GDP is used as the arbitrator that defines public policies, we would have incorrect answers."

And in Spain the situation is not very different. After years of economic crisis where millions of jobs were lost and the quality of life of the majority of Spaniards fell precipitously, these last three years it has been repeated that the economy has grown at an important rate, although in families it is not perceived such form. Pilling justifies the fact that GDP does not measure the average income of households or what the economy does for the average citizen. "I think we should look more at the quality of the jobs that have been created after the crisis, rather than the number itself", which is what GDP measures.

Faced with the challenges shared by many great European powers such as the demographic by the aging of the population and low birth rate, the author says that although economists is a "terrible problem", the truth is that reaching all elders should be something let's celebrate. «Demography is changing, that is why in Japan we work until much later; it is not realistic that if we now live 20 more years, we will work as before, "he concludes.