But what is economic growth? Earlier this month, French President Nicolas Sarkozy and a group of economists, including American Nobelist (and Columbia University Professor) Joseph Stiglitz, called for a re-evaluation of gross domestic product--broadly considered the most telling indicator of a nation's advancement. G.D.P. should be more comprehensive, they said, by accounting for things like personal well-being and sustainability of a nation's economy. According to Financial Times, Dr. Stiglitz stated,
"What we measure affects what we do. If we have the wrong measures, we will strive for the wrong things."
Stiglitz's statement reminds me of Bill James, who in the late 1970s began to challenge the entrenched use of certain indicators to assess a baseball player's worth. Among many other things, James is credited with shifting the focus from batting average and RBIs to a more comprehensive measure of a player's overall contribution to runs scored, which accounts for things like walks and total bases. He also ushered in an entire new world of baseball statistical analysis, and revolutionized the front-office position of general manager, as Michael Lewis described in Moneyball (Amazon link).
Global policy-making is obviously much more complicated than baseball. But the point here is that there is value in re-assessing the usefulness of heavily-relied-upon indicators. Why isn't some measure of economic sustainability included in G.D.P.? If it was, the merits of investing in clean energy would probably be much harder to ignore.