As governments craft policies to “build back better” following an economic crisis, they need indicators that reflect a meaningful conception of “better.” This doesn’t mean governments need to abandon the standard GDP. Rather they should transform it into a series of indicators — much like existing US statistics for unemployment are reported as “U1” through “U6,” with each number reflecting different aspects of unemployment. Other statistics, including consumer price indices and the money supply, are similarly reported as a series instead of a single number. While GDP, or G1, would be standard national income, G2 could give a fuller picture of income, revealing how equitably it is distributed, while reflecting the contributions of unpaid labor, like care for children and elders. G3 might look to the future, ensuring that today’s output does not hamper tomorrow’s by exacerbating environmental challenges or depleting resources. G4 could seek to account for our overall day-to-day wellbeing, including, for example, measures of health and social connection.
The news of the record-shattering 33.1% percent annualized GDP growth in the U.S. in the third quarter of 2020 seemed, to most people, like a farce. It’s not that the data — reflecting the rebound from an abysmal spring and summer — was technically wrong. It’s that it bore no resemblance whatsoever to most people’s lived experience.
