A New Way to Measure Prosperity


Image courtesy of socialprogressimperative.org

I recently watched a TED Talk given by British economist Michael Green.  In this witty and inspiring talk, Mr. Green spoke about a new index for assessing the development and overall quality of a nation, which he calls the Social Progress Index.  Traditionally, development researchers use a country’s Gross Domestic Product (GDP) as an index for assessment.  GDP generally refers to the size of a nation’s economy – it is the total dollar value of all goods and services produced by a nation over a given period of time.  On a similar note, GDP per capita is a country’s total GDP divided by its population.  This gives researchers an idea of, generally, an average person’s net worth.  Nations are ranked by their GDP and GDP per capita and it has been used since 1934 to assess the progress of nations around the world.

 

Michael Green, however, believes that over-reliance on GDP as a measure of progress and development gives us an inaccurate picture of what the world looks like.  Citing the very report given by economist Simon Kuznets that introduced GDP in the first place, Michael Green reminds us that GDP should only be used to assess economic performance, not social well-being or total international development.  Simple GDP ignores the overall environment of the nation in which GDP can change, and Michael Green believes that this gives us a faulty picture.  Simply because a nation’s economy is doing well does not mean that is a free and safe place to live.

Image courtesy of ted.com

Image courtesy of ted.com

 

Look at Saudi Arabia, for example.  According to the United Nations, it ranks nineteenth in the world for its GDP, higher than Switzerland, Norway, and Ireland, for example.  Yet, unlike in Switzerland, Norway, and Ireland, Saudi Arabia is not a free country.  It is ruled by a family dynasty and half of its population, its women, are severely oppressed.  We would not know this simply by looking at its GDP, though.

 

This is why Green and his colleagues have introduced a new way of assessing the overall development and progress of a nation, which they call the Social Progress Index.  SPI focuses on three dimensions:

 

Basic Human Needs:

Nutrition and basic medical care, water and sanitation, shelter, personal safety.

Foundations of Wellbeing:

Access to basic knowledge, access to information and communication, health and wellness, ecosystem sustainability.

Opportunity:

Personal rights, personal freedom and choice, tolerance and inclusion, access to advanced education.

Image courtesy of socialprogressimperative.org

Image courtesy of socialprogressimperative.org

The Social Progress Imperative, which is what Mr. Green and his colleagues have formed to promote the SPI, asserts that is measures real achievements of a country and gives a more accurate picture of what is like to live in that country.  According to Mr. Green, for example, “We don’t measure whether governments pass laws against discrimination, we measure whether people experience discrimination.”  SPI focuses on real events and experiences: how a country is managing the wealth they produce.  Mr. Green points out that what matters is not how big an economy is, but how a nation invests what it makes.  Investing in doctors and schools and anti-poverty measures is true social progress.

 

Image courtesy of the Skoll Foundation

Image courtesy of the Skoll Foundation

SPI paints a different picture of the world than we are used to.  New Zealand ranks first on the SPI, rather than the United States, which ranks first on the GDP index produced by the United Nations.  The United States may be wealthy, but we still face staggering economic inequality and we aren’t as apt to invest back into society as perhaps New Zealand is.  Perhaps this new knowledge could lead to real change as we slowly learn that perhaps things are not always what they seem and what we believe them to be.

 

SPI as a more accurate way to assess what the world really looks like has a long way to go before it is used as a standard index of measurement, but it certainly holds promise and is sure to take hold.

 

Sources:

http://www.socialprogressimperative.org/data/spi

 

https://www.ted.com/talks/michael_green_what_the_social_progress_index_can_reveal_about_your_country/transcript?language=en

 

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Kate Labonte

Katie joined SGG in 2013 and is the Executive Editor for Smart Mail, Women's News writer for the Smart Girls Guide, a blogger in Smart Girls Media Sisters, and mentor in the Smart Girls Mentorship program. She is a junior at Fordham University, where she is studying Political Science, Middle Eastern Studies, and Theology. She is currently spending a year at the London School of Economics, studying government and international history. Her smarts are in current affairs, international relations, history, women’s issues, and organizing. When she’s not working on Smart Mail over a cappuccino in London, she loves to read, travel, visit museums, cook, and practice yoga.

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