Some economists use the measure of the total value of goods and services that a country produces annually called the gross domestic product or GDP as the measure of a nation s economic health Others contend that the GDP is an inadequate measure because it

Gross Domestic Product, or GDP, is generally the most used indicator to measure a nation’s standing in the world. The GDP takes into account consumption, investment, government spending, exports and imports, helping evaluate the economic health of a nation. Unfortunately, the GDP is an inadequate measure, as it fails to take into account a lot of important factors that affect a nation’s well being and quality of life. Thus, there should be other indicators used to accurately assess the wellbeing of a nation.

First and foremost, the GDP does not take into account happiness and quality of life. There are many instances where a GDP of a nation can be high, but the quality of life might be low, and vice versa. Case in point, the United States has the highest GDP in the world, with China coming in at second. However, surveys on consumer happiness index show that neither country ranks among the 10 happiest countries in the world. This could be because of the various race problems and healthcare problems citizens face in the United States, or the censorship and oppression citizens are under in China. On the other hand, Bhutan — a tiny nation in SouthEast Asia — has a relatively low GDP but has citizens who are happy due to free healthcare and a politically stable governing body. Additionally, the GDP does not take into account the environmental impacts of nations. The United States and China are responsible for most of the world’s pollution and carbon emission, but the GDP does not take into account the environmental harm imposed by capitalistic drive for economic success. Thus, GDP definitely doesn’t take into account people’s happiness or quality of life, and also does not take into account environmental harm caused by nations. As such, a better indicator needs to be used to judge a nation.

Furthermore, the GDP does not take into account the inequality of income distribution. In most cases, GDPs are an indicator of the economic wellbeing of a nation’s government, companies and top 10% of the population. In the United States, the top 1% accounts for more than 20% of the income of the United States, while the bottom 50% have not seen a rise in income that matches the rise in inflation over the past five decades. As such, while the GDP can objectively say that upper class Americans have enjoyed financial success, it does not indicate how the rest of the nation is doing. Potentially, a GDP per capita indicator can be used as a better indicator to see how well a nation’s population is doing. Regardless, the GDP needs to be modified to account for such inequalities.

Last but not least, as many gender-focused economists would argue, the GDP does not take into account women’s work. In many countries, especially in developing nations, women need to take on jobs inside the home in order for the family unit to function. Jobs traditionally done by women, such as taking care of the young, taking care of the old, cooking, cleaning, etc. have value but are not taken into account in the GDP. Not only are women’s work essential for the family unit to function, one could argue that without women, a household’s main breadwinner would not be able to have a full time job due to obligations at home, and might even need to hire help (which contributes to the GDP) to maintain the household. As such, women’s work is infinitely valuable but are not taken into account in the GDP since they are “unemployed.” Thus, GDPs need to account for this invisible work, or a different indicator would be a better measure of the true economic health of a nation.

Opponents might argue that the GDP is currently the best available indicator for a nation’s health. However, we’ve always been an innovative species — just because something is adequate doesn’t mean that it’s good enough and we should develop a more comprehensive indicator to value a country’s economic health and quality of life. Opponents will also argue that money is the most important thing while judging a country. As previously stated, the GDP can only financially indicate how the upper class population is doing, and doesn’t take into account the suffering of the bottom 10% of the population or people who live beneath the poverty line. As such, there are clearly shortcomings in the GDP and it should be modified in order to give us a better picture of a nation’s health.

In conclusion, while the GDP is a good measure of the monetary flows between nations, it is an inadequate measure to account for a nation’s economic health, environmental health, income distribution, invisible women’s work and quality of life. As such, a different measure should be used to take into account many important factors so that we can have a more accurate measure of a country’s well being.