Letter: A real measure of prosperity

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The Independent Online
Sir: You argue (Business comment, 30 August) that the search for a better measure of national prosperity than GDP is futile.

You do not have to be much of an economist to know that GDP cannot tell the difference between good product and bad product, nor between warm and cold weather. If for example we gave up road accidents and their consequent costs, GDP would be lower and we would apparently be less prosperous. Similarly, if in a warm winter we spend less on fuel and woollies, the fall in GDP would indicate that we are the "poorer" for it.

You gave quite a lot of space to the Human Development Index in the 1996 Human Development Report published by the United Nations Development Programme. This index incorporates life expectancy and education as well as GDP per head, and might well be thought a better indication of real prosperity. Then you can have an income-disparity index, and a gender-disparity index. You can measure increase or decrease of natural capital resources. And so on.

None of these measures is perfect or definitive, but attempts to refine them do not deserve your thuggish dismissal as "ridiculous" or "daft".


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