Imagine a bank statement that lists your earthly wealth not only in pounds sterling but also through increased longevity, how long you work and your access to technology from antibiotics to air travel.
This was the concept of economic well-being put forward by a leading economist yesterday in an effort to prove that Britons are really at least twice as wealthy as they think they are.
Nick Crafts, professor of economic history at the London School of Economics, told an audience that scientific and technological advances such as increased life expectancy had been wrongly excluded from calculations of the nation's wealth. If they had been included, the growth in the country's gross domestic product over the past 25 years – an average annual increase of 1.8 per cent – would have been at least doubled, he said.
The findings were in stark contrast to recent surveys showing that many Britons, in particular twentysomethings, are convinced their quality of life is falling and they are plunging into lethargy and depression as a result.
But Professor Crafts, delivering the annual Royal Economic Society lecture in London, said more ethereal notions such as health and free time deserved a monetary value, as did the technology that made them possible.
He said: "We now expect to live on average 30 years longer, to work almost half the amount of time we used to, and to enjoy an array of new goods and services, including air travel, antibiotics and televisions.
"The most important scientific achievement of the 20th century – the massive reduction in mortality risks – is not taken into account [in GDP], although there is clear evidence that it is worth as much to people as a huge increase in material consumption."
The professor said the longer life expectancy of the population and better quality of life should therefore be calculated as a concrete economic gain to produce a "true" picture of the national income. For example, a "statistical life" – the value gained from reducing expected deaths by one in a single year – has been worked out as £1.75m a year.
Professor Crafts said that GDP figures showing a slowdown in the annual rate of growth from 2.5 per cent between 1950 and 1973 to 1.8 per cent until 1998 could be considered "statistical artefacts". But he admitted that his proposal did nothing to explain research that showed that despite their increased wealth, most Britons were no happier than their grandparents or great-grandparents.
Professor Crafts said Britons were seemingly never satisfied with their lot in life. "The resolution of this paradox seems to be that our material aspirations rise as fast as our incomes."
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