Our CEO, Michael Green, recently spoke to a group in London about Simon Kuznets, who was born 117 years ago today and won the Nobel Prize. He laid the groundwork for GDP measures and significantly advanced our knowledge of economic progress. He also foreshadowed the idea that social advancement was a prerequisite for economic advancement.
Policymakers now have regular, trustworthy estimates of the output of the US economy because to Simon Kuznets’ invention. Equipped with this knowledge, the US government eventually managed to escape the Great Depression. For more than 50 years, GDP was the primary indicator of progress as this concept extended throughout the world.
And it’s had a significant impact: Depending on whether a country’s GDP is increasing or decreasing, trillions of dollars are transferred around the world. Politicians also run on whether the GDP is increasing or decreasing. …
Kuznets, however, was aware that societal well-being could not be sufficiently gauged by national income alone. The environmental limitations that our planet is facing are not taken into account by GDP. It has nothing to do with justice or fairness. Additionally, GDP views prisons and bombs as advancements. This measure is seriously defective. The emergence of populism, the Arab Spring, and the economic crisis show that even while economic numbers are rising, other things may be going on in a society.
The Social Progress Index offers an alternative perspective on global development and progress, one that is more inclusive and sustainable. Social and environmental indicators serve as its sole foundation. By separating these measurements, we may have a direct and independent understanding of them. The real connection between social and economic advancement will then become clear to us. was crucial, as Kuznets suggested in his 1934 initial report on national income.