Gross domestic product (GDP) is a complex measure of total economic output – the sum of all the goods and services a nation produces. Most nations and people understand and embrace the “logic of GDP” – that more of everything is better – while failing to understand its complex calculations. But GDP has serious shortcomings, says Duke University economic history professor Dirk Philipsen. Among other concerns, GDP measures only the exchange of money and fails to subtract the shared societal costs of growth, such as pollution, from the value of economic output. Putting a value on priceless resources like breathable air is one of the challenges of developing a performance indicator superior to GDP. Philipsen provides a compelling history of GDP as he dissects its flaws and misuse. getAbstract recommends his GDP exploration to readers – even those without an economics background – who want to learn what GDP counts and ignores, and why unquestioning pursuit of growth as measured by GDP could prove dangerous.
In this summary, you will learn
- How gross domestic product (GDP) shapes public policy,
- Why GDP is a flawed measure of progress and
- What metrics could replace GDP.
About the Author
Duke University economic history professor Dirk Philipsen is a senior fellow at the Kenan Institute for Ethics and an Arts and Sciences Senior Research Scholar. He also wrote We Were The People, about the fall of communism in East Germany.
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1 year agoThought provoking. As it is obvious, smaller or countries that have no push power constantly falls under the pressure of big nations or super organisations (i.e. IMF, WB, ADB etc). They don't have the right to choose! Because of they do the extension of support gets either cut off or subdued. As much as a "real need" adjusted measurement is required to ensure sustainability, the agenda of the world super power will never let the same surface to ensure the gap between poor and rich remains...
3 years agoGood summary, Capitalism could be revised through other lenses rather than GDP, however stagnancy will be present until no further and broaden changes take place generating innovative approaches to analyze economy