Intelligence Squared Business Weekly: What is Economic Growth?
Sep 20, 2021
In this discussion, Lord Gus O'Donnell, former Cabinet Secretary and Head of the British Civil Service, delves into the nuances of economic growth. He explores how GDP measures health but may overlook societal well-being. O'Donnell examines Japan's post-WWII transformation and the importance of happiness alongside economic metrics. He critiques traditional GDP measurements, arguing for a broader evaluation that includes productivity and social equity. The conversation also touches on the COVID-19 pandemic's impact and the need for sustainable growth strategies.
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Economic Growth vs. Well-being
- Economic growth, traditionally measured by GDP, reflects economic activity, not necessarily well-being.
- Increased activity, like rebuilding after earthquakes, can boost GDP but doesn't equate to a better life.
GDP's Flawed Inclusions
- GDP includes illegal activities like drug sales and prostitution but excludes volunteering.
- A shift from volunteering to these activities would increase GDP but likely worsen society.
Japan's Post-War Economic Miracle
- Post-WWII, Japan's economy grew rapidly, driven by government reforms, infrastructure investments, and increased female workforce participation.
- The Korean War further boosted Japan's economy due to increased US demand for supplies.