Sunday, November 21, 2010

A thought about how to measure social progress

Gross Domestic Product (GDP) is an index of the total production of goods and services by an economy. Per capita GDP is then an index of the average productivity per person. These are clearly useful, but they are probably overused as indices of progress. Even as an economic indicator, GDP has problems. It fails to account for externalities such as pollution caused by production. Expenditures to repair damages are counted in the same way that are expenditures to prevent those damages; thus health services for the unsuccessful treatment of disease are counted at their cost as are health services that successfully prevent diseases. GDP per capita does not reflect the distribution of income and wealth in a population and thus may disguise poverty in a society with very unequal distribution of income.

The UNDP's Human Development Index adds components of life expectancy and schooling to economic production. That is an advance on a simple indicator of economic production. It begins to move towards a multidimensional indicator that can be used to measure progress of a nation or society.

Mens sana in corpore sano (a healthy mind in a healthy body). This would seem to be an important aim for a society -- healthy citizens whose minds are fully developed. I would suggest that disability-adjusted life years (DALYs) is a better measure of health, but it too falls short of the idea of complete physical and mental wellbeing advanced by the World Health Organization. Similarly, schooling is a useful indicator, but falls short of measuring intellectual development. For example, years in a second rate school are counted equally with years in a good school; the benefits of continuing education, non-formal education and self-education are ignored. One might prefer measures of learning and wisdom, could they be established and standardized.

The Millennium Development Goals represent a serious attempt to develop indicators to measure the reduction of poverty. Again, the approach is to use a set of indicators, but in this case directed to measuring a single factor of development -- the elimination of the worst aspects of poverty.

Some suggest that happiness is a suitable measure for the success of a society, using measures such as Gross Domestic Happiness. I think that these folk are on to something. One can be affluent, healthy and educated yet not happy. On the other hand it seems very difficult to me to find an indicator that allows comparison of happiness of one person versus another, of one group versus another. Moreover, I like Orhan Pamuk's suggestion that Istanbul citizens live in an emotional state which is short of happiness and which is comparable to a malaise felt in other cities but specific to Istanbul. Thus happiness may depend on the weather, the climate, the insolation, the genetics of the population, or other factors which are not subject to policy manipulation. Still, happiness seems to me a useful element to include in a multidimensional measurement of progress.

I just saw a televised awarding of the Congressional Medal of Honor. Kwame Anthony Appiah has recently published a book titled The Honor Code: How Moral Revolutions Happen. It seems to me that honor might be the basis of another indicator of importance for a society. How many people are worthy of honor? How may people in a society would qualify for its highest honors? This would be a measure of moral worth and/or personal achievement and contribution to society. I note that world class universities proudly proclaim the number of their faculty members who have been awarded the Nobel or other international prizes. Ultimately I think an indicator of honor might focus on the ethical basis and moral behavior of people in a society.

So perhaps we need a multidimensional concept of progress. It would measure the degree to which people were healthy and intellectually developed, the degree to which they had the resources to assure comfort and choice, the degree to which those benefits were universally shared within the society, happiness, and honor.

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