Absoulte GDP and GDP growth rates are often correlated to overall economic prosperity of nations. However, their relevance in this regard is quite limited
George Orwell states in his famous book Nineteen Eighty Four in Chapter 3 that, “…the choice for mankind lay between freedom and happiness, and that, for the great bulk of mankind, happiness was better. That the party was the eternal guardian of the weak, a dedicated sect doing evil that good might come, sacrificing its own happiness to that of others…” This Orwellian concept is still very practically relevant but has been buried under the deceptive and manipulative economic parameters predominantly used for measuring economic prosperity.
Economics can be really deceptive. The deception goes wider and deeper with the increase in the number of economic variables that goes into a calculation. And one of those economic parameters that hide more than what they reveal is the much touted Gross Domestic Product a.k.a. GDP and GDP per capita. Both these economic parameters are taken into account while measuring the economic prosperity of a nation and its population at large, but sadly fail to reflect the real prosperity of a nation.
The economic prosperity of a nation does not automatically imply social prosperity. There is hardly any correlation between economic development and well-being of a nation. Take Luxembourg for instance. The fact that it tops the charts when it comes to GDP per capita (highest in the world, $108,952 per year) and features among the top countries in the Human Development Index fails to ensure human prosperity. In spite of being a top performer in two of the world’s most reputed economic indices, the country does not feature as a good performer in the c – that measures overall well-being of nation. This is evident from the fact that Luxembourg has one of the highest per capita carbon footprints and intentional homicide rates (1.45); well above nations like Egypt, Kuwait & China. Luxembourg has less than 5,000 guns per 100,000 popula tion but murder rates are much higher than nations with relatively higher rates of gun ownership!
Economics can be really deceptive. The deception goes wider and deeper with the increase in the number of economic variables that goes into a calculation. And one of those economic parameters that hide more than what they reveal is the much touted Gross Domestic Product a.k.a. GDP and GDP per capita. Both these economic parameters are taken into account while measuring the economic prosperity of a nation and its population at large, but sadly fail to reflect the real prosperity of a nation.
The economic prosperity of a nation does not automatically imply social prosperity. There is hardly any correlation between economic development and well-being of a nation. Take Luxembourg for instance. The fact that it tops the charts when it comes to GDP per capita (highest in the world, $108,952 per year) and features among the top countries in the Human Development Index fails to ensure human prosperity. In spite of being a top performer in two of the world’s most reputed economic indices, the country does not feature as a good performer in the c – that measures overall well-being of nation. This is evident from the fact that Luxembourg has one of the highest per capita carbon footprints and intentional homicide rates (1.45); well above nations like Egypt, Kuwait & China. Luxembourg has less than 5,000 guns per 100,000 popula tion but murder rates are much higher than nations with relatively higher rates of gun ownership!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
