The economic diviners have cast their oracle bones into the flames, as their eager followers grit teeth and grip chairs anxiously awaiting the readings. The flurry of numbers leaves the uninitiated in a tizzy.
First quarter U.S. Gross Domestic Product (GDP) predictions revised to 0.9 percent, down from 1.4 in light of a 7.6 percent trade deficit, are up from January despite a predicted 2 percent drop.
Pause - what does any of this say about the state of our nation, the wellbeing of its citizenry or justice and equality among them?
The prevailing orthodoxy for our modern age has remained rather simple: economic indicators - GDP primarily - are the route to understand the health of a nation and its people. Despite wide criticism of relying on such one-dimensional metrics, the practice has continued and the devotion of the faithful has swollen to dogma following the 2008 crisis.
But as markets shift, headlines soar and politicians swoon or decry the numbers, important questions and data become lost or unmeasured - awash in the veritable sea of economic indices. Policy suffers; success and failure become beholden to economic numbers rather than reality; a wide swath of the population feels disconnected and disenfranchised.
Enter the Social Progress Index, a bold proposal that released its 2014 report last week to measure and rate nations with a holistic and robust methodology, assessing social indicators to understand boons and banes to society directly, as opposed to through economic indicators.
Following the lead of new alternatives, like the Gross National Happiness indicator, this index is amongst a growing pattern of attempts to understand the society behind economies.
Using 54 measures to assess social variables directly, the index gives an intimate look at problems plaguing particular countries, while appreciating successes. Despite having the highest GDP by a wide margin and ninth highest GDP per capita, according to the International Monetary Fund, the United States placed a dismal sixteenth on the Social Progress Index.
GDP, which measures final purchases by summing all recognized consumption and spending, has long been lauded as the preeminent indicator for the health and wealth of a nation. The measure, created by Nobel laureate Simon Kuznets in 1934 to assess Depression recovery and widely spread following the 1944 Bretton Woods Conference, has deficits often forgotten. Kuznets himself stated, "The welfare of a nation can scarcely be inferred from a measurement of national income."
This is not to say GDP is all bad, but it and other economic indicators should certainly be more critically assessed and broadly understood; indices like the Social Progress Index open the door for those questions.
The United States faltered in regards to access to basic knowledge, information and communication, health and wellness and personal safety, dragging its score lower than nations like Canada, Ireland and Austria. The index and the failings it points to are important to consider as it directs attention to specific problems and deficits, as opposed to painting over societal failings with singular economic metrics like GDP.
The index claims to be a data source to work in conjunction with existing metrics. Being so bold as to measure inequality, sustainability and access to education, the Social Progress Index is a radical departure from usual first quarter reports.
This nation's low placement in regards to social development stands in stark opposition to notions that economic growth should take precedent in assessing success. To understand how well a society is doing takes more than narrow indices and narrow thinking.
email: anthony.hilbert@ubspectrum.com
