How should we measure prosperity in the future?

“Long overdue” or “high time” is how the Handelsblatt readers commented on the initiative by Federal Minister of Economics Robert Habeck to no longer only consider gross domestic product (GDP) when measuring prosperity. When presenting the annual economic report, he recently announced that he would include more than 30 other indicators. One or the other reader doubts whether there really have to be that many.

However, there is still no consensus among Handelsblatt readers as to which indicators would actually be better for measuring prosperity. One favors the Gini coefficient, for another it would be important to also consider the mental health of different population groups, others would focus on the weakest in society, but some also consider more environmental protection and better infrastructure to be relevant. From a large number of e-mails, we have compiled the most interesting articles for you here.

Long overdue

“New indicators for measuring wealth are long overdue. As Robert Kennedy already knew in 1968: ‘The Gross Domestic Product measures everything except that which is worthwhile.’ In addition to a new measurement of prosperity, we also need new success criteria for companies – in addition to the financial result. I am convinced that the very one-sided focus on finances is one of the main reasons for our current unfortunate situation. A proposal for indicators from the ministry is good, but we need broad social and corporate acceptance.”
Richard Schieferdecker

Comprehensive consideration

“Prosperity cannot be measured solely by the economic performance of an economy, any more than a person’s ‘good life’ can be measured solely by their assets.

Of course, economic performance is an essential part of an economy’s prosperity – just as material prosperity is an essential part of a person’s good life. But only a part.

If we, as an economy, only follow the “fairy tail of endless economic growth” and, as individuals, only strive for material things, then we damage other important components of our prosperity or life. Therefore, a comprehensive consideration of our prosperity and thus the introduction of alternative indicators is correct.”
Ralph Kopp

How good it is for the weakest in society

“The USA shows us in a very clear way that GDP (also per capita) alone cannot be a suitable measure of prosperity. In California, home to many of the world’s highest-rated high-tech companies, countless people live on the streets and even highly paid employees of said companies can hardly afford more than a one-bedroom apartment. Tens of millions of Americans have no medical care, making any serious illness an immediate financial threat, or live on food stamps.

In my opinion, a prosperity indicator must at least take into account how well the weakest in society are doing, not just the average. Added to this is infrastructure, social peace, freedom of opinion and other freedoms and environmental protection.”
Roland Stamm

We desperately need alternative indicators of prosperity

“Germany was once a leader in economics. It is high time that something new from this discipline enriched the world again. Even if much of what can be read in connection with a reassessment of prosperity is not all that new. In business, one would speak of KPIs (Key Performance Indicators) for the alternative indicators of prosperity now mentioned.

Yes, we absolutely need them. Which and whether the named ones are the right ones and how these are measured is a matter for discussion. The approach is not only correct, but long overdue. Properly applied, I would hope for significant improvements in the quality of the environment, in health care and in education and in the area of ​​infrastructure and pensions. To name just a few construction sites.”
Alexander Kahler

Confusing

“Robert Habeck is right in that a pure increase in GDP says nothing about how wealth is distributed or under what working conditions it is generated. However, it seems confusing to me to base the measurement of prosperity on thirty indicators. In this way, society’s sense of prosperity is becoming even more alienated from state definitions and calculations.

I would find it more expedient to add the indicator of distributive justice to the GDP. Gender-political and ecological issues should be treated separately.”
Maximilian Knade

The Gini coefficient should also play a role

“I think there should be a shift to a different value system by which the wealth of countries is measured, such as the model propagated by the Value Balancing Alliance for measuring value contributions to the environment, society and the economy. The Gini coefficient should also play a role in measuring prosperity.”
Markus Haider

high time

“It is high time that other factors besides GDP were used to measure wealth. GDP growth ultimately means increased consumption. Whether this was environmentally and socially acceptable remained an open question. One can therefore now argue about which indicators are the right ones. But not about the fact that we need more indicators.”
Verena Kaiser

The mental health

“In my view, the measurement of prosperity also includes measures of the mental health of different population groups such as employees in various industries, children and young people, migrants, older and very old people and people with disabilities, among other things.”
Jurgen Howe

Thumbs up, Mr. Habeck

“The parameters extended by Economics Minister Habeck, which he would like to use as components for measuring our prosperity, hit the core. A serious measurement of prosperity undoubtedly includes ecological effects, development and earning opportunities, general educational opportunities, and the promotion of ideas. Prosperity is ultimately reflected in the breadth of our society, in the quality of life of each individual. Get out of the drawer and see the world through the eyes of tomorrow. Thumbs up, Mr. Habeck.”
Marion Bechtold

Criticism of GDP is as old as GDP itself

“Criticism of GDP is as old as GDP itself. Beginning with the ideas of Simon Kuznets before the Second World War, there have been repeated attempts, most recently in 2009 with the Stieglitz-Sen-Fitoussi Commission, to improve prosperity capture. This is due to the complexity of the phenomenon in a finite world, in which social and individual factors play a role. A better approximation of the concept of prosperity takes this into account, which is why Habeck’s initiative is absolutely welcome, and I hope that it (or a comparable concept) will prevail worldwide.”
Jan Ovelgonne

>> Read also: So far, the economy has primarily been measured by growth. Economics Minister Habeck wants to change that radically and has 31 ideas for it

Prosperity is not measured by the size of the bank account

“Prosperity is not measured by the size of the bank account, but by the fulfilled expectations of people in need of help, which are quite feasible and can then be experienced with a noticeable disposal of cost-intensive and excessive bureaucracy. However, this can only be achieved if communication deficits are eliminated at eye level and an accepted basis of trust is created again, which goes hand in hand with identification, satisfaction, joie de vivre and the maintenance of rituals in education as otherwise in everyday life.
Harald Rash

Abolish unequally distributed money as a prosperity goal

“If we had to buy our air in bags it would be great for GDP, just not for us. Things in abundance cannot be priced, but does that mean that abundance is bad? It is high time to abolish unequally distributed money as a prosperity goal in our society and instead to establish an index that reflects real quality of life. And if you still want to be able to compare, you can use existing standards such as the OECD Better Life Index as a guide.”
Folker Scholz

Overdue addition to the toolbox

“Basically, I personally find Mr. Habeck’s statement reasonable. There are larger and longer-term challenges that also need to be considered. If, at the beginning of the economic miracle, considerations on climate protection (which came from scientists, among others, Klaus Hasselmann, Syukoro Manabe and Giorgio Parisi) had not been ignored, companies would not now have to invest billions in new and sustainable technologies. The sum would probably be the same in the end, but the burden would be more spread out.

In my opinion, broadband expansion, all-day care and other points can be treated as temporary factors. Important in the current toolbox and lifestyle, but may be replaceable in the future. All in all, it can be seen as a long overdue addition to the toolbox – only time will tell if you need all the tools from it.”
Tobias Engelbracht

Don’t reinvent the wheel

“In economics, the magic square is a system of four economic policy goals that are to be fulfilled simultaneously and to the same extent. These are the goals of price stability, high employment, foreign trade balance and steady and appropriate economic growth’ (quote from Wikipedia).

I am in favor of keeping this concept and expanding it accordingly. There have also been suggestions from research and science in the past, including various think tanks. You don’t have to reinvent the wheel now!”
End Erat

There is still no sign of a solution to the Russia-Ukraine conflict. Last week, Handelsblatt readers discussed how Germany and the EU should position themselves.

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