Gross domestic product (GDP) is the market value of all goods and services produced within a country during a certain period of time. It may not take an economist to imagine all the things this limited definition leaves out, including environmental resources, education, and human welfare. But it may take one to design an alternative way to gauge a country’s economic progress.
Enter Partha Dasgupta, an economist at the University of Cambridge, whose “inclusive wealth” concept takes into account those missing elements, particularly measuring the state of the environment in a given country. Including this sort of “natural capital” can result in different results. Rapid GDP growth, for instance, often reveals a lack of sustainability.
Since he taught 20 years ago at Stanford University, where he took long walks with Paul Ehrlich, author of 1968’s The Population Bomb, Dasgupta has moved between the worlds of ecology and economics. He’s currently in talks with the United Nations Development Programme, which is interested in including some sort of “natural capital” measure in its next human development report.
Extras:
Conservation magazine discusses Dasgupta’s work in “The Nature of the Fiscal World,” a series of articles exploring economics and the environment (scroll down to “Kicking the GDP Habit” to read about Dasgupta’s inclusive wealth measure). His books and papers tend to be very academic–not exactly written for a lay audience–but he did recently sit down to discuss poverty, ethics, and economics with the director of the Trinity Institute (he’ll be speaking at their conference, “Building an Ethical Economy,” next year). Dasgupta’s collected works (volumes one and two) will be published next year by Oxford University Press.
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