The accompanying paper on Economic Heresy, offers food for thought. Economic Growth means increasing the amount of money changing hands. GNP or GDP simply measure the volume of financial transactions. One might think that money spent dealing with social failures like increasing crime or polluted water subtract from our well-being. It makes no difference to conventional economic measurement whether expenditures are made for good or ill.
Any money spent is added and is said to indicate increased well-being.
When a hurricane devastates a community, the local economy booms as people spend insurance money and their savings trying to restore their shattered lives. Sex, Lies and the Global Economy . The GPI aims to sort out the mistaken messages that come from confusing money spent on positive contributions to our well-being with money spent trying to deal with problems we have created and should be working to avoid. In addition to subtracting undesirable costs, the GPI adds values for activities that help society but which GDP ignores because no money is spent on them. This includes families caring for their elders, voluntary community work, meals prepared at home, household fix it, and food grown for family consumption.