Friday, September 18, 2009

France searches for value replacement for GDP

Sarkozy and Bruni: sharing a a value moment...

The French Government has released a report on how to improve GDP to include wider social benefit, which I argue is a need to measure value. The report can be found here (pdf 3.2Mb), and the project home here. The Project Group is called “The Commission on the Measurement of Economic Performance and Social Progress”.

See the Economist article here. My comment on the Economist article - a value summary is below.

The Economist says "GDP was designed to measure only the value of goods and services produced in a country, and it does not even do that precisely". The problem with GDP is that value measured is only monetary, and does not include subjective value measures. Measuring innovation faces similar challenges, because an Innovation adds value - monetary and non-monetary. And value includes as your commenter's note: time, service, and your article mentions, protecting the environment, happiness. I am currently writing my PhD on Value and Innovation, from a subjective perspective, and note that defining value as a problem goes back to Aristotle. Aristotle states the problem as how does a builder and shoe maker come to an agreement on a fair exchange, given they are so different. Yet we do. We act on value all the time. Every time we choose something to buy, or give our support to, we are making value decisions. Value is complex, multi-dimensional, personal, contextual, dynamic, social and personal. No wonder a simple measure is not yet at hand (especially if Aristotle couldn't come up with one). Price and GDP are an estimate of value, but I look forward to a time when we solve our value measurement problem. I hope to write a book on the history of value, and examine how our ideas about value changed through the ages, and why are we interested in value now. See my blog on value at for my findings to date, including my twelve dimensions of value, and value model of consumer behaviour.

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