GDP a terrible measure of well being, says Rowan Williams

Written by Kaya Burgess via The Times on 1/26/18

World leaders spend too much time obsessing over GDP figures in the mistaken belief that economic growth always benefits the poorest in society, a former Archbishop of Canterbury has said in a message timed to coincide with the Davos summit.

As part of a charity report on economic growth, Lord Williams of Oystermouth said that measures such as GDP tell us “little or nothing” about the well-being of citizens and that the pursuit of economic growth as an end itself can lead to “massive inequality”.

“Most of our language about economic ‘growth’ is just such an imprisoning picture,” he wrote in the foreword to the Christian Aid report An Unquenchable Thirst for More: Faith and Economic Growth. “We have taught ourselves to assume that the expansion of our economy in certain ways is both natural and beneficial for everyone.

“And so we have stopped looking at the actual effects of the system we inhabit, repeating the mantra that the kind of growth we have been used to is the best or only engine for lifting populations out of poverty, or that the massive inequality of the global system is just a minor malfunction in a generally benign story.”

The IMF upgraded its forecast for growth in the world economy by 0.2 percentage points this week. Christine Lagarde, head of the IMF, described this as encouraging but warned: “There are still too many people who are left out of that recovery.”


Lord Williams, who was Archbishop of Canterbury from 2002 to 2012, wrote: “Most importantly of all, we have stopped asking what wealth is for. Lacking a coherent picture of what a good human life looks like, we have filled the gap with quantified measures that tell us little or nothing about how far flesh-and-blood human beings are flourishing in all aspects of their experience.”

He said that Christians were particularly guilty of failing to understand how best to improve people’s well being, adding: “Wealth is instrumental in this, never an end in itself.”

The report criticised those who pursue “growth for growth’s sake”. It said GDP was a “good indicator of whether economic activity is rising or falling”, but added: “GDP tells us nothing about who gains from that activity, whether it translates into higher living standards or human flourishing in the wider sense.”

A poll by Gallup last year of 150,000 people in 142 countries ranked Paraguay as the country whose citizens are happiest, while the UK was in joint 38th place, despite GDP per capita ten times higher than Paraguay.

The report found that the way in which GDP is measured encourages poorer nations to “adopt a development path that makes very small adjustments to the well-being of the very poor, but increases the prosperity of the already wealthy and makes huge demands on the environment”. In richer economies it “encourages populations into debt and excessive consumerism”.

Sue Richardson, a Christian Aid adviser who co-authored the report, said: “This report casts a critical light on the decades-long experiment in using measurement of GDP and other economic indicators as a proxy for human well being. We conclude that this experiment has failed.”

Matthew Wisner