ABSTRACT
A country's economic performance is conventionally summarised by its Gross National Product (GNP). Growth in GNP is a major objective of national policy. It is not so long ago that a prominent economist wrote, ‘Growth is the grand objective, the aim of economic policy as a whole’ (Harrod, 1964). Since then, however, this measure has come under vehement attack. For example, it has been rechristened by some environmentalists ‘Gross National Pollution’. More fully reasoned critiques have been given by Mishan (1967) and Boulding (1970). The purport of these criticisms is that, at best, GNP measures the output of goods and services which are produced for sale, and neglects important goods and services which never reach the market. Moreover, many of these latter, for example pollution, waste heat, noise, congestion, want creation and, more debatedly, various social ills, are unwanted by-products or social costs of market production. The market production is faithfully recorded in GNP while the byproducts are systematically ignored. As the world becomes increasingly crowded by man and his economic activities, these by-products become increasingly serious and according to some (e.g. Meadows et al., 1972, MIT, 1970, Heilbronner, 1974) threaten the very survival of mankind. Accordingly, it is argued, GNP is not just a poor but a dangerously misleading guide to economic policy; certainly it is not a measure of a nation's ‘welfare’.
