ABSTRACT
A long decade ago economic growth was the reigning fashion of political economy. Growth measures nearly always involve diversions of current resources from other uses, sacrifices of current consumption for the benefit of succeeding generations of consumers. In this chapter, the authors' measure understates economic welfare and its growth to the extent that education and medical care are direct rather than indirect sources of consumer satisfaction. They have constructed a primitive and experimental measure of economic welfare, in which they attempt to allow for the more obvious discrepancies between Gross national product (GNP) and economic welfare. The authors' adjustments to GNP fall into three general categories: reclassification of GNP expenditures as consumption, investment, and intermediate; imputation for the services of consumer capital, for leisure, and for the product of household work; correction for some of the disamenities of urbanization. The omission of leisure and of nonmarket productive activity from measures of production conveys the impression that economists are blindly materialistic.
