ABSTRACT
It is increasingly recognized that undue significance has been given to GDP for measuring economic performance and human wellbeing. Daly argues that since GDP makes no distinction between the benefits and costs of economic activity and conflates quantitative growth with qualitative development, it is entirely inadequate as a measure of the scale of an economy or of wellbeing. There are many proposals for amending GDP to include, for example, the value of unpaid housework and deduct the costs of environmental pollution. One of the first comprehensive attempts to create a more meaningful ‘index of sustainable economic welfare’ (ISEW) appears in the appendix to Daly and Cobb’s For the Common Good. The ISEW distinguishes between benefits and costs and so, in contrast to GDP, can indicate when growth has gone too far, or as Daly would say, has become ‘uneconomic’.
Even before working on the ISEW Daly had called for an economic equivalent of the Plimsoll line painted around the hulls of ships to indicate when a ship is overloaded. His emphasis on scale and the need to measure it inspired others to develop metrics suitable for this purpose such as material flow accounting and the ecological footprint.
