It gets even worse when historians start citing GDP statistics. Can any estimate of China's GDP per capita in 980
be at all credible? I would also argue that for some countries (such as Argentina, in this case
) GDP statistics even for the twentieth century can be highly misleading, yet economic historians continue to treat them as if they represented something real (again, see the Argentine example
The interesting question raised in the FT article is what to replace GDP with. Most of the alternatives discussed actually incorporate GDP – a third of the UN's human development index, for instance, is made up the standard GDP statistics. Personally, I found Kuznets' original idea more interesting:
He was inclined to include only activities he believed contributed to society’s wellbeing. Why count things like spending on armaments, he reasoned, when war clearly detracted from human welfare? He also wanted to subtract advertising (useless), financial and speculative activities (dangerous) and government spending (tautological, since it was just recycled taxes).
I think this is what Herman Daly was getting at from the environmental side.
I imagine the main problem is knowing what prices to use, given that markets aren't very good at valuing what contributes to society's wellbeing.