France to count happiness in GDP

[mawilson 2,133]

Happiness, long holidays and a sense of well-being may not be everyone’s yardstick for

economic performance, but Nicolas Sarkozy believes they should be embraced by the world

in a national accounting overhaul.

France’s president on Monday urged other countries to adopt proposed new measures of

economic output unveiled by a panel of international economists led by Joseph Stiglitz,

the US Nobel Prize winner.

Mr Sarkozy, who set up the Stiglitz-led commission last year, said the world had become

trapped in a “cult of figures”.

Insee, the French statistics agency, would set about incorporating the new indicators in

its accounting, Mr Sarkozy said.

One consequence of the commission’s proposed enhancements to gross domestic product

data would be to improve instantly France’s economic performance by taking into account

its high-quality health service, expensive welfare system and long holidays. At the same

time, the commission’s changes would downgrade US economic output.

The commission suggested a series of improvements to the way GDP was measured. It

proposed accounting for people’s well-being and the sustainability of a country’s economy

and natural resources. “The world over, citizens think we are lying to them, that the figures

are wrong, that they are manipulated,” said the president. “And they have reasons to think

like that.

“Behind the cult of figures, behind all these statistical and accounting structures, there is

also the cult of the market that is always right,” he said.

Mr Sarkozy’s overriding objective, at least before the crisis, was to raise France’s trend

rate of growth by a percentage point. Henri Guaino, Mr Sarkozy’s speechwriter and

inspiration for the commission, quipped: “We just found half of that.”

Mr Stiglitz and Jean-Paul Fitoussi, co-author, said a more comprehensive method for

measuring performance would cut the per capita GDP gap between the US and France by

at least half. US per capita GDP is 14 per cent higher than France’s. Although the commission

did not work out the effects of its proposals on different countries, Mr Stiglitz said the

changes would bring “a number of major adjustments”.

The US spends 15 per cent of its GDP on health and France 11 per cent. But if GDP accounted

for outcomes and not just financial inputs, that alone would cut the per capita GDP by a third.

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[AlHayatZween 2]

Happiness, long holidays and a sense of well-being may not be everyone’s yardstick for economic performance,

Sounds good to me... if only my French weren't so ghetto.