Long answer:I don’t think GDP should be seen as the only indicator of the health of the economy because 1) it’s a result of previous activity for example in developed countries, much of the wealth is a result of policies 200 years ago and 2) GDP can rise for all sorts of reasons that doesnt benefit people, and it incentivizes government inefficiencies eg., train price increases.
In many capitalist economies where there is less innovation, the people have become the resource to be farmed for taxes, higher energy bills, and pointless consumption that makes them worse off. All of these boost GDP.
When animal populations are thriving and have more resources, they multiply, when they have limited resources, they don’t, and that’s what’s happening when couples are people are working 70 hour work weeks in small apartments in cities.
We need to recognise other measures of the economy for example birth rates could actually be a complementary metric together with GDP to assess the health of the economy because it indicates how much abundance people feel and it is forward looking, it’s a direct indicator of the future productive, and future consumptive capacity of the economy.
Carrying capacity can be defined as a species’ average population size in a particular habitat. The species population size is limited by environmental factors like adequate food, shelter, water, and mates. If these needs are not met, the population will decrease until the resource are optimum. I think this is important for us to think about what our societal carrying capacity is.
It can enable us to think about policies to prioritise and boost carrying capacity many of which might have a negative impact on the GDP for example, ways to incentivize larger housing developments which is less profitable than cramming multiple smaller apartments for examples. Limiting overseas investors from buying up properties in central locations which benefits the economy by raising house prices and makes people feel more wealthy. Incentivize people to keep more of their income, reduce energy bills, lower taxes and making government more efficient.The birth rates is really a good indicator of how much resources people feel they have access to, and it’s a great indicator for the abundance and success felt by people in the economy, in ways that can’t be measured by GDP and this can actually be reduced by government measures designed to boost GDP
We could also consider how well off people actually are in ways that can’t be measured, and the “consumer surplus” is one concept we can consider. Consumer surplus is the price you are willing to pay Vs the actual price. Our economic system encourages profit and this means that monopolies will increasingly charge closer to the maximum they can over time.
