Dr. Madhavi Venkatesan's paper Aligning Economic Measurement with Well-Being: Sustainability has been published in The Palgrave Handbook of Global Social Change.
Gross domestic product (GDP) has been the prevailing global metric for measuring economic growth for the past 70 years. This is the same time period that is credited with the observation of manmade climate change. The observed relationship is arguably related to the goal of GDP growth without the constraint of “how” it is attained. Further, the GDP-based growth model, predicated on theoretical assumptions of human behavior, has enabled cultural transition to foster individualism, facilitate competition, and enable material accumulation, essentially endogenizing neoclassical behavioral assumptions while limiting perception of value to market outcomes: prices. To the extent that market prices and participants do not include holistic impacts of resource use and instead determine value based on immediate gratification, GDP growth is correlated with negative externalities, which impose limits on the future quality of life. From this perspective, it is evident that the use of economic metrics alone, without articulation or determination of social responsibility, can affect environmental sustainability and result in outcomes that are inconsistent with the intention of growth, specifically well-being. In this chapter, we explore how GDP gained traction on a global scale and how the indicator is tied to climate change, as well as environmental degradation and intra- and inter-species exploitation. We then consider the process needed to adjust economic assessment to align with well-being and promote sustainability.