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Is the world becoming increasingly prosperous? It would be hard to answer “yes” right now, at least so far as the leading high-income economies are concerned. Yet the longstanding bellwether of economic progress – inflation-adjusted GDP – has been growing across most of the OECD since 2010, suggesting that everything is fine.

Some 80 years after GDP was introduced, nearly everyone (apart from the indicator’s stewards) has concluded that it is no longer a useful measure of economic progress. But there is no consensus yet on a possible replacement. Reaching agreement on an alternative will require a new concept of prosperity and a new way to measure whether living standards are improving…

Over eight decades after its introduction, there is a widespread consensus that GDP is no longer a useful measure of economic progress.  Its successor will need to be compelling and tell a persuasive story, consistent with experience, of what is happening in our economies.  Diane Coyle offers some leads on possible successors: “What Will Succeed GDP?”

* Simon Kuznets

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As we grope for good gauges, we might recall that it was on this date in 1848 that a political pamphlet by the German philosophers Karl Marx and Friedrich Engels, The Communist Manifesto, was published.  Commissioned by the Communist League and written in German, it appeared as the Revolutions of 1848 began to erupt.  Subsequently, of course, Marx elaborated on his argument (with Engel’s help, after Marx’s death) in Das Kapital.

Cover of the first edition

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