Defining prosperity: vive la France!

One of the most sensible articles on economics I've read in some time appeared under Jim Stanford's byline in the September 11 Globe and Mail. He reminds us once again of the weakness of the GDP as a measure of prosperity, indeed even of productivity.

Specifically, he points out that U.S. productivity appears to be quite superior to that of France, with a GDP ratio of $ 37,500 to $27,700 per capita. However, the French work a lot less than the Americans, about 270 hours a year in fact, and fewer are employed, so comparing GDP on a per capita basis is meaningless. Comparing it on the more meaningful per hour basis, it turns out the French, like most Europeans, are more productive than the Americans. So the French have high incomes as well as much more time than their U.S. counterparts to wine, dine, politic and make love. The Americans produce more stuff, but the French have more time to enjoy life in all it has to offer. So who is the most prosperous?

The problem, Stanford suggests, is that GDP considers time worthless. Only stuff counts. But after a person has enough stuff to eat well, sleep in a warm bed and enjoy a few luxuries, time is of greater value. And speaking of time, it is past time to replace GDP with a more meaningful yardstick of economic progress.