Page 165 - Invited Paper Session (IPS) - Volume 2

IPS195 Peter van de Ven
1. Introduction
Kenneth Boulding once noted that “anyone who believes exponential
growth can go on forever in a finite world is either a madman or an
1
economist” . Amongst others, Philipsen (2015) shows the ridiculousness of
continuously pushing for a 3% growth of world GDP, which would result in a
doubling of the world economy every quarter of a century, and leading to a
world economy which by the end of the 21st century would be eight times
larger than the current one. Adding another century would lead to a 128-fold
multiplication of the current level of economic activity. All of this is not to say
that compiling GDP-numbers is pretty much useless. Clearly, monitoring and
analysing economic activities are important in their own right, for example to
support policies for designing a financially sustainable economy. But that
should not lead to policies that continuously and exclusively beat the drum of
an unconditionally higher GDP. For what purpose? For whom? Economic
growth cannot be the ultimate objective of a society. As many have said, we
need a better navigation system that guides policy towards the enhancement
of well-being of people, without jeopardising the sustainability of well-being
for future generations to come. But often voices become much softer, or even
silent, when it comes to concrete alternatives which could provide clearer
guidance for the future direction of societal developments, have a rigorous
and conceptually sound underlying measurement framework, and – last but
not certainly least – are easy to communicate.
Whatever the case, the quite alarming societal developments call for
further action to arrive at better metrics that provide a more encompassing
measure of developments in (sustainable) well-being. It may not be possible
to find what is considered by some as the holy grail, an alternative catch-all
indicator, that provides a perfect monitoring instrument for well-being, which
also takes into account the present-day losses (or gains) in the possibilities to
generate future well-being. The pursuit of such an indicator may show to be a
dead end road. Well-being is a multi-faceted phenomenon that may only be
captured by a dashboard of indicators, such as for example the OECD Better
Life Index; see http://www.oecdbetterlifeindex.org/.
This short paper includes a proposal to broaden the traditional framework
of national accounts into an accounting framework that can support the
analysis of dashboards of indicators for measuring well-being and
sustainability. It thus tries to provide a linking pin between the current set of
national accounts and the dashboards of indicators. After a short description,
in Section 2, of initiatives closely related to the current system of national

1 United States Congress, House (1973) Energy reorganization act of 1973: Hearings, Ninety-
third Congress, first session, on H.R. 11510, page 248.

152 | I S I W S C 2 0 1 9