French President Nicolas Sarkozy urged countries to join in a “revolution” to use new ways to measure economic prosperity with more emphasis on the environment, as he kept up his calls for reform ahead of next week’s summit of Group of 20 leaders.
Speaking at the launch of a report coordinated by Nobel prize-winning economist Joseph Stiglitz on new ways of charting economic performance, Sarkozy said he would ask France’s statistics office INSEE to take on board the recommendations.
“France will put this report on the agenda of all international meetings,” he said, adding: “It will fight for all international organisations to modify their statistical systems based on the recommendations of the commission.”
Sarkozy has been one of the loudest voices calling for an overhaul of the global economic system, with tighter controls on financial markets and a clampdown on the big bonuses blamed for excessive risk taking.
Dominique Strauss-Kahn, head of the International Monetary Fund, said bonuses would be a key issue on the summit agenda on 24-25 September and there was growing pressure to act.
“It’s the most visible point because public opinion is shocked by this issue of bonuses and rightly so,” he told France Info radio.
He said he expected leaders to opt to keep stimulus in place despite signs of economic recovery.
Social well-being better than GDP for measuring economic health
Monday’s presentation of the Stiglitz report, which recommends a shift in focus from measuring economic production towards gauging social well-being, gave Sarkozy an opportunity to renew his criticisms of unbridled market capitalism.
“Behind the cult of figures, behind all this statistical and accounting representation, there is also the cult of the market that is always right,” he said.
He did not specify exactly how INSEE statisticians would be expected to change their data or whether he proposed creating a new indicator alongside gross domestic product.
GDP, the standard gauge of economic performance, measures a country’s total output of goods and services in market prices.
It has been criticised as an overly narrow indicator that ignores wider factors including the health of a country’s population or the environmental costs of activities like mining and energy production.
“It is what I call ‘GDP fetishism’ to think that success in that part [GDP] is success for the economy and society,” Stiglitz said. “We need to improve our GDP measure but we should certainly not confuse GDP as a measure of well-being,” he said.
No mention was made of a plan by the European Commission to launch a new indicator to complement GDP.
The Organisation for Economic Cooperation and Development welcomed the report.
“Economic resources are not all that matter in people’s lives,” said OECD Secretary-General Angel Gurria.
“We need better measures of people’s expectations and levels of satisfaction, of how they spend their time, of their relations with other people in their community.”