The significance of GDP: a new take on a century-old question

Abstract

ABSTRACT What is the significance of GDP per capita to a society? What does it represent conceptually? These questions have been addressed in past decades, engendering extensive explorations of the limitations of the indicator, yet answers have proved problematic or partial. The paper presents the main conclusions so far drawn and builds upon them to present a new reading of the significance of GDP per capita. At the heart of this reading is the view that, while GDP per capita is not indicative of the welfare of individuals, it is indicative of an irreducible ‘group well-being.’ This view, however, requires one to relinquish the belief that only individuals can be ‘well.’ It turns out that the allegedly orthodox view, which sees GDP as a human-centered indicator, requires an unorthodox philosophical standpoint, one that accepts an irreducible group well-being. The paper presents this alternative interpretation and addresses its upsides and limitations.