Nobody Knows the Real Price of a Forest—and That’s a Problem – Facts So Romantic

Sir Partha DasguptaJohn Steele

Wealth itself is observable and objective, a measure a value. And something has value if it is desired. But isn’t desire inescapably subjective? If it is, how can economics determine wealth?

Almost 250 years after Adam Smith’s The Wealth of Nations, the answer to this question remains unclear. “These are still early days in the measurement of the wealth of nations,” says Cambridge economist Sir Partha Dasgupta. But he thinks that we now have the tools, both theoretical and empirical, to begin to understand how wealth grows and declines. For one thing, it will involve pricing and depreciating nature itself—something that Gross Domestic Product (GDP) doesn’t do.

Dasgupta sat down with Nautilus to talk us through the ideal economic metric.

Is GDP likely to last as a measure of a nation’s economic health?

It’s a non-starter as an indicator of what the future may hold. It was originally designed to give an idea of the level of economic activity. But then it began to be used for a very different purpose. In the 1930s something like 20 to 25 percent of the workforce was out of work in the United States and the United Kingdom;…

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