That’s why the year-on-year performance of the Gross Domestic Product (GDP) continues to dominate national policy and fascinate the media. But a new composite Measure of Domestic
Progress (MDP) – designed to factor in the environmental and social costs of growth – highlights how far off-track we might be in our relentless pursuit of GDP (Figure 1).
The results are salutary:
• GDP has soared in the last 50 years; but MDP has struggled to take off at all.
• The divergence is especially transparent over the last 30 years: GDP increased by 80 per cent, but
MDP fell sharply during the 1980s and has not yet regained its 1976 peak.
• In spite of improvements in air and water quality, environmental costs have risen by 300 per cent in the last half century (Figure 3).
• Social costs have risen 600 per cent in the same period with a staggering 13-fold increase in the costs of crime and a four-fold increase in the costs of family breakdown (Figure 4).
• The Labour Government has so far failed to curb income inequality which rose by a factor of seven during the last 50 years.
• MDP bears a closer resemblance to life-satisfaction data – which has not risen for 30 years (Figure 5) – than it does to GDP.
• The ‘hidden’ costs of future climatechange and resource depletion constitute a continuing threat to longtermeconomic stability.

In short, the persistent divergence of MDP from GDP raises difficult questions for the Government’s Sustainable Development Strategy, and casts serious doubts on the myth of economic progress.

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