Society's success cannot be measured only by economic growth. This view is gaining wider acceptance among academics as well as policy makers.
Kenneth Boulding wrote with great sense of irony: "the only people who believe in infinite growth in a finite world are madmen and economists". There are limits to growth because of the scarsity of natural resources and its overexploitation which makes growth uneconomic in the sense that marginal costs may exceed marginal benefits*. Natural disasters, for example are known to increase gross domestic product. But since many large costs, to repair the damage such as providing temporary housing to displaced people, are not considered as real costs and are kept off balance sheet, policy makers continue to pursue growth no matter the cost.
Several economists have challenged this conventional wisdom and have advanced a set of ideas that put in question growth as a paradigm and outline a vision of progress based on qualitative measures. Nobel prize, Joe Stiglitz, together with Amartya Sen and Jean Paul Fitoussi issued in 2008 a report about alternative measures of economic progress.
It is hopeful to see a modern nation such as Japan stepping off the ever-accelerating machine of infinite economic growth and finding that societal well being remains high (FT January 6). Japan is not Bhutan, a country which is proud of being at the forefront of measuring happiness as an indicator of social welfare.
What do we have for all the growth of recent times? Flat screen televisions and other incredible innovations, but also deforestation, climate change and stagnant incomes for all but the richest households. Shouldn't we rethink radically our model of economic development as a way out of the crisis?
As Robert Kennedy said in a speech in 1968, GDP "measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile".
* See the work of Herman Daly, an ecological economist credited of having originated the concept of uneconomic growth and the paradigm of steady state economy (http://www.sd-commission.org.uk/publications/downloads/Herman_Daly_thinkpiece.pdf )