In 1934, the man who invented GDP told the United States Senate that it could not measure a nation's welfare. Ninety years and 232 competing alternatives later, no replacement has stuck — and the world's central banks, bond markets, and trade agreements still run on the one number its own architect warned against trusting. We know the cost of everything. We have never agreed on how to measure the value of anything.
Not investment advice. Not a recommendation to buy or sell. Research and long-horizon thinking only. Consult a qualified financial advisor before making any investment decision. Figures cited are sourced from the United Nations, the Lancet Planetary Health journal, Ecological Economics, and contemporaneous Senate and UN records, current as of writing.
In 1934, the economist Simon Kuznets presented a report to the United States Congress titled "National Income, 1929–35," built as an emergency tool to help a government that understood the Great Depression poorly enough to need one. It worked. Within a decade, the same accounting framework was helping the US estimate the cost of fighting the Second World War, and after Bretton Woods in 1944 it became the standard measure of a nation's economy worldwide. Kuznets himself, in testimony to the US Senate that same year, said the thing nobody wanted to hear: "the welfare of a nation can scarcely be inferred from a measurement of national income." He built a tool to count production. He explicitly did not believe it could tell anyone whether a country's people were actually better off.
The warning was ignored almost immediately, and has stayed ignored for ninety years. Robert F. Kennedy's 1968 presidential campaign speech remains the most quoted articulation of why that matters: Gross National Product, he said, "counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage" — and in the same breath, counts none of the things that actually constitute a life worth living. The line under this letter's title is not new either; it borrows from Oscar Wilde's old definition of a cynic, a man who knows the price of everything and the value of nothing. Apply that line to a national accounting system, and you have the precise shape of the complaint that has followed GDP since the year it was born.
"The welfare of a nation can scarcely be inferred from a measurement of national income." — Simon Kuznets, to the US Senate, 1934
The clearest empirical crack in GDP's authority as a welfare measure is not a moral argument — it is a data anomaly economists have never fully explained away. Between 1974 and 2004, US income per capita very nearly doubled. Average self-reported happiness over the same thirty-year window showed no appreciable upward trend at all. This is known as the Easterlin Paradox, and it has since been replicated in studies across Europe — the same disconnect between rising national income and flat self-reported wellbeing shows up again and again, in different countries, different decades, different survey instruments. If GDP were actually measuring what people experience as a good life, this gap should not exist. It does, reliably, and has for fifty years.
To be fair to the number, GDP per capita is not useless as a predictor — at a single point in time, comparing across nations, it does correlate reasonably well with self-reported life satisfaction and life expectancy, better than the cruder tools available to Kuznets in 1937 ever could. The Lancet's 2024 review of "beyond GDP" measurement was explicit on this point: economic growth is historically correlated with wellbeing. The honest complication is what happens after that baseline correlation is established — for a country already past a certain income threshold, further GDP growth buys diminishing wellbeing returns, while the things people actually report caring about most — health, safety, social connection, a sense that life has meaning — increasingly diverge from whatever the GDP number is doing.
A November 2025 study by Juan Pablo Ríos-Ocampo of the University of Strathclyde, alongside Giovanni Cunico and Professor Shayne Gary of UNSW Business School, set out to explain why GDP has survived ninety years of sustained, well-funded, well-credentialed criticism. Their finding inverts the obvious assumption. The "beyond GDP" movement expected that simply building a more accurate, more holistic measure would naturally lead the world to adopt it — researcher Anders Hayden's term for this belief is the "indicators fantasy." Instead, the proliferation of alternatives created chaos rather than consensus. By 2020 the researchers had documented 232 distinct alternative measures, with 77 of them introduced in just the six years between the 2009 Stiglitz Commission report and the 2015 Sustainable Development Goals agreement.
The mechanism behind GDP's survival is not that it is the best measure — by nearly every account in this letter, including its own creator's, it isn't. It survived because it became the one number every government, central bank, and bond market already agreed to compare against. Replacing GDP was never primarily a measurement problem. It is a coordination problem, and 232 competing answers to "what should we use instead" made coordination harder, not easier.
Edited annually since 2012 by John Helliwell, Richard Layard, and Jeffrey Sachs, built from a single survey question on life satisfaction across nations. GDP explains some of the cross-national variation in reported happiness — but social factors explain more of it.
Widely cited as one of the most credible real-world alternatives in active use, built directly into Aotearoa New Zealand's national budgeting process, customizable to local government priorities rather than imposing one fixed global formula.
A dashboard approach spanning health, education, and living standards rather than collapsing everything into a single income figure — explicitly designed to avoid the "one-size-fits-all" failure mode its creators attribute to GDP and GNI.
A more ideologically distinct family of alternatives — doughnut economics, wellbeing economy, steady-state economics, degrowth — that reject growth-as-progress outright rather than attempting to repair GDP's accounting from within.
GDP's flaws are genuinely well-documented and have been since the day it was invented — this is not a contrarian discovery, it is consensus among the economists who study measurement itself. The risk in this letter is overcorrecting into the opposite error: treating GDP as worthless simply because its own architect doubted it. It remains a reasonably good predictor of cross-national life satisfaction and life expectancy at a single point in time, and it is the only metric with ninety years of consistent, comparable, quarterly data across nearly every economy on earth — a genuine practical advantage that none of the 232 alternatives can currently match, however philosophically superior some of them may be.
The 2026 "Beyond GDP" momentum is real, but the Strathclyde/UNSW research gives a specific and uncomfortable reason to be skeptical that this round will succeed where the previous ninety years did not. If the core obstacle really is coordination rather than measurement quality — too many credible alternatives splitting attention rather than too few — then a UN conference and a Secretary-General statement, however well-intentioned, do not by themselves solve the coordination failure. What would actually displace GDP is not a 233rd alternative; it is some critical mass of major economies, central banks, and rating agencies agreeing to anchor decisions to the same single replacement simultaneously — and nothing in the current research suggests that convergence is closer in 2026 than it was after the 2009 Stiglitz Commission.
The most striking thing about GDP's ninety-year run is not that it has flaws — every economist who studies it, starting with the man who built it, has said as much from day one. The striking thing is how little disagreement there actually is about the diagnosis, and how much disagreement remains about the cure. Kuznets warned against using his own creation as a welfare measure. Kennedy made the same case from a podium thirty-four years later. The Lancet, the UN, and 800 climate researchers are making a version of the same case again in 2026. What none of them have solved, across nine decades of trying, is the harder problem underneath the complaint: agreeing, together, on what should replace the one number everyone already uses. Until that coordination happens, the world will keep doing exactly what Kuznets warned against — reading national income as if it were a verdict on whether a nation's people are actually better off, because for ninety years it has been the only number everyone agreed to check.
Long-horizon thinking on capital, technology, and the forces shaping the next decade of wealth creation. Written from first principles. Not consensus. Not noise.