How Maryland Is Envisioning An Economic Future Beyond GDP

June 19, 2013 | | Think Progress |

In a keynote address last Friday in Baltimore, Maryland Governor Martin O’Malley broke down the reasons behind his administration’s decision to make Maryland the first state in the union to employ a Genuine Progress Indicator (GPI), a quantitative assessment that integrates both the costs and the benefits of economic development into a monetary measure of whether growth is truly enhancing the welfare of individuals and communities. It marks a major, though mostly unnoticed, move toward thinking about the economy in terms of what works for people rather than sheer, raw output.

Vermont, Utah, Minnesota, and Oregon are currently investigating whether to follow Maryland’s lead on formally integrating the GPI into policymaking operations. Twenty additional states also looking to learn from Maryland’s example met last week in Baltimore at a summit organized by Demos, a New York-based progressive think tank.

The GPI is designed to augment or replace more traditional measures of the economy like the Gross Domestic Product (GDP) or Gross State Product (GSP) — aggregate measures that treat social costs such as the clean-up of environmental pollution or the building of new prisons as positive inputs to economic growth while excluding non-monetary inputs such as volunteerism, leisure, and housework from these calculations.