Umair Haque of The Atlantic recently proposed a supplemental measure of economic well-being, a “national balance sheet” to go along with the “national income statement” that the GDP calculation represents. While the GDP formula (Y= C+G+I+NX) incorporates consumption, government spending, investment and net exports, Haque suggests another measure following the formula of W= N+F+I+H+S+E+O. This formula states that “real human welfare equals natural capital, plus financial capital, plus intellectual capital, plus human capital, plus social, emotional, and organizational capital.” Though Haque’s prescribed metric seems rather ambiguous and difficult to quantify when viewed pragmatically, the components of his “real human welfare calculation” do offer an alternate way of viewing not only current domestic economic well-being and viability, but also the country’s ability to continue to grow in the future.
If United States leaders can focus not only on the short-term factors such as private sector production and investment which factor into our current GDP calculation, but also consider inputs such as human capital and intellectual capital when making policy and budgeting decisions, the country may be better equipped to succeed in the long-term. By adopting policies targeted at improving science and math programs in primary and secondary education, for example, policy makers could inspire a new generation of scientists, engineers, and entrepreneurs, occupations necessary and desperately needed in the digital age. While Haque’s formula may not inspire any major re-examinations of economic theory regarding a country’s relative economic strength, his metric does perhaps offer a different perspective when addressing domestic economic well-being, one which could ultimately improve both current and future economic conditions.