Our entrenched view of economic progress remains unyielding. But is it the right one?
France's President, Nicholas Sarkozy, has recently announced plans to include happiness and wellbeing in traditional measures of economic progress.
He cites the current global crisis as the catalyst for reforming our concept of economic progress.
Mr Sarkozy may be indulging in political posturing, but his point is valid.
Calls for reforms of the measures of economic progress have been around for years.
But it is worth reconsidering what is meant by economic progress and how it is measured.
This may be an essential tool in resolving the issue of climate change.
Ideas matter because they shape our view of reality.
They influence our attitudes towards what is right or wrong or natural and unnatural.
Consider how fundamental beliefs have changed throughout human history: attitudes towards slavery, sexuality, the role of women, work habits, religion and politics.
Until the American and French revolutions, the practice of democracy was limited to a very brief period of Athenian history.
Nowadays, most of us in the West regard democracy as a political norm.
In medieval Europe, most people held strong Christian beliefs.
Life could be nasty, brutish and short, but suffering was mitigated by the vision of salvation in the afterlife.
This was the key drawcard of the Christian church.
In the modern era, this belief in a vision of eternal salvation has been replaced for many people by the concept of human progress.
This faith in progress emerged during the European Enlightenment in the 17th and 18th centuries.
It was associated with such names as Voltaire, Rousseau and Adam Smith.
At a national level, progress is commonly measured by economic growth.
All countries seek economic progress because it is regarded as the path to national wellbeing.
Politicians frequently quote higher living standards as the reason for taking or avoiding unpopular decisions.
But many of us are unaware of what is meant by economic progress and how it is actually measured.
The holy grail of economic progress is measured by a system of standardised national accounts that produce a figure called Gross Domestic Product (GDP).
This measures the dollar value of all final goods and services produced by an economy.
The standard of living of a country is this output (GDP) divided by the population.
It attempts to measure the actual output of things per person in a country.
This statistic is used to produce league tables of countries.
It is like the English football league tables with the winner countries at the top and the losers at the bottom.
The history of this statistic is fascinating and surprisingly little known.
National income accounting was developed by a Russian migrant called Simon Kuznets in the early 1940s for the Americans.
Until that point, there was no statistic that could be used to measure or compare the economic prosperity of countries.
Mr Kuznets was given the job of measuring United States production because the Americans wanted to know the extent to which they could fund their war effort.
Mr Kuznets was sceptical about using his system as a measure of national wellbeing or a basis of comparison between countries, but this is what it has become.
We now accept that when a politician says we must or must not introduce a policy because it will affect our standard of living, they must be right.
Anything that harms our standard of living as measured by Mr Kuznets' accounts must be bad.
Mr Kuznets' system is interesting for what it doesn't measure.
It does not measure the environmental impact of production.
It does not measure the hours worked to gain the output, so it ignores work/life balance.
It does not care what the output is, so long as it can be sold.
New Zealand could easily increase its standard of living under the system.
We could mill all native trees. strip mine the West Coast and open up commercial fishing to all.
This would increase output significantly for several years but we would end up in a barren landscape.
We could become a major producer of land mines for export or offer ourselves as a toxic waste dump for hazardous materials.
We could legalise child labour.
Output would increase, but we would be living in a bleak Dickensian cesspit . . .
This is why the Resource Management Act and labour laws are always under pressure from advocates of economic progress.
Under Mr Kuznets' measure, they are seen as an impediment to progress.
The standard concept of economic progress is running headlong into the problem of global environmental destruction.
Our entrenched view of economic progress, even though it is a very recent concept, remains unyielding.
We may all end up with large screen TVs, big SUVs, numerous cellphones and massive mansions, but we will live in fear of frequent environmental catastrophes.
All because we got our statistics wrong.
If we are serious about addressing global warming, we need to redefine what is meant by economic progress.
We think we are heading towards material nirvana on Earth.
Our failure to account for the environmental costs could prove deadly. - Peter Lyons.
