A new report comes up with a better way to size up wealth
... Gauging an economy by its GDP is like judging a company by its quarterly profits, without ever peeking at its balance-sheet. Happily, the United Nations this month published balance-sheets for 20 nations in a report overseen by Sir Partha Dasgupta of Cambridge University. They included three kinds of asset: “manufactured”, or physical, capital (machinery, buildings, infrastructure and so on); human capital (the population’s education and skills); and natural capital (including land, forests, fossil fuels and minerals).
...Human capital represents 88% of Britain’s wealth and 75% of America’s. The average Japanese has more human capital than anyone else...
...In 14 of the 20 countries studied, these increases in wealth outpaced the growth of their population, leaving per-person wealth higher in 2008 than in 1990. Germany, for example, increased its human capital by over 50%. China expanded its “manufactured” capital by an extraordinary 540%.
... Now that economists have shown that such wealth can be measured, they must decide what it should be called. In his earlier academic work Sir Partha calls it “comprehensive wealth”. The UN report dubs it “inclusive wealth”