Our single-minded pursuit of GDP growth is not only unsustainable: it's failing to make us happier. Tim Dean argues it's time to move beyond GDP and adopt a more enlightened metric of our national progress.

What makes life worth living? Think about that for a moment. Try to pick out at least three things that give you genuine fulfilment, things you structure your life around so you can experience them as much as possible.

Some responses might include spending time with family and friends, being in a loving relationship, contributing to your community, having a rewarding job, enjoying nature, maintaining good health, having time for leisure, feeling secure, maybe even seeking wisdom - or simply finding happiness.

Whatever you think it is that makes life worth living, as Robert F Kennedy pointed out in 1968, it's almost a sure bet that it isn't measured by Gross Domestic Product, or GDP.

GDP simply measures a nation's raw economic activity in terms of production and consumption. It makes no attempt to factor in the depletion of natural resources or the degradation of the environment. It cares not for income inequality and all the ills that come with it. It doesn't pretend to discriminate between beneficial economic activity (new infrastructure, investment in education, disease prevention, etc) and negative activity (the cost of crime, pollution, etc). And it entirely ignores whole swathes of fruitful activity, such as housework or volunteering in the community.

One sign of how destitute GDP is as a metric of well-being is that it tends to go up after a natural disaster. Reconstruction and remediation spur intense activity that is registered by GDP, while the destruction, lives lost, suffering and disruption to families and communities in the wake of a flood, cyclone or bushfire are ignored.

GDP is not, and was never designed to be, a measure of a nation's well-being. Even its creator, Simon Kuznets, said in 1934 that "the welfare of a nation can scarcely be inferred from a measurement of national income". And he's not the only economist, Nobel laureate or political leader to say so.

Yet GDP remains the default metric for measuring our progress as a nation and as a society. It is the guiding force that drives much of our economic, political and personal activity. And this single-minded pursuit of growing the national bottom line is not only desperately unsustainable, it's abjectly failing to make us any happier.

The time has come to put GDP behind us and move on to an alternative metric, one that attempts to measure those things that genuinely increase our well-being, and one that respects the finite carrying capacity of our world.

In a commentary piece in this week's Nature, Dr Robert Costanza, chair in Public Policy at ANU, and his colleagues argue that GDP should be replaced with a more sophisticated metric that represents a more comprehensive account of a nation's economic well-being.

One of the frontrunners to replace GDP is the Genuine Progress Indicator (GPI). It was proposed in 1989 and has been developed since to accurately measure not just economic activity, but also how that activity impacts the well-being of individuals living in that economy, and how sustainable that activity is.

It effectively uses GDP as its foundation, but then scrutinises economic activity in more detail, making subtractions for negative activity and adding in beneficial activity that is overlooked by GDP. For example, it makes deductions for income inequality, because $100 in the hands of a poor person does a great deal more to improve their well-being than an additional $100 in the hands of a rich person.

It also factors in the environment, in terms of the cost of pollution, the loss of wetlands and farmland, the depletion of natural resources and the emission of carbon dioxide. It also takes account of the cost of crime, not only in terms of direct impacts, but also the cost of policing, prisons and even the amount of money spent on locks and alarms.

Then it adds in the value of off-the-books work, such as housework and volunteering, as well as the benefits of infrastructure and of education, and the services rendered by durable consumer goods. It even takes account of the amount of leisure time we have - after all, what's the point of working ourselves to the ground if we don't have any time to enjoy the fruits of our labours?

If you have a close look at the numbers according to this more comprehensive metric, you can see that while Australia's GDP has increased nearly three-fold since 1950, GPI has actually declined since the 1970s, largely due to increasing income inequality, environmental degradation and loss of social capital.

GPI isn't the only alternative to GDP, but it is one of the most respected by economists and public policy experts around the world. The question now is: what's stopping us from adopting it?

"It's going to take some therapy to make the transition to a sustainable economy that isn't based on growth or GDP but on improvement of well-being," Costanza told me. And I suspect he's right.

While the unbridled pursuit of GDP growth has not done much to increase our well-being over the past few decades, it has been a triumph for big business and the finance sector, i.e. those who disproportionately benefit from raw economic activity. Not surprisingly, as a result of this windfall, these sectors - and the politicians who serve them - are likely to resist any move to a more comprehensive metric of national economic well-being.

One possible solution would be for the government to give an independent body - say the Australian Bureau of Statistics, which already publishes GDP data - a mandate to publish GPI data alongside GDP. If the government then made a commitment to announce GDP and GPI in all its economic statements, that might raise awareness of how they differ, and how we perform according to each metric. Change starts by voting for the party that commits to GPI in the next election.

Altering our national accounting method might seem pretty trivial, but I can assure you that just switching from GDP to a more enlightened alternative would have dramatic ramifications on how we weigh our national priorities, how we structure public policy, and even how we choose to work.

As Peter Drucker, one of the 20th century's leading thinkers on business and management, said: "What gets measured gets managed." Measuring what really matters would have knock-on effects on how we manage taxation, education, public investment, the environment and ultimately on how we live our lives, giving us a genuinely richer and more sustainable society, and one in which we have the ability to pursue those things that actually do make life worth living.

Tim Dean is a philosopher and science writer. He blogs here. View his full profile here.