This article identifies ways to improve economic welfare by dealing with observed market failures in the capitalist system. Rather than taking the more familiar theoretical approach, we make the case for broad targeting policies, which would bring welfare improvement in terms of both GDP and the genuine progress indicator (GPI). Several recent developments are expected to make further contributions to improving both measures. Efforts to address sustainability and stability in the international context, NPOs and ESG investing are expected to grow, an encouraging sign of social progress and the advancement of science. Through the COVID-19 pandemic and the Russia–Ukraine War, we have learned that international peace and the generosity of developed countries are necessary to create and sustain a fair and just society. We envision a complementary relationship between GDP and GPI in which the GDP framework is used for policy purposes and the GPI concept is used for monitoring performance from a welfare perspective.

This article explores the relationship between GDP and the genuine progress indicator (GPI) and examines the possibility of reconciling the two measures. GDP is not an indicator of well-being: to address the welfare perspective, the measure of economic welfare (MEW) was constructed by revising GNP and further developed to create GPI (and the index of sustainable economic welfare —ISEW). GDP finds great wage-earning differentials; while GPI is substantially affected by unpaid work, not only by the magnitude of this factor but by its quality implications. We suggest moderate reforms and policies for the improvement of GDP, which would also have the effect of improving GPI. Both concepts are complementary and separate for practical purposes: GDP is used to formulate government policy and GPI measures what has been achieved from a viewpoint of welfare.

This paper explores the importance and possibility of GDP reform by examining the weaknesses of the current GDP concept. The GDP concept itself involves flawed metrics; there are more effective measures of economic and societal well-being. Here we limit our argument to economic well-being. The weaknesses of GDP can be broadly divided into two primary categories: market workability and the GDP framework. We present four types of GDP reform, among which, we consider further, is a modest improvement on current GDP. If not dealt with, the misleading aspects of GDP are likely to produce a misguided economic growth strategy and reduce the likelihood of a ‘positive sum’ result.