At a general level it is not too difficult to lay
down several conditions a measure of economic
welfare 3 should fulfil. Besides including 'classical'
material welfare as described by SNA, we can identify
the following aspects that should be considered:
non-market production,
various parts of production that are not disposable
for consumption, but are needed to repair damages
caused by the economic system itself (defensive
costs),
environmental damage (that is not 'repaired'),
the reduction of future welfare caused by production/consumption
today,
the effort required to obtain this welfare, e.g., the
duration and intensity of work,
the question of (income) distribution.
Of course, there is no single way to calculate
economic welfare (at least given the actual state of
discussion). The ISEW is therefore just one such
attempt, albeit, as we think, a promising one. It never
seems clear whether economic welfare should be
measured by a single indicator or whether a group of
indicators would be more accurate. However, the
discussion of social indicators of the 1970s showed
that a problem with using multiple indicators was in
its interpretation when the individual indicators
themselves move in opposite directions. So the research
turned back to one-dimensional indicators, the
ISEW being one such example. Nevertheless, it
should be stated clearly that a one-dimensional indicator
can only give a rough estimate of the development
of economic welfare. For more detailed reports,