How Do We Measure the State of a Social System?

 

In A New York Times article (May 26, 2026) titled G.D.P. Is a Flawed Measure of Prosperity. Alternatives Are on the Way, Lydia DePillis documents our continuing fixation with GDP (Gross Domestic Product) as a measure of societal performance. The AI Overview (above) defines System State based on the Purpose of the System. For the purpose of a Capitalist System, GDP is great. But, not everyone lives in a Capitalist System and, for those that do, not everyone benefits from GDP and the profits and wages it creates. In this post, I will look at at GDP as a measure of Societal Performance from the standpoint of the World System and the WL20 model (a State Variable model).

Full Disclosure: This is my chance for Defending the use of State Space Models for analyzing Societal Development.

Notes

Pasdirtz, G. (1981)  Instability and Late Nineteenth Century German Development

Kalman, R.  E. (2006)   A System-Theoretic Critique of Dynamic Economic Models 

WL20 Correlation Matrix

Presented above is the correlation matrix for the fourteen indicators I have used in the WL203 Model. From one perspective, it is ridiculous to think that fourteen indicators can define the state of a system with (currently) 8.3 Billion people and 195 countries. On the other hand, GDP is one of the indicators and we routinely summarize the state of the World Economy using GDP alone!

Things to notice:

• All the indicators are highly correlated. The only indicator that has some low correlations is the Living Planet Index.
• GWP (Gross World Product) is highly correlated with all the other indicators!
• There are lots of interesting correlations in the matrix but is there some way to reduce the complexity of the information to hep define the state of the World System? 

WL20 Data Definitions

• Ecological Footprint measures human demand on natural capital, i.e. the quantity of nature it takes to support people and their economies.
• KOF Globalization Index an index of the degree of globalisation of 122 countries.
• Living Planet Index an indicator of the state of global biodiversity, based on trends in vertebrate populations of species from around the world. The Zoological Society of London (ZSL) manages the index in cooperation with the World Wide Fund for Nature (WWF).

WL20 Measurement Model

WL20 Time Plot and Predictions

WL20 Forecast

WL20 System Matrix

WL20 Attractor Path