Why is economic growth our measure of human progress?

Whether you believe that ‘money makes the world go round’ or that it’s the ‘root of all evil’, increasingly humanity is waking up to the fact that money can’t ‘buy you happiness’ and that it’s certainly no longer an accurate or helpful measure of planetary progress. Our world faces multiple crises of which continuing economic growth has often been the cause and less often the solution.

Today the planet is a miserable and frightening place for most of its inhabitants. Many of the rich are not happy, while the gap between the rich and poor gets wider. The wealthiest 80 people in the world have the same wealth as the poorest 50%, or 3.5 billion people. Our pursuit of economic growth means that we are ruining the planet at such a rate that – sooner than most people can imagine – large parts of it will become uninhabitable. Our soils and forests are disappearing, our oceans are being vacuumed of fish, unstable financial markets lurch from crisis to crisis, disengaged people vent their anger and frustration at oppressive governments and we live in an economic system that rewards our greed and immorality and that forces those living in rural areas and no longer able to support themselves, more than a billion people, to swarm towards cities where there is no work for them.

In 2014 young people in 20 countries around the world were asked ‘to what extent, if at all, do you feel that today’s youth will have had a better or worse life than your parents’ generation or will it be about the same?’ On average, only 37% of young people living in the ten wealthiest countries ranked by gross domestic product (GDP) thought that life would be better for their generation than it was for their parents. In the US, the richest country, only 26% thought it would be better.

  Country GDP in millions of US$ (World Bank, 2013) % of people aged 29 or under who believe that today’s youth will have had a better life than their parents’ generation (Ipsos Mori, 2014)
1 USA 16,768,100 26%
2 China 9,240,270 76%
3 Japan 4,919,563 41%
4 Germany 3,730,261 30%
5 France 2,806,428 16%
6 UK 2,678,455 22%
7 Brazil 2,245,673 48%
8 Italy 2,149,485 21%
9 Russia 2,096,777 41%
10 India 1,875,141 46%
  AVERAGE(Rounded to the nearest whole) 4,851,015 37%

When the future is looking bleak for the wealthiest countries on the planet, it’s perhaps time to reconsider GDP as a measure of progress.

Gross domestic product, or GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, but usually calculated annually. GDP has traditionally been used to measure progress economically, but fails to take into account social and environmental ‘wealth’ or causes of social tension or inequality, something that I believe is essential to truly understanding if, how and where human progress is being made.

GDP measures everything “…except that which makes life worthwhile.”

“Our Gross National Product…counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armoured cars for the police to fight the riots in our cities…, and the television programs which glorify violence in order to sell toys to our children. Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.”

Robert F. Kennedy, speech at the University of Kansas, March 18, 1968

There is already an abundance of measurements that we could call on to replace GDP and give a fairer, more useful picture of what is and isn’t working and how we go about creating a world that works for all, not for the few. So far, suggestions range from birth weight (usually a good indicator of a child’s likely future quality of life) the number and sound of birds in a city (a good indicator for biodiversity); and ownership of washing machines (with the assumption that their requirement for piped water and electricity make them a good measure of development); to the economic emancipation of women. I’m sure you can think of more…

Today, I’d invite you to think about why our leaders and big businesses measure economic growth as a measure of human progress and how we can move beyond measuring success by how much we makerather than how we live.

What do you think human progress is? And why is growth the only answer? #WhyGrowth

This post was originally posted on The Rules website on 11th September 2015.

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