Below is an excerpt from a recent essay from the 5,000 LB Life, a new series by The Architectural League of New York, exploring issues that “are fundamental to our future prosperity under the pressures of climate change.” For the full article, read on here.
Since the very creation of the Gross Domestic Product (GDP) indicator, people have criticized it as a poor measure of societal progress. Even the father of the GDP, Simon Kuznets, explains that “distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for more growth should specify more growth of what and for what.”
Yet somehow, even today, after its flaws have been critiqued for decades, GDP is the de facto measure that policymakers, economists, and journalists point to day after day as the measure of national success. So it’s not surprising that so many people regularly clamor for abandoning GDP, encouraging adoption of the Genuine Progress Indicator (GPI), Gross National Happiness, the Index of Sustainable Economic Wellbeing, Green GDP, or some other alternative.
But in truth, by focusing on changing indicators, it’s like we’re trying to make a car drive more slowly by making alterations to the dashboard. Our societies, our cultures revolve around growth. Failure to grow is understood implicitly and explicitly as evidence of a dysfunctional society—needing immediate intervention through stimulus (Check Engine!) or some sort of government action, even if the economic doctrine of the time is otherwise laissez-faire.
Indeed, in the growth-centric consumer cultures dominant around the globe today, growth is always good—unquestionably. Unless perhaps it’s growth in cancer rates, but even that means growth in cancer drug and technology sales, growth in cancer research spending, growth in casket and cemetery plot sales. In GDP terms, even cancer seems good for the economy.
Transcending this obsession with GDP could help reveal that societies aren’t actually better off just because more expenditures are being made by consumers, businesses, or the government. A new article in the journal Ecological Economics analyzes the global Genuine Progress Indicator (GPI) for the 17 countries that have data available. (These 17 countries make up 53 percent of the world’s population and 59 percent of global GDP). GPI is very similar to GDP in what it measures: consumer purchases, government spending, and business investments. But it subtracts out some bad forms of economic activity, like pollution and resource degradation, costs of accidents, and expenditures on fighting crime, and adds in some good ones like the estimated dollar value of hours spent volunteering or parenting. What the analysis shows is that while GDP has nearly doubled since 1970, GPI has stayed essentially flat, suggesting little progress has been made in the past four decades.
Source: Ida Kubiszewski et al, “Beyond GDP: Measuring and Achieving Global Genuine Progress,” Ecological Economics, 93, (2013).
But even GPI still celebrates growth in consumption and economic activity at its base—just modified to value certain types over others. If this indicator had been adopted back in 1962 when Kuznets was calling for measuring the quality of growth and when “just” 3.1 billion humans were living on the planet (and still within Earth’s ecological capacity), GPI might have worked great to direct human civilization’s growth along a sustainable path. Fifty years later, humanity has so far transcended the limits of the planet that we not only have to stop growing as a whole, but overdeveloped countries like the United States have to proactively degrow their economies until they return to well within Earth’s limits.
The rest of the article explores the need for degrowth and the process through which we might be able to achieve this. It’s not just about changing metrics but making the hard choices of what changes we’re willing to make for a sustainable or at least somewhat stable future. As I conclude:
By proactively thinking through which elements of modernity we want to save, and which we want to scrap, we can ensure that the best parts of modernity actually make it through the economic and ecological transition that’s coming. I, for one, vote for antibiotics, vaccines, and other life-saving technologies, but am perfectly willing to abandon the majority of cars, planes, disposable diapers, and convenience foods. If we don’t make these hard choices now then nature will make them for us, and the future will probably get pretty bleak for all but the very few.