The beginning of a new year is a great time to pull back and look ahead at the big picture. The business community comes alive with sold-out 2014 forecasting lunches and seminars. Without exception, they all focus on prospects for economic growth, on the assumption that if we can achieve that, we’ll have more opportunity, more money for health and education, more life satisfaction, more economic security, better health and, therefore, we’ll all be happier. We measure economic growth through a rising GDP.
My forecast for 2014 – OK, my fervent, desperate wish – is that this will be the year we recognize the fallacies of a growing GDP and start aiming at other goals.
In December I tried that by seeking out other composite measures of B.C.’s economic well-being, to see how 2013 really stacked up. The GDP, as we all know (don’t we?), reflects only one aspect of economic well-being: society’s output per person. Spending on cleaning up oil spills, rebuilding after a natural disaster, treating the growth in diabetes, legal fees from divorce trials, destroying ecosystems, polluting the air, all this counts as positive on the GDP ledger. We grow GDP by treating the Earth as if it were a business in liquidation.
I tracked down the Centre for the Study of Living Standards, which expands economic well-being to include per capita consumption, per capita wealth, economic equality and economic security in Canada. No luck. Its data only went up to 2010.
I looked for the BC Progress Board data, which gets beyond the GDP to track personal income, jobs, environmental quality, health outcomes and social conditions. That starts to widen the range to get closer to what we really want from our economy: widespread well-being that lasts for more than one generation. The BC Progress Board has been disbanded.
Meanwhile we are being bombarded with scattered data showing that in lockstep with our growing GDP, we are beset with other kinds of malignant growth: in personal debt, biodiversity loss, income disparity, unemployment, resource shortages, poverty and economic instability. We could well be at the point where economic growth is making us poorer when other factors like these are taken into account.
Still in search of the bigger picture, I picked up a copy of Enough Is Enough, Building a Sustainable Economy in a World of Finite Resources, by Rob Dietz, the former executive director of the Centre for the Advancement of the Steady State Economy (CASSE), and Dan O’Neill, a lecturer in ecological economics at the University of Leeds and the chief economist for CASSE. I had heard O’Neill talk in Vancouver last fall and was impressed by his pragmatic approach to the massive changes coming at us and his call for “a map for economic development that properly accounts for the environmental, social and economic challenges of modern times.”
The book tries to show us what a steady-state economy would look like, to help us through our fears of turning away from GDP-driven economic growth, and show us a future we could all believe in.
In that desired future, we would:
- limit resource use and waste production;
- stabilize population;
- distribute income and wealth equitably;
- reform monetary and financial systems;
- change the way we measure progress;
- secure full employment; and
- rethink how businesses create value.
The authors collected lots of ideas about how to do all of that. The common thread is that they are all built around a shift from the culture of consumerism to a culture of sustainability.
The first, vital step to doing that is to knock GDP off its pedestal and start tracking genuine progress indicators. As every entrepreneur knows, what isn’t measured isn’t managed. •
