History is rife with inventions whose creators came to regret their widespread adoption. Alfred Nobel was so distraught by the destructive capacities unleashed by his invention of dynamite that he developed the Nobel Peace Prize to compensate. Robert Oppenheimer was guilt ridden by his reputation as the father of the atomic bomb; he eventually turned to Hindu scriptures for solace, which resulted in the paraphrased quote, “I have become death, destroyer of worlds.”
A less known regretful visionary is Simon Kuznets, who developed his metric of Gross Domestic Product (GDP) for the United States government during the Great Depression. Desperate for an all-encompassing set of data that could fully evaluate the strength of the economy, the U.S. government sought the counsel of the Belarussian immigrant economist. Kuznets, along with John Maynard Keynes, devised a network of metrics that measured the market value of all goods and services produced in the economy.
The metric is an impressive achievement as far as gauging a nation’s productive capacities. However, it has nothing substantive to say about the actual progress or well-being of a society. Kuznets knew this; in 1934, Kuznets was quoted as saying “the welfare of a nation can scarcely be inferred from a measurement of national income.” Kuznets continued to express similar sentiments throughout the rest of his life.
But Kuznets’ warnings proved to be futile. Some 80 years later, GDP has been widely recognized as the main measure of national progress, so much so that it has become deeply internalized by political leaders throughout the world.
As is widely discussed in academic circles and more recently by punditry, GDP is a problematic measurement for many reasons. GDP does not take into account how the wealth generated by economic growth is distributed, whether growth leads to increased standards of living and so on. As an overarching measure of progress, it is quite weak.
But perhaps the most dangerous aspect of the GDP hegemony is its environmental externalities. While reliably mentioned in articles outlining GDP’s shortcomings, GDP’s contribution to human-driven climate change is often relegated to one or two sentences.
However, the continued degradation of the natural environment is by far the most urgent aspect both ignored and exasperated by GDP; it should frighten us all. As the 2019 UN Climate Summit looms, world leaders and diplomats should abolish it.
Anthropologist Jason Hickel, in his brilliant 2017 book, “The Divide: A Brief Guide to Inequality and its Solutions” described the conundrum aptly.
Hickel writes:
“If you cut down a forest and sell the timber, GDP goes up. If you strip a mountain to mine for coal, GDP goes up…GDP includes no cost accounting. It does not measure the cost of losing the forest as a sinkhole for carbon dioxide, or the loss of a mountain range as a home for endangered species.”
Today, GDP growth is expected to grow by at least 2-3% per year; anything less is considered a failure. As mentioned above, the primacy of GDP growth as the main indicator of progress has far reaching consequences; developing nations in the global south, under direction from international organizations like the IMF, are steered to focus on GDP growth to develop their economies. Of course, some of this is necessary–parts of the world that have contributed the least to global warming have a moral right to industrialize on their own terms, any future “carbon budget” of sorts would only be justified if they get to use a bigger chunk of the quota. But the perpetually grim addiction to an imprecise, neglectful metric like GDP will almost certainly fast track the destruction of our planet. If GDP growth were to continue according to what most economists feel is necessary, we would easily overshoot our planet’s environmental capacity, perhaps even sooner than what climate scientists have predicted. More cars, airplanes and deforestation to make room for commercial development cannot continue on its current trajectory without putting global temperature increases well over 4%, which would have disastrous results.
There’s a dark irony to all of this, too. The same economists who continue to fetishize GDP growth tend to warn about climate change’s potential slowing effects on global growth. As is tradition among neoliberal economists, they get the priorities all wrong. The fetishization of GDP growth sows the seeds of its own destruction, to paraphrase a famous philosopher who also warned of environmental destruction as the result of a nihilistic profit motive.
The UN and similar international organizations should move to displace GDP’s status as the most exalted form of progress. There are plenty of other options available. The GPI, or Genuine Progress Indicator, is a more holistic metric that adds factors like social work to GDP and subtracts negative externalities like pollution. A half-dozen states in the U.S have already adopted this metric, such as Washington and Maryland. Similarly, the New Economics Foundation’s “Happiness Index” measures life satisfaction, inequality and ecological footprints as its main progress indicators. While not as statistic-based as GPI or GDP, technocrats in today’s halls of power have much to learn from alternative approaches to measuring societal well-being. The small South Asian country of Bhutan was an initial influence on the Happiness Index; the landlocked nation adopted a “Gross National Happiness” index in 1972 that has since urged UN member-states to adopt a 2012 resolution pledging to move toward more holistic metrics. However, seven years later, GDP still reigns supreme, despite efforts by various nations and a growing academic re-litigation of its validity. (Nobel-Laureate Joseph Stiglitz, German social-science professor Phillipp Lepenies and even arch-capitalists such as Forbes commentator John Mauldin have challenged GDP’s relevance)
The coming of the Anthropocene will bring about a wholesale reorientation of our lives and attitudes. After all, if 2018’s IPCC report is indeed serious about its call to “radically restructure” the global economy, a radical restructuring of our values and lives would logically follow. Starting with upending GDP would be a start. The U.N should act accordingly.
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