Let’s measure human progress instead of GDP growth

Cross posted from The Conversation

by 

PhD Scholar, Institute for Sustainable Futures, University of Technology Sydney

Ever since 1944, Gross Domestic Product (GDP) has been a primary measure of economic growth. It’s in the news regularly and, even though few can define what it means, there is general acceptance that when GDP is growing, things are good.

There are problems with this simplistic formulation.

GDP measures production only. It does not capture collapsing fish stocks, increasing obesity and diabetes, or new types of synthetic drugs. When people choose to work part-time to have a better work-life balance, GDP actually goes down.

This narrow focus distorts our perception of progress. It guides our representatives to focus only on certain things – what is measured – and allows them to ignore what isn’t quantified and regularly reported.

But a new set of measures is slowly being established, which aims to capture a wider range of human experiences and reset our idea of “success”. Called the UN Sustainable Development Goals (SDGs), these aim to include all the main pillars of a progressive society, from physical safety through to economic opportunity and good health.

SDGs will force action by highlighting what is currently covered up by the narrow measures of how our economy and society are faring.

A new way of framing progress

The SDGs arose out of the expiration of the Millennium Development Goals in 2015 (which focused primarily on poverty reduction). Out of a growing awareness of the ecological limits of the planet, and a desire to ensure that progress is fair and accessible to all people, attempts were made at creating a comprehensive set of national goals for all nations.

UN Sustainable Development Goals. UNDP, CC BY

Although the goals are non-binding, they have received unprecedented support. They were ratified by all member states of the UN General Assembly in 2015 and endorsed by international leaders such as Pope Francis and Bill and Melinda Gates.

The SDGs are accompanied by significant international diplomatic pressure. Each country is expected to commit resources and to gather and share data on progress towards each goal.

For decades, countries and international agencies, such as the World Health Organisation, World Bank, United Nations Development Program and UNHCR, have collected and shared data on various aspects of life. A mass of data has accumulated but never been organised into a framework that can be used as a national scorecard.

This leaves a substantial gap between the detailed data we have on the actual lives led by people around the world, and the indicator national governments use to measure progress.

Measurement leads to action

The focus on GDP leads to mantras such as “jobs and growth” with an urgency that implies that there is not the time nor the resources to make economic growth fair or sustainable. Further, short election cycles make quick-grab economic gains more attractive than putting in place long-term plans for a more sustainable and fairer future.

Once there are set targets for goals like renewable energy we should expect that these issues will attract more attention from politicians. Once established and regularly reported, measures for targets like renewable energy and accessible green spaces in cities will create incentives for politicians to act. If they don’t, the public will have relevant information to track progress.

The SDGs are an important step to quantify and force progress.

We’re under way

Institutions with longer time horizons – universities, NGOs, statisticians and think tanks etc – are already on board. SDGs are now on the agenda of conferences across sectors of society from the National Farmers Federation through to the Australian Bureau of Statistics and the Department of Foreign Affairs and Trade. They touch all sectors and every institution has a place within one of the goals.

With the goals and targets in place, work is being undertaken across institutional stakeholders to develop policy tools and frameworks. This strengthens the opportunity for evidence-based policy that relies on past data, present benchmarking and quality evaluation. SDG networks and associations, such as SDSN Australia/Pacific, have been formed to foster the development of the actual metrics.

SDGs will filter out to the public one headline and press release at a time. Expect to see headlines like “Norway, number 1 in education, what are they doing and what can we learn from it?”. Unlike our current metrics, the SDGs will be a common set of goals and measures able to track progress and provide real baselines and comparisons of what matters most.

Comments

  1. Sweet ideas but possibly subjective in evaluation I’d suggest.

    I like @humanprogress and @MaxCRoser on Twitter for positive outlooks (which are many) neglected in the Age of Armageddon.

    I do worry for the fish though. Vote with your menu.

  2. GDP isn’t the only measure of prosperity used by economists.

    GNP is relevant. Life expectancy, infant mortality rates, are also relevant.

    Debt levels are extremely relevant.

    Whats the point of spending $5 on debt to squeeze out another $1 growth in GDP for that year ? Thats pretty much the return on investment we’re getting, and China has been getting, in recent years.

    • exactly. GDP is great simple indicator in a simple economy; in ours where such high proportion is sucked into housing and debt payments, GDP is not. residual GDP after debt payments and housing would be interesting over time. And is not the financial sector included as GDP? joke

  3. Most of these proposed metrics are highly subjective and based on socialist principles.

    Measuring #1,#2, #3 and #6 seem reasonable, these kind of things can objectively be quantified.

    The rest of it is just the green manifesto.
    But measuring inequality ? climate actions ? Gender inequality ?

  4. Chris, this is just more of the bleeding-heart leftie SJW PC claptrap – caring about real people and long-term consequences rather than abstract numbers and next quarter’s profits – you were getting criticised for elsewhere.

    Good on you. 😉

  5. How about home affordability? Debt? or is the cancer spread all the way up to the UN? Some good things in there but it starts to get pretty ephemeral towards the end.

    • Followed the external link and top line of Goal 11 (Sustainable Cities and Communities) targets:
      “By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums’

      • Does it define this in some numeric form? How are these things going to be judged objectively? Otherwise it sounds like just a feel good goal taht no-one will care about. I dare say, it would almost be designed to ensure nothing is done and the world becomes worse.

        What we need is a list of quantified characteristics of a nation. This could then also be represented as a percentile. A goal could then be more concrete like 4 to 1 house price ratio. If “affordable” is the only qualifier, then I’m sure NIRP and some grants can make it happen.

        I don’t see any numerical measures or methodologies for this Goal 11.

  6. ceteris paribusMEMBER

    You mean the things that everyone values their life against. Except politicians and economists who know the price of everything and the value of nothing.
    Thank you for cross-posting Chris.

  7. It would require the parasite class relinquishing it’s power. Therefore there is little chance of it happening.

  8. reusachtigeMEMBER

    More imposition of communism upon us by the Elites! GDP is the best because it is driven by the free 1%ers and is economical and economics and wealth creation is what drives great nations to success!!

    • Ronin8317MEMBER

      I will have to disagree with you there. Every beautiful people should knows the only real measure of human progress is increasing house prices!!

      • High and rising land prices driven by rentier interests will destroy any empire, any country – just ask the Romans.

        “I love the smell of napalm in the morning.” A proxy for burning flesh.

  9. Why doesn’t Macrobusiness set up a few indexes based on economic metrics that make sense, and give each index a catchy name.

    The Macrobusiness Mortgage Slave Index could measure number of years taken to pay off a house… median house price divided by median wage. Announce it as a news release each quarter like the other index compilers do.

    Or the Macrobusiness Auction Clearance Rate, could be total registered auctions 3 days before weekend, divided by number of reported sales 3 days after weekend. Instead of the rubbish stats that ignore withdrawn and unreported (failed) auctions.

    So easy for you guys to calculate and would be an easy PR win and probably get you some mainstream media coverage. You could even calculate back histories relatively easily. Instead of a boring chart citing ABS stats you and the ABC and SMH could be citing the Macrobusiness Mortgage Slave Index.

    • Great idea. Tonnes of aluminium exported per capita. Cars exported per capita – will be zero soon and show what a disaster the ALP and LNP are.

      And this website should demand that there be a $40k/year fee on each 457 visa – labour market “testing” is no safeguard as the firms just lie “we could not find anyone in AUS/NZ to flip burgers at KFC so can we have two hundred 457 visas please?” and Gillard believed that lie…

  10. The threats we face in the future (forgetting the odd asteroid arriving) could be summed up as:

    Water & food shortages through population increase & climate change;
    The activities of one party states (territorial aggression leading to war);
    Globalisation;
    Destabilisation due to terrorism (with an increasing possibility of access to enriched nuclear materials).

    The remedies? Well, you need to look at the drivers of the threats. Unfortunately when you do so you see immediately that the underlying cause is the instincts that enabled us to evolve successfully and survive a few million years on the Serengeti.
    Broadly speaking our drivers are purely selfish. Books like “Human Instinct” (Robert Wilson) & “We are our brains” (Dick Swaab) explain succinctly that we are hard wired are not going to change anytime soon. For example, you can regard the world’s response to the threat of climate change as roughly equivalent to the passengers in the First Class lounge of the Titanic ordering another G & T and commenting on the slight list. Now, the same people would all fight to bail the water out of the boat if it was 10 feet long & leaking. Get the picture? If the threat is not immediate, it’s still a case of ME FIRST! The common man wants an SUV and air conditioning – bugger the long term.
    The religion (ie. group identity) of half the world kills people whose sexual practices follow a sexual identity determined in the womb in the first few weeks (Dick Swaab’s book is a must read on this). Of course, a couple of Aliens from a distant gas planet would be horrified if they witnessed heterosexual sex – Good Lord!! – They do THAT??? Ridiculous.
    No, we are still prisoners of our instincts (me first) and group identities (however inane). So, to translate, the top 1% , be they from the ruling class of a “socialist, people’s etc etc” state or our industrial magnates – the significant drivers of our economy will still occupy the big mansions, drive the big cars and ensure they will stay doing so. Bugger “fairness”, that would ruin the party. It’s Globalisation all the way, or the luxuries associated with the Chairman of the Socialist Revolution, depending on the political flavour of the moment. Members of the UN, by the way, pay no income tax & I doubt if half the people attending these wonderful conferences pay much.
    Of course, we’re still in the pre-catastrophe stage at the moment, so we’ll have to see what comes out of it when we emerge with a much smaller population but with most of our scientific knowledge.
    Sorry to be negative, but “fairness” is, at the current stage of our evolution, a myth.