Critiques of gross domestic product (GDP) as a measure of success or welfare are as old as GDP itself. And yet, almost a century later, GDP, and the economic growth it measures, still seem to define societal progress and remain the focus of our attention. For example, according to the Nexis Uni database, GDP was in the first three months of 2023 mentioned in 34,603 newspaper articles (in English). In comparison, the unemployment rate was mentioned in 9,187 articles, CO2 emissions 3,615 times and the Human Development Index only 253 times. The pattern is even more extreme when looking at Google Trends, which tracks web searches. Google rates interest in GDP over the last year with a value of 67 (in the news category), compared to 2 for unemployment and only 1 for life expectancy and inequality.
My assessment of the situation is that GDP will remain dominant unless a clear and small set of alternative indicators emerges. Back in 2015, I was part of the team that proposed, for the UK, five headline indicators of success – consumption-based CO2 emissions, inequality, life satisfaction, preventable deaths and the percentage with good jobs. The number five was important. Our logic was that trying to replace GDP with a single indicator was futile given the multi-dimensionality and complexity of what societies need to living achieve, but that a large number of indicators makes it hard to grasp the overall picture or create a clear narrative of what our society is striving for. At the end of the day, governments will measure lots of things – what’s at stake is not measurement but the narrative of what constitutes a successful society.
Unfortunately, to date, official initiatives that claim to go ‘beyond GDP’ have ignored this perspective. Pioneers like New Zealand and Scotland have produced large dashboards of ‘living standards’ or performance indicators. Whilst these initiatives are significant steps forward and provide rich information for policymakers and technical experts, they have yet to transform politics in the way that Beyond GDP advocates would like to see. As the political scientists Anders Hayden and Clay DaSilva recently noted, pursuing economic growth is still seen as central to policy in even the most progressive of supposedly beyond-GDP nations.
But things are slowly changing. The last few months have seen the publication of a couple of important reports by two fundamental international organisations – the European Commission and the UN. Both have recognised the need for a smaller set of Beyond GDP indicators. And there are no less than three large-scale European projects currently getting off the ground to move beyond a GDP focussed economy. Perhaps 2023 will be remembered as the year we started moving beyond GDP?
Back in August 2022, the UN High-level Committee on Programmes, which is responsible for coordination between the different components of the UN system, issued a report entitled “Valuing what counts” which argued for the development of a small dashboard of 10 to 20 indicators to measure progress on three dimensions: wellbeing, sustainability and inequality. The report acknowledged the impotence of larger-scale dashboards to shift the narrative away from a focus on GDP and called for a set of indicators to be agreed upon at the UN Summit of the Future in September 2024. Indeed, measuring progress ‘more effectively’ will be one of 11 focus areas at this major meeting.
Even more promising is a paper published in February by the European Commission Directorate-General for Research & Innovation entitled Developing alternative visions for assessing progress to sustainable development ‘Beyond GDP’. The paper also explicitly acknowledges that current Beyond GDP initiatives do not drive policy decisions in the same way that GDP does, and that a smaller number of indicators would help. Although they ultimately call or a public process to choose those indicators, they present an example set of five indicators including CO2 emissions, at-work poverty, life satisfaction, air quality and GDP per capita. Next month’s Beyond Growth conference, held at the European Parliament, will provide an opportunity to see how seriously European actors are willing to take these recommendations.
Indeed, this conference – which is organised by a coalition of actors including official bodies such as the European Economic and Social Committee and the European Trade Union Institute, alongside more radical ones such as the Degrowth network and the New Economics Foundation – demonstrates that there is widespread appetite to move not only beyond GDP as a measure of progress, but also beyond growth as a societal goal. And the European Commission is investing in the idea: just this year, three major research projects with a combined budget of €15 million are starting, that all explore the possibilities for post-growth economies (REAL, ToBe and WISE Horizons).
If we can work on the indicators to measure it, the policies to achieve it and the political coalition to support it, a positive post-growth future, allowing people to thrive within environmental limits, may be in sight.
