Is how we measure our global and national economy impacting us on a local level?
During the library’s “Great Decisions” discussion series earlier in the year, the issue of how national economic activity (including trade) is measured came up on several occasions. In particular, the measure of Gross Domestic Product (GDP) and other economic statistics came under scrutiny. Whether these statistics, which have been widely used for many years, are still relevant, let alone useful seemed increasingly in question.
Since then, this topic has reappeared on my intellectual horizons regularly, oftentimes from a diverse range of sources, questioning the health of our global economic system and the impact it is having on societies around the world, including our own.
So what follows is a “link pack” of resources that include articles, websites, books, online courses and other items that might help you to explore these issues and come to your own conclusions. I’d love to hear what you think and to learn about more resources, so please do leave me comment or send me an email.
Do you think GDP is an outdated tool? Do we need to develop alternative tools that acknowledge a broader set of outcomes? What actions are you willing to take to learn more about GDP? Would you like research assistance from a Portsmouth librarian?
Is Gross Domestic Product (GDP) still a useful statistic?
“The Hunt Is On for a New Way to Measure the World’s Economies” Bloomberg.com, August 21, 2016
The measure has risen from humble beginnings during the Great Depression to be an essential gauge for governments and central banks the world over…Problem is — whether compiled by production, income or expenditure approaches — GDP is increasingly struggling to keep up with the pace of economic change.
“GDP: An Imperfect Measure of Progress” Bloomberg View, Editorial Board, January 30, 2013
As useful as GDP is, it has some crucial flaws. It can obscure growing inequality and encourage the depletion of resources. It can’t differentiate between spending on good things (education) and terrible things (cigarettes). It doesn’t measure the economic services that nature provides, such as the dwindling wetlands that once protected New Orleans from storms, or those that don’t come with a market price, such as raising children. It fails to account for the value of social cohesion, education, health, leisure, a clean environment — in other words, as Robert Kennedy once put it, GDP measures everything “except that which makes life worthwhile.”
“GDP Is a Wildly Flawed Measure for the Digital Age” Harvard Business Review, July 2016
“GDP Is, Like, Totally Overrated” Wall Street Journal, August 12, 2013
What are some potential alternatives to GDP?
“How and Why We are Moving Beyond GDP as a Measure of Human Progress” (The Conversation, January 3, 2017)
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.”
“Five Measures of Growth that are Better than GDP” (World Economic Forum, April 19, 2016)
“Genuine Progress Indicator” (Redefining Progress website)
A few books that look interesting to me, many of which I have ordered for the library
- Gross Domestic Problem: The Politics Behind the World’s Most Powerful Number by Lorenzo Fioramonti (2013)
- The Little Big Number: How GDP Came to Rule the World and What to Do About It by Dirk Philipsen (2015)
- Theory U: Leading from the Future as it Emerges, 2nd Edition, by Otto Scharmer (2016)
- Leading from the Emerging Future: From Ego-System to Eco-System Economics, by Otto Scharmer (2013)
- This Changes Everything : Capitalism vs. The Climate by Naomi Klein (2014)
- Confronting Capitalism: Real Solutions for a Troubled Economic System by Philip Kotler (2015)
Many of these are free to take!
American Capitalism: A History (edX.org)
Examine how economic development fueled the United States’ evolution from 13 backwater colonies to a global power. This is a free online course at edX.org.
Economic Democracy: The Cooperative Alternative (edX.org)
Could a cooperative market economy, in which firms are owned and controlled by their workers, be a viable and efficient alternative to capitalism? This is a free online course at edX.org.
u.lab: Leading From the Emerging Future (edX.org)
An introduction to leading profound social, environmental and personal transformation. This is a free online course at edX.org.
If you really care about the big questions in the economies and societies of the 21st century, such as distributive justice – namely, inequality of income or wealth, and its correlation with economic growth – this course is meant for you. The knowledge you will gain can truly change your outlook on our world.
From the Director’s Pocket is a blog series curated by Steve Butzel, Portsmouth Public Library director, dog lover, Phish (the band) aficionado, nonfiction reader, and natural resource, sustainable energy and international affairs enthusiast. If you have suggestions for something that should be included in a future blog post, email him at email@example.com.