2019-06-21
Many of the social and environmental issues the Greens seek to tackle lie outside the measurability of gross domestic product (GDP). So what’s the most viable alternative to this problematic measure of a country's progress?
By Gösta Lyngå
Most of the environmental and social problems that we in the Greens work to solve have their basis in an economic system where more emphasis is laid on the gross domestic product (or GDP growth) than on the wellbeing of the people and the planet.
Proposals to use alternatives to measure progress have been made, going back to the Gross National Happiness (GNH) by Bhutan in 1972. Many alternatives to GDP have been analysed by thinktanks around the world, among them the Centre for Bhutan Studies, the OECD and the Australia Institute. It is time to consider a few questions:
- Which alternative to GDP is to be preferred?
- Should the alternative measure replace or complement GDP?
- What can be prioritised by elected government?
- What should be the aims of the Greens?
Which alternative to GDP is preferred?
There is already a well-known index that is being used to compare the quality of life between countries of the world. The Human Development Index (HDI) is published annually by the United Nations Development Program (UNDP). It values education, longevity and economic progress but does not assess environmental data.
The GNH of Bhutan and the Better Life Index (BLI) of OECD are both worthy of consideration. However, it appears that the Genuine Progress Indicator (GPI) has been most widely used. It acknowledges that we live in a society and not just in an economy.
Of its 26 components, some measure positive consumption while others measure negative – or damaging – consumption. It also adjusts for consumption flow according to the income distribution of the population. Read more about GPI in Australia here.
Should the alternative measure replace or complement GDP?
Although GDP was never proposed to be a measure of welfare, it has become the standard value for progress through the years for each country and also for comparisons between countries.
Whatever its negative features, it is not easy to replace it – so the solution in the current situation is to have a complementing measure such as GPI for assessing progress.
We note, however, the recent action by the New Zealand government to have wellbeing considerations for each budget item. Five social issues are considered when each proposal is made. This is an encouraging step on the way to including wellbeing in the budget.
What can be prioritised by elected government?
To get elected, a political party appeals to the wishes of the voters. The mantra ‘jobs and growth’ reflects the need and wish of each person to have a job and it is presumed that this is only achieved when the GDP grows.
Thus, the elected government aims to grow the GDP by whatever means is needed. If growth instead had referred to GPI, a better life for everybody would be achieved.
What should be the aims of the Greens?
Green parties are becoming ever more influential by being part of coalition governments or supporting a minority government so a global consensus about the aims of the Green parties is important. Which measure is preferred and how should it be used? A good opportunity to discuss these matters will be at the next Global Greens Congress, which will be held in 2021, hosted in Seoul by the Green Party Korea.
Gösta Lyngå is a former member of Swedish parliament and a founding member of the ACT Greens. He has been a member of the Australian Greens for more than 25 years.
If you would like to join the email discussion list ’Alt-GDP‘, contact Mark Quinn at the National office: mark.quinn@greens.org.au