Three reasons to move on from GDP…

…have you heard the words “They increased GDP” within a funeral speech or have you ever seen a headstone with it on?

Its an age old truism that what can be measured gets managed, but we all know that the things that really matter most in our lives can’t be measured. In the Public Sector this management mantra has been adapted to we attempt to manage what we can measure (sometimes called claiming the credit for what would have happened anyway) and in the case of the Public Sector attempting to manage what can be measured has been to the detriment of the citizens and communities it is paid to serve. The Public Sectors constant focus on what can be measured has succeeded in diverting the attention of policy makers and providers alike to fixate on the things that matter least and not the things that matter most. The incessant obsession on increasing the nations GDP is probably the best example of where being able to measure something has caused successive (not successful) governments to miss the point for most of the people they are supposed to serve.

13498_bimini_ship_wreckedThe rising tide lifts all the boats? The rationale for focusing on GDP is that we all somehow benefit, that money and wealth gradually trickles through all parts of society and eventually the rising tide lifts us all … but I think its obvious by now that its not the creation of wealth that is the issue it is the distribution of wealth. Focusing on growing GDP is a bit like creating a huge pile of food on a table without thinking of how people are going to get to it. Its OK to say you’ve grown the pile of food but if most of the people can only see it through the window then its not a whole lot of use. The great theory of the rising tide would work if that small detail of human greed and self-interest didn’t get in the way. I think we can now safely say the theory of the economic rising tide is a busted flush. In a world of limited resources the idea of meeting everyone’s needs through constant growth is not a sustainable solution so it doesn’t take a genius to work out that there must be a limit to growth. Resources are finite and at some stage you will reach the end of your ruler.

This summer the Trussell Trust have found themselves dealing with an increase in the use of food-banks in the UK. I may be naive but this really shocks me. The rising tide has worked for a few, but it has left a lot behind in its wake.

FoodGDP is a blunt and increasingly useless tool for a government that genuinely wants to deliver benefit to the majority of its population.

Here are three reasons why I think we need to stop focusing on GDP…

1 – Trying to focus on growing the GDP of one country in a Global Economy is like trying to control the weather in one garden on the street; its futile and you can’t do it (remember the banking crisis).

2 – GDP is a blunt tool that provides an increasingly meaningless headline measure which means little at the individual level; it takes no account of the relationship between the total of what is produced and the cost of the things we use, average earnings versus house prices or regional and sub-regional variations.

3 – Focusing on GDP is diverting the attention of our policy makers, the pundits and the press to the exclusion of those things that really matter; health, well-being, the quality of our education, our relationships with each other, the strength of our communities and ultimately our own happiness.

Focusing on GDP has allowed successive governments to ride on the back of global growth and dress up failure as success. Do we elect a government to increase our GDP or to create a fairer and more equitable society for us all; its time to acknowledge that these two things are not sides of the same coin.


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