We did not begin measuring our economy until 1946. Simon Kuznets designed the tool for economic measurement. It primarily measured production and profits. But Kuznets warned us even then that the idea that an ever increasing GDP equated to an ever more successful economy was folly! He said “Distinctions must be kept in mind between quantity and quality of growth, between costs and return, between short term and long term. Goals of more growth should specify more growth of what and for what.”
But we didn’t listen and today we are obsessed with increasing the GDP–even when we do it at the expense of social and environmental systems. One of the best explanations I’ve ever seen for understanding how limiting the GDP is was done by Robert Kennedy in 1968. He said:
“Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product … if we should judge America by that – counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.
“Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”
Robert F. Kennedy Address, University of Kansas, Lawrence, Kansas, March 18, 1968
Today, we have the technology to expand beyond the GDP. There have been numerous groups working on how we can include social and environmental measurements as part of our overall economic measurement. We simply need to come together in this country and choose one of these as our new measurement tool. Nothing will be 100% perfect but clearly the GDP is missing two-thirds of the valuable work being done in this country. This makes the GDP only 33% successful!
It is time for a national referendum on this issue.
We could bring together the different groups who have developed measurement tools and ask them to integrate their work and come up with a consensus tool. Once this has been designed, all entities who do economic measurement would shift to using this tool and slowly but surely the GDP will slip away and this new measurement system could become the norm.
From Quantity of Stuff to Quality of Life–an Integrative Economy.
This is what we enable when we shift from GDP to a more whole system measurement. We go from a single bottom line economy to a triple bottom line economy–People, Planet and Profits. It is a win-win solution. The sooner we do it, the better for everyone!