GDP grew by an annualized rate of 2.5% in Q4 2014, according to Trading Economics. This represents strong growth compared to other countries and relative to the previous years since the Great Recession. America is back, baby! Right? Let’s look a little deeper.
As many people, have pointed out – including The Progress Report – the Gross Domestic Product metric has more than a couple flaws. First off, it was created during World War II simply to measure wartime production. GDP includes many items that could be seen as ‘double-counting’ or showing a positive number for a negative event (Hurricane Katrina disaster relief). And it doesn’t include many pieces of the ‘real’ economy which are not monetized trades (family daycare or self-performed construction).
Questioning GDP as a measure of success is not a new conversation – in 2006 The Economist wrote this piece, based on an Office for Economic Cooperation and Development report, stating “a nation’s well-being depends on many factors ignored by GDP, such as leisure time, income inequality and the quality of the environment… It was never intended to be the definitive yardstick of economic welfare.” The OECD suggests that a Leisure-adjusted GDP (one that takes into account productivity per hour worked) would be more representative. Using this measure significantly narrows the gap between America and many European countries.
The OECD does point out that GDP is a useful measure mainly because it is based on data that can be easily collected from all countries. So we are using the metric because it’s the best available. Which was a good excuse in 2001, but not in 2015. Certainly in Western economies, who perform quarterly tax audits and census surveys at least every decade, the information we need to get a clearer picture of success is available. Even in developing countries, data is more available than a couple years ago, and that will improve.
The opportunity to change this paradigm is real. And it’s real right now.
Information has never been more available, communication friction is at an all time low, and conversations regarding economic equality and affordability abound. Now is the time for an interested party to push for change in how we measure success in America. So what needs to happen?
- Define the new metrics of success – which is much harder than it sounds (and it sounds hard!). Should this be as simple as GDP per head as OECD suggests? Or do we go as far as the Genuine Progress Indicator? I personally believe that utilizing a system measuring citizens’ success based on Maslow’s Heirarchy of Needs would be more indicative of true success. Regardless, this dialogue on it’s own holds value in our society.
- Find the Funding – will it be a political party, a wealthy consortium of individuals, a collective of ordinary citizens, or some other organization that funds this campaign? Elected politicians are not motivated by our system to implement dramatic change, so who will be the catalyst?
- Educate and engage the voters. This will be a movement from the bottom up. Ordinary people must understand the metrics, implications, and the result of a new paradigm. Ordinary citizens must come together to support change, even demand change. Use grassroots tactics, use social media, use word of mouth.
This is more than a nudge, this is turning an oil tanker. Education and awareness are the keys, funding is required, and a leader is required. Who will step up to the plate and ensure America is focused on what really matters?