WHY GPI?
“BEAUTY WILL SAVE THE WORLD”
- Fyodor Dostoevsky
Abolish
GDP
The underlying reason we are living through climate and cost-of-living crises is the pursuit of infinite economic growth. In this pursuit, we are focused on measuring a metric called Gross Domestic Product or “GDP”.
As Robert F Kennedy said in 1968, GDP “measures everything in short, except that which makes life worthwhile.”
Essentially, it's a measurement of all the economic activity in a country during a given period, calculated by adding up the total value of all the goods and services sold.
Since it was established by the US Department of Commerce in the 1940s, almost every country in the world has been trying to grow their GDP. The problem is GDP doesn't measure what's been lost, only what's created.
For example, a natural disaster that “costs” billions of dollars actually increases GDP. Imagine your house gets destroyed by a hurricane, and you rebuild.You're now deeper in debt, but hey, at least GDP is growing, right?
We need to abolish GDP and start measuring the things we actually value.
Adopt
Genuine Progress Indicator (GPI)
The good news is there are BETTER ways to measure an economy...
Genuine Progress Indicator (GPI) is a metric that has been suggested to replace GDP as a measure of economic well-being. It was designed to answer two fundamental questions about economic activity:
What portion of economic activity is improving quality of life, or in other words, related to true economic well-being?
What portion of that activity is sustainable over the long term?
Exclusion of all non-economic benefits and costs or “externalities”
Poor linkages between consumption and quality of life
Failure to account for defensive spending that does not improve quality of life
Failure to account for sustainability
Failure to be responsive to inequality
It addresses five key shortcomings of GDP:
As such, GPI is designed to be an indicator of sustainable economic well-being.
GPI accounts and applications have been completed in 17 countries that account for 53 percent of the world’s population and 59 percent of gross world product (as of 2018).
At the sub-national level, applications are proliferating. In the United States, two states (Maryland and Vermont) have officially adopted the metric, and universities and non- governmental organizations in 18 other states are working to develop similar programs.