Will’s Crux:
Nature, life, many economic analyses believe the pursuit of GDP drives improvements across society; but, at scale, humanity loses so much resiliency. We need to recognize this window and create balance in other areas that humans value (/homeostatic systems).
- Degrowth is a poor or hard way to frame needed changes to growth (especially when growth has such positive perceptions built-in)
- much better is giving Donella Meadows’ comment,
- then noting that not acknowledging mismatches (1, we must acknowledge complex dynamics, 2, we do not value nature, and therefore are incentivized to destroy that natural capital — it’s already degrowth)
- and ofc giving the recognition it’s complex because we rely on generator functions/global competition
Useful Reading
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2min discussion from Nate Hagan on the energy results of a focus on GDP (and questioning whether that’s the reality we want to lock ourselves into — or think we are facing)
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Measuring the Wellbeing Economy: How to Go Beyond-GDP
- The author deeply understands the space (he has focused around GDP for over a decade with the UN, OECD, and World Bank) and he quite neutrally condenses the 20 year movement into this 11 page summary. It provides a comprehensive overview of the history of GDP movement, the state of proposals to-date, and challenges facing them.
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^This report’s appendix:
Notes from the Beyond GDP Report:
- “It is important to look at the history of GDP. It is hard to imagine, but GDP was not always as dominant as it is today. GDP’s “rags-to-riches” story offers many insights into how an alternative might be created.”
- Many other actions are required to create a lasting economic system. Nevertheless, metrics are a crucial piece of the puzzle because they are the link to government policies and social narratives.
- The system reinforces itself: There is, therefore, a vast global infrastructure that is constantly churning out economic data and policy advice based on and reinforces GDP as the default way to define progress. The constant barrage of economic data and model results have had a profound effect on public discourse. The term “economic growth” was rarely used before WW2. Now, the term has become so common and well-known amongst citizens that it is often simply referred to as “growth”, without the need for “economic” to precede it.
- psychologically/conditioning too: it’s always associated with adjectives like dynamic and surging.
- The paper discusses the Global Progress Indicator which shows that net-progress has stalled over 3 decades due to the subtractions in environmental damages and increasing disparity.
- All credible alternatives seem to require a dashboard or harmonization of multiple variables — like we see in nature/regenerative principles, one number is insufficient for a complex economy.
- Since its inception, there has been criticism of GDP.
- Simon Kuznets, one of the founding fathers of GDP said in 1934, “The welfare of a nation can scarcely be inferred from a measure of national income”. Even politicians have long been aware of the shortcomings of GDP.
- Robert F. Kennedy famously said in 1968 that GDP “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.”
- GDP is still better than all alternatives in three ways:
- Harmonisation — globally, there are clear meanings and standards for GDP measurement
- Policy Tools. When policymakers ask macro-economists to support their decision-making, they provide a variety of policy tools such as projections and other economic models.
- creating these is a critical job of the beyond gdp “movement”
- Social narratives — growth is good, and gdp growth is the key role of governments became the dominant belief system ‣
The article breaks down the entire state of play, and summarizes the progress and challenges for all alternative GDP metrics.
Notes on De-Growth
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💡 Duke climate researcher and former Aera VC Analyst, Will Reynolds, collates these notes spaces or sub-industry insights on a variety of critical places for impact within climate innovation.
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