changing what we measure to change what we do
Why GDP is an inappropriate measure of well-being? For the main following fallacies:
- No distinction between welfare enhancing activities and welfare reducing ones (for example: natural disasters, crimes, diseases and accidents will all increase GDP).
- Only focuses on material output instead of increases in quality of life.
- Only works within the market logic. Non-monetary transactions (like volunteer work) are very often left out.
- No detection of the distribution of income among individuals or social well-being, people's living conditions or effects of human economic activity on the biosphere.
Why is this battle important?
Going beyond GDP is not an abstract fight. What we measure affects what we do. It defines what we prioritise and what we do not in terms of policy goals. In other words, the choice of indicators used in the policy-making cycle determines the objectives of the regulatory activity shaping public policies accordingly. Under the 'growth dogma', policies are usually designed and judged in terms of their impact on economic growth, i.e. increase in GDP, leaving behind any dimension of well-being or quality of life.
Which policy goals should we follow instead of an increase in GDP?
We aim to challenge the 'growth dogma' by providing new policy objectives based on the idea of sustainability. Sustainability means longevity, of people and of the planet. It embraces a holistic approach, which includes four dimensions: society, environment, economy and governance. In order to follow this new path, our measures of well-being need to change accordingly.
Ok, but how can we concretely apply this change in the EU framework?
We start by changing the European Semester, the system of co-ordination of economic and fiscal policies. Indeed, the Semester has a strict macroeconomic approach lacking both environmental and social dimensions. This is mainly due to the fact that the reference indicators used to analyse the current situation and to design policy recommendations are rigorously economic ones. As a result, the policy outcomes, i.e. structural reforms, present a very limited focus with potential negative social and environmental consequences.
Therefore, the European Semester lacks the required approach and tools to accompany the path towards sustainability.
Changing what we measure in the Semester will change our policy goals and eventually the policy outcomes. Concretely, it means getting rid of narrow-minded structural reforms to embrace transformative reforms to promote sustainability for a truly Progressive European Society.
To achieve this we need your contribution. Sign up here to join us in this fight and let's work for #Europe Together!