In a bold statement, António Guterres, the Secretary-General of the United Nations, has urged the global community to abandon the outdated reliance on Gross Domestic Product (GDP) as the principal indicator of economic and societal health. Speaking in the wake of a high-profile meeting with leading economists, Guterres emphasised that the current accounting systems are not only failing to reflect the true value of the environment but are also propelling humanity towards ecological catastrophe.
A Call for Transformation
During an exclusive interview, Guterres articulated the urgent need for a fundamental shift in how we measure progress. He asserted that economic indicators must account for environmental sustainability and social wellbeing, rather than merely reflecting financial transactions. “We must place true value on the environment and move beyond GDP,” he stated, highlighting the paradox that destructive activities, such as deforestation and overfishing, contribute positively to GDP figures.
For decades, GDP has been heralded as the ultimate measure of success, yet critics are increasingly vocal about its limitations in addressing the finite resources of our planet. The UN chief pointed out that the relentless pursuit of growth has exacerbated the climate crisis and widened social inequalities. “GDP tells us the cost of everything, and the value of nothing,” he remarked, advocating for metrics that truly resonate with the needs of communities.
The UN’s New Initiative
Guterres’s remarks follow the UN’s recent conference in Geneva, aptly named “Beyond GDP.” This gathering brought together eminent economists, including Nobel laureate Joseph Stiglitz and Indian economist Kaushik Basu, to discuss the development of a new framework for measuring economic success. This diverse group has been tasked with creating a new set of indicators that prioritise human wellbeing, sustainability, and equity.
A report from this initiative underscored the growing urgency for economic reform, citing the multiple global crises of the past two decades—from the financial collapse of 2008 to the ongoing fallout from the Covid-19 pandemic. These events, the report argued, have been exacerbated by the intertwined crises of climate change, biodiversity loss, and pollution, all while technological advancements continue to disrupt labour markets and deepen inequality.
Challenging the Status Quo
Basu, who co-chairs the UN group alongside economist Nora Lustig, noted the detrimental effects of the GDP-focused mindset. He stated that nations are so entrenched in competing over GDP growth that the welfare of citizens and the environment is being neglected. Lustig added that GDP was never intended to measure human progress, yet it remains the dominant benchmark.
The initiative does not seek to abolish GDP but rather to complement it with measures that can accurately reflect whether economic development is genuinely enhancing human wellbeing and fostering sustainability for future generations. This approach is gaining momentum amidst a broader discourse on creating economic structures that promote equality and environmental stewardship.
The Rise of Alternative Models
As debates intensify over the inadequacies of current economic paradigms, various schools of thought are emerging. From green Keynesianism to post-growth approaches, there is a growing consensus that a new economic model is necessary. Some advocate for a “degrowth” philosophy, which proposes a deliberate reduction in harmful production practices, particularly in wealthier nations, and reallocates resources towards socially beneficial sectors like renewable energy and public transport.
Political economist Jason Hickel has noted a surge in support for these ideas, citing a recent survey in which 73% of climate policy researchers endorsed post-growth positions. He acknowledges that while Guterres’s call to move beyond GDP is a vital step, it is merely the beginning. “A deeper system change is required,” Hickel argues, emphasising the need for democratic control over production to truly transform what we produce and for whom.
Why it Matters
The push to redefine economic success is not just a theoretical exercise; it holds profound implications for the future of our planet. As we grapple with climate change, social inequality, and the degradation of natural resources, moving beyond GDP could pave the way for a more equitable and sustainable world. By prioritising human wellbeing and environmental health, we can foster a new economic narrative that respects the limits of our planet while enhancing the quality of life for all. The time has come to rethink what progress truly means in the 21st century.
