It’s time to drop the GDP

The GDP is the Gross Domestic Product.

In essence, GDP is a measure that encapsulates the total value of all goods and services produced within a country's borders over a specific period. Its widespread use in gauging a country's economic performance underscores its importance in economic analysis, empowering you with a deeper understanding of a nation's economic health.

It was developed by economist Simon Kuznets in the 1930s and adopted by the US Congress during the Great Depression as a measure of recovery.

After World War 2, it became an international standard. It helps compare economic activity between countries.

Because of this focus, we have missed other important factors beyond the financial goals and this constant growth discourse.

We have a system that focuses on GDP growth at all costs.

• Manufacturing poor-quality food contributes to the GDP.

• Unhealthy food that leads to disease contributes to the GDP.

• Buying medicine contributes to the GDP.

The system incentivises unsustainable practices that harm the people and the environment. The GDP does not measure externalities. It does not consider environmental health, social welfare, and inequality. It doesn't account for non-market transactions that add value to society, such as volunteer work and household labour.

We forgot the human factor; we forgot environmental sustainability. We forgot happiness and well-being.

This planet is facing many, many challenges.

• Climate change.

• Increased inequalities.

• High levels of anxiety and depression are on the rise.

And these are just some of the challenges.

The GDP is not an immutable rule. It was set in the past because of a context, we live in a very different context and environment today, we need new rules and we can drop systems that no longer serve us.

We could move to the Gross National Happiness (GNH) index, just like Bhutan did a few years ago.

GNH is measured using a wide range of indicators grouped into nine domains:

• Psychological Well-being

• Health

• Education

• Time Use

• Cultural Diversity and Resilience

• Good Governance

• Community Vitality

• Ecological Diversity and Resilience

• Living Standards

We need a model. We need to care for people and the planet. For decades, I have advocated for the triple bottom line (people, planet, profit or prosperity).

The GNH is suited to our time and context. If we care for each other, we’ll care again for the planet.

It is suited for the challenges we have ahead of us.

Let’s drop the GDP, it’s about time.

PS: large corporations escape taxes up to 600 Billion a year, according to the International Monetary Fund (IMF), this has a direct impact on inequality and GDP in most countries.