This is based on my quickly sketched down notes on an interview with Enrico Giovannini given at this years Forum Alpbach. Which means, double check all of it, this is filtered through me, and then my lousy note taking. 🙂
GDP was ‘invented’ as an economic indicator at Bretton Woods 1944 following a debate of mainly two economic schools, one of which represented by Simon Kuznets basically lost out. (Kuznets wasnt invited back, starting from day two).
What prevailed was the british solution of going with an indicator based on production. This was important to US interests at the time, because that would favor the capitalist economic model over the communist model moreso than Kuznets approach of having an indicator based on consumption and well being.
For this one source is cited, namely: click
Additional quick sources pulled up via google:
Source 1
Source 2Why is GDP so important? Roughly: Because it is a number ’seen as important’ that is tracked/stated quite frequently. So other indicators, that maybe are renewed once a year get a backseat position to GDP at the policy making stage.
Why may GDP currently be ‘unwanted’ as a measure of development? Mainly: Because it doesnt include environmental action, and because it “registers it as something economically positive, if you buy a computer, but something negative (expense) if you hire a bunch of people” - this is roughly an analogy for, it doesnt represent a large part of economic activity that is projected to grow in the future - namely the service sector.
Why is GDP so hard to get rid of? Because it has a ‘good’ ‘enough’ correlation to job creation. So in times of economic crisis, everyone is prioritizing getting GDP up again so more jobs are created. There were efforts in the past, but they all kind of petered out as soon as the next economic crisis came along.
And now for the technocratic vision of future government (we are still talking about Enrico Giovannini mind you.. 😉 ). So here is what you do. 🙂
You DONT create one replacement number like Gross National Happiness, because that one especially only reflects on ‘current perceived state’ and is useless when it comes down to policy planning or projecting.
You can invent a whole list of economic indicators, normalize them, make sure that they are connected in a “communicating vessels” fashion (where one of them can snuff out changes in another one, if its impact is bigger). Issue: That might snuff out certain indicators that might be important from a different vantage point. So you dont just create the one single number indicator model - you create several ones of those (several groups of indicators (still following the communicating vessels concept within a group).
Next, indicators alone are not enough. You need models that say what will happen, when you input indicator values. This is where you look at science to deliver, respectively - or to look at it the other way around, to get science integrated into the system as well - because don’t forget, we are sketching out the creation of an alternative to the Bretton Woods system here.
And then you make sure you implement it in a way that dictates to future governments in a country - not necessarily ‘what to do’ but what indicator values to reach. You do that by drawing up policy that requires them to run their economic and social plans against your indicators and models - with a required outcome, before they are ‘allowed’ to govern.
So once scientists are happy and you created the new governance dogma, whats left?
At that point you come to the striking conclusion, that you cant model social systems. Or at least that social systems are very hard to model - which you still try (see: click ) with the quote from the interview that summarizes all this being “we cant predict revolutions”. But you can still try - which is basically where PR should come in. (Make sure people are engaged in NGO activities give them ‘ownership’ over issues, …)
Part of this was already integrated in italy (government has to adhere to indicators of economical and ecological wellbeing) on a national level (technocratic experiment 😉 ), part of it Giovannini sees coming into action with this EU government making it mandatory to report adherence to indicators found in the SDGs (sustainable development goals), so revising the strategy for mandatory non financial reporting. This follows less of a (strict) conceptual model, but should produce similar results. (Sorry for being so vague here, my notes got thin… 😉 ).
Those ideas still dont have a political majority (not the dominating view) - so, is that a dealbreaker?
No, because large financial funds and private funds have decided to use indicators of sustainability to asses longterm viability of companies (their long term capacities) and this produces internal pressures within the capitalist system.
Blackrock for example (so Giovannini) has recently published a list of companies where they are on the board and where they voted against bonuses for managers who ‘hadn’t done enough for sustainability’.
On implementation the major problems the initiatives are facing are political - so what does Giovannini propose? First, produce political movements with the aim to drive notions of ’sustainability’ into countries constitutions. (So whenever you hear this, this is more than naive babble. This is seen as an avenue to stop the profit maximization mantra in small and medium enterprises.) Second, force more discussions about several of those indicators (economic inequality, health, crime, inequality between genders, …) at the public level. Then follow up with an implementation like with mandatory reporting on SDGs on the EU level.
First you can do this on the national level, but all future frameworks are aiming for a shared view internationally. (In my notes I’ve noted down OECD 2011 better life index, life initiative, next to it but I havent looked that up yet). Anecdotally Giovannini states, that there are encouraging results on meta studies on several of those indicators, that they arent ‘culturally driven’ - so that you could basically make that work for a large group of people, following the same model.
To make that work you need to invest in the development of ’statistical means’ in a large number of countries, but apparently this is already part of the 2030 SDGs agenda.
Also, so Giovannini, it is very encouraging, that you can gather much of the data needed for indicators through ‘crowd sourcing models’, which are cheap, and hey - you have a form of public participation attached to it as well.
This should be it, sidenotes I have left are:
To look up: Alan Kruger, Obamas GDP speech, the 2009 Stigliz report (to what institution if havent noted down).
That a live model of several complex indicators in action can be found somewhere on a ASVIS/Gruppo API website.
Istanbul world forum (individual visions) [whatever that means.. 😉 ]
The report on sustainable equality for the social democrate fraction/group in the EP (european parliament)
And to look up the Sustainable Solution(s) networkEnd of info dump. 😉
Today:
Emmanuel Macron wants climate goals in French constitution
A referendum could force a change in the French constitution to add pledges to combat climate change. President Macron has come under fire for a perceived lack of effort to protect the environment.
src: click
Like a single organism. Whats a constitution here and there…
edit: Equivalent for Austria (german): click
