The global economy must undergo a radical transformation to prevent planetary disaster, according to the UN secretary general, António Guterres. In a recent interview with the Guardian, Guterres emphasized the need to shift away from the current economic model that rewards pollution and waste. He argues that humanity's future depends on overhauling the world's 'existing accounting systems', which are driving the planet to the brink of disaster.
The issue lies in the prioritization of growth, measured by Gross Domestic Product (GDP), as the primary economic goal for decades. Critics argue that this endless pursuit of growth on a finite planet is exacerbating the climate and nature crisis, as well as increasing inequality. Guterres highlights the absurdity of this system, stating, 'When we destroy a forest, we are creating GDP. When we overfish, we are creating GDP.'
The UN has taken action by hosting a conference in Geneva titled 'Beyond GDP', bringing together renowned economists to devise a new economic success dashboard. This initiative aims to measure what truly matters to people and their communities, moving beyond the limitations of GDP. The report published by the group emphasizes the urgency of economic transformation, citing the 2008 financial crash and the Covid-19 pandemic as examples of global shocks that have been exacerbated by the 'triple planetary crisis' of climate change, biodiversity loss, and pollution.
The UN group, co-chaired by Prof. Kaushik Basu and Prof. Nora Lustig, highlights the disregard for the well-being of ordinary citizens and sustainability in the current GDP-centric model. Basu warns that the focus on GDP metrics can lead to hyper-nationalism, inequality, and polarization. Lustig adds that GDP was never intended to measure human progress but remains the dominant benchmark of success.
The UN's initiative follows a report warning that current economic models are flawed and could crash the global economy due to their failure to account for climate shocks. This growing debate in academia, civil society, and policy circles explores alternative economic structures that prioritize equality and sustainability. These include post-growth initiatives like doughnut economics, well-being economics, and steady-state economics, as well as the degrowth movement, which advocates for a planned reduction in damaging production in richer countries, focusing instead on socially beneficial sectors such as care, renewable energy, and public transit.
Political economist Jason Hickel supports the shift beyond GDP but emphasizes the need for a deeper system change, including democratizing control over production. He argues that the dominance of GDP is a result of its alignment with the interests of capital, and ultimately, the structure of capitalism must be addressed to create a more sustainable and equitable future.
