Economics, equality and the environment: Growth is not always good
In an interview with Der Spiegel, economist and globalization critic Noreena Hertz discusses the flaws of judging a country’s success by GDP and brings up other ways to measure economic and material prosperity:
GDP only measures a small part of economic success. Some really important aspects are ignored. Take sustainability, for example. It’s absurd that a country can have high growth rates because it has a lot of polluting industry. The quality of the air, health, progress made by women, child care and social cohesion — these are all important economic factors.
The innovation or robustness of an economy are not reflected in GDP, nor is economic or social equality. Hertz would like a new method of judging economic success that includes justice, equality, environmental protection and population health along with GDP. Real economic health should also be sustainable.
She would also like to see a shift from what she calls ‘Gucci capitalism’, where people simply trusted the market, to cooperative capitalism – capitalism characterized by ‘complexity, diversity and collaboration’.
Former New Zealand Minister for the Environment Simon Upton makes a similar case in an opinion piece entitled ‘Time to make the numbers add up for the sake of the environment’ for the Dominion Post:
GDP is, of course, just one measure and an increasingly questioned one at that. As we contemplate a world with more than nine billion people and increasingly compromised life support systems, it seems likely that other measures will become commensurately important.
Upton expresses concern about the strain the growing global middle class will have on the environment and the Earth’s natural resources, and how New Zealand will need to respond.
These voices join other economic ideas that offer fresher, greener alternatives than those simply based on production and consumption, such as the green economy and the concept of ‘natural capital.’
by Graham Land