In How to Build an Economy for the 99%, Wendy Keats recommends five key strategies based on two important criteria: 1) they have been tried-and-proven, more than once, to help build more inclusive, sustainable economies; and 2) they can’t cost taxpayers one more cent than we pay now.

The first (and perhaps least sexy) strategy may actually be the most important as it lays the foundation for everything else.

Replace the tired old GDP with economic indicators and measures that include people and the planet

Before embarking on any kind of real change, we must be clear on where we want to go and how we will measure our progress. Canada, like most countries around the world, uses the Gross Domestic Product (GDP) to measure our nation’s economic success and, by extension, our well-being.

The GDP is simply the sum total of all the finished goods and services produced in Canada each year. These figures are compared from one period to another and used to determine how much our country can borrow and at what rate. Governments, investors and corporations use the GDP to make projections and decisions about where to put their resources moving forward.

Invented during the manufacturing age as a means of fighting the Depression, the GDP has long been criticized for failing to take into account key indicators such as poverty, inequality, education, health and wellness, job security, carbon emissions, environmental damage, and basically anything else related to our quality of life or the sustainability of our natural resources and communities. 

Instead, the GDP actually includes activities detrimental to society like deforestation, strip mining, over-fishing and so on. Even wars, natural disasters, and global viruses can be a boom to the GDP as a result of the associated increase in government spending.

Few disagree that the GDP has long since passed its overdue date and if we truly want a different kind of economy, we need a new framework for defining and measuring success.

A few years ago, the World Economic Forum developed the Inclusive Development Index (IDI) based on the common-sense notion that most people evaluate their country’s progress, not by the amount of goods and services produced, but on their quality of life and standard of living.

Based on three pillars - growth and development, inclusion, and intergenerational equity and sustainability - it includes twelve indicators such as poverty, health, well-being, and the natural environment. The IDI has been used to assess 103 countries’ economic performance, including Canada (ranked 17th) and gives us a very different picture of our economy than the GDP alone.

Another model used to measure a country or region’s success is called the Genuine Progress Indicator (GPI) and is based on a set of 22 social, economic and environmental indicators.

Here in the Maritimes, GPI Atlantic has been developing and testing this model since the early 1990s and has hosted high-level meetings at the United Nations with 800 government, academic, religious, and civil society leaders to launch a new development paradigm. In 2005, Nova Scotia hosted the Second International Conference on Gross National Happiness with 450 leading delegates from 33 countries. 

 To build an economy that works for all people and the planet, the first thing we need is a new definition of progress and a set of indicators that include quality of life, standards of living and working, and the health and well-being of our people and natural resources.  Instruments like the Inclusive Development Index and the Genuine Progress Index already exist and simply need to be adopted.