If we want an economy of the 1%, then GDP is very useful. It tells us all we need to know. But if we want an economy that works for us all, we have to pay attention to what it is not telling us.
In the face of a growing inequality crisis, GDP tells us nothing about the distribution of growth. When just 62 people have the same wealth as half the world’s population, where a country like Zambia can grow rapidly in GDP terms and yet can see increased levels of poverty, and where the 1% own more than everyone else combined, growing GDP simply hides the poverty within.
GDP tells us nothing about the real price we are paying for such growth. Cutting down a forest for timber adds to GDP, but what we don’t record is the loss to our wealth in terms of natural resources. We treat a planet at crisis point as an externality that can be shunted into a future generation. We continue to act as if we had the natural resources of several planets, not one.
And thirdly GDP only values services that we have decided to attach a monetary value to. And by “we” I mean the men who generally decide these things.
GDP excludes care work and other unpaid work, most of which falls to women and girls in rich and in poor countries alike. When we talk about women’s economic empowerment we should be careful that we’re not just giving women more to do. Women already labour, already produce, and already add value. But because this is the caring or reproductive economy it is valueless to current macro-economist thinking. Famously if a man marries his maid, her work becomes no more than her wifely duty, and GDP falls.
These are the features of an economy for the 1%. Such an economy celebrates growth despite it leaving the poorest behind, it pushes us to burn and chop and extract way beyond our planetary boundaries, though the poorest will suffer the most from this; and it ignores much of the work that women do that keeps us all alive and healthy and happy.
I will not be the first to have raised this issue of rethinking economics, but I believe that I am more optimistic than most. I do believe that we are poised now, like never before, to redefine the very nature of what we mean by an economy.
I believe that we can move from a mechanistic, unsustainable, male, economy for the 1%, to a human economy.
The Human Economy for Oxfam is one in which governments act on behalf of the majority, and not in the interests of a tiny but powerful elite. It is one that lives within the boundaries of our planet. It is one in which people are valued equally, and not disregarded on the basis of their gender, colour or caste.
Crucially, it is an economy that can work better for women, and not the other way round. To do so it has to tackle the scourge of economic inequality as well as barriers to women’s participation. The same forces that are creating economic inequality are creating gender inequality too. These inequalities are intertwined and the solutions must be too.
It is not about taking the economy backwards, but evolving it forwards.
Businesses should thrive in a human economy. But we should think about new models that show as much concern for workers, their customers and the communities within which they exist as they do for their shareholders and executive boards.
Technology is a major part of a human economy. It is a great liberator. But too often now it is something to be feared because it will mean job losses for workers and the further accrual of wealth to those who own the machines.
Ultimately, a human economy recognises that economics is only a part of the picture – it is just one aspect of how we want to live together, and politics needs to re-enter the frame.
In retreating in fear from actively regulating and directing the economy to reduce inequality and deliver sustainable, equitable growth, governments are not being neutral, they are letting the powerful take control. Accountable, democratic government is the most powerful equalising force that humanity has ever invented. And nurturing, creative government is a force for cooperation and innovation.
Our political leaders need to nurture a human economy, and they need to protect other things that are just as important as GDP-growth.
This article is part of our Beyond GDP series. You can read more here.