We work too hard to produce too much stuff, and we’re destroying the planet in the process. An interview with Gabriela Cabaña, a doctoral student at the London School of Economics.
The problem is that economic growth has become the performance metric. You see the same happen at a smaller scale in companies, where a metric to measure performance ends up being the only target of the employer, instead of the actual task. For example, a call center may have a calls per day bonus, which means that most employees will be penalized for longer calls, leading them to be more pushy and cut corners, leading to customer dissatisfaction with their experience.
In order to encourage degrowth the metric has to change. It is clear that GDP is no longer a sufficient measure, because it considers neither sustainability nor equality. But without an alternative measurement to replace it economists will reject degrowth as a successful strategy because they can’t see past the performance metrics they have accepted as a de facto standard.
Metrics is one problem. However UBI solves another very real problem. When you shrink GDP, you reduce the material wealth available of the group. UBI makes sure everybody has a certain minimal standard of material wellbeing, so cutting GDP does not hurt the poor, but only the rich. This is one of the differences between degrowing an economy and a recession.
Oh yeah, I’m not against UBI, with or without degrowth.
Now, the way I see it, the article starts with explaining why degrowth is necessary (sustainability), then focuses on what’s necessary to make degrowth practical (UBI). But degrowth as policy is only viable if we can measure its success, and GDP is not going to do that. So we need a new performance metric IMO, something like economic equilibrium (see what I did there?).
I disagree that we should try to replace GDP with one metric. The world is too complicated for that. What we should do instead is look at multiple metrics and have targets for each of those metrics. Doughnut economics is a pretty decent framework for that. It uses consumption limits in form of cliamte change, chemical pollution, biodiversity, land use, water consumption and so forth on one hand and on the other site targets like food security, life expectancy, equality(GINI, but also race and gender), energy, water access and so forth. This is much better as it can be much more easily adapted to changing dangers and the situation. Water is for example much less of a problem for a country like Norway, then for say Iraq. So they would focus on different metrics.
I didn’t mean to imply that GDP should be replaced with another single metric, and I totally agree that doing so just perpetuates the cycle. Instead, my argument is that GDP should no longer be used as a metric of success, because its use has been bastardized. When “the economy” is doing better because more transactions are being made while class inequality is worsening and standards of living are dropping, then the measurement used is flawed.
There’s heaps, CO2, ecological health, happiness, life satisfaction, health, wealth equality just off the top of my head. Makes sense to use some combined and probably iterated (perhaps (direct) democratically) metric, one of the reasons we’re in this mess is oversimplification to just money as a metric.
The problem is that economic growth has become the performance metric. You see the same happen at a smaller scale in companies, where a metric to measure performance ends up being the only target of the employer, instead of the actual task. For example, a call center may have a calls per day bonus, which means that most employees will be penalized for longer calls, leading them to be more pushy and cut corners, leading to customer dissatisfaction with their experience.
In order to encourage degrowth the metric has to change. It is clear that GDP is no longer a sufficient measure, because it considers neither sustainability nor equality. But without an alternative measurement to replace it economists will reject degrowth as a successful strategy because they can’t see past the performance metrics they have accepted as a de facto standard.
Metrics is one problem. However UBI solves another very real problem. When you shrink GDP, you reduce the material wealth available of the group. UBI makes sure everybody has a certain minimal standard of material wellbeing, so cutting GDP does not hurt the poor, but only the rich. This is one of the differences between degrowing an economy and a recession.
Oh yeah, I’m not against UBI, with or without degrowth.
Now, the way I see it, the article starts with explaining why degrowth is necessary (sustainability), then focuses on what’s necessary to make degrowth practical (UBI). But degrowth as policy is only viable if we can measure its success, and GDP is not going to do that. So we need a new performance metric IMO, something like economic equilibrium (see what I did there?).
I disagree that we should try to replace GDP with one metric. The world is too complicated for that. What we should do instead is look at multiple metrics and have targets for each of those metrics. Doughnut economics is a pretty decent framework for that. It uses consumption limits in form of cliamte change, chemical pollution, biodiversity, land use, water consumption and so forth on one hand and on the other site targets like food security, life expectancy, equality(GINI, but also race and gender), energy, water access and so forth. This is much better as it can be much more easily adapted to changing dangers and the situation. Water is for example much less of a problem for a country like Norway, then for say Iraq. So they would focus on different metrics.
I didn’t mean to imply that GDP should be replaced with another single metric, and I totally agree that doing so just perpetuates the cycle. Instead, my argument is that GDP should no longer be used as a metric of success, because its use has been bastardized. When “the economy” is doing better because more transactions are being made while class inequality is worsening and standards of living are dropping, then the measurement used is flawed.
There’s heaps, CO2, ecological health, happiness, life satisfaction, health, wealth equality just off the top of my head. Makes sense to use some combined and probably iterated (perhaps (direct) democratically) metric, one of the reasons we’re in this mess is oversimplification to just money as a metric.
Yes, that’s exactly what I mean!