Draft GPUS Platform Amendment Measuring Economic Progress

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SECTION TITLE: MEASURING ECONOMIC PROGRESS

SECTION SUBTITLE: Improving the measure of our economy

OUR POSITION: Our current principal measure of economic heath -- the gross domestic product -- is fatally flawed and must be replaced.

Mainstream economics is premised on the notion that as Gross Domestic Product (GDP) increase, society becomes richer and better.

Greens don’t accept that ‘more’ necessarily means ‘better’. We know that unlimited growth is not possible on a finite planet. GDP is a proficient measurement of magnitude of the economy, but it does not take into account some of the negative effects of economic activity, like pollution. Instead it counts ‘goods’ and ‘bads’ equally, sending distorted and misleading signals.

Social and environmental ills like oil spills, the dumping of toxic waste, automobile crashes, divorce, obesity, stress and misery all increase GDP, because they impel the purchase of more goods and services. Yet they are indicators of a lesser, not higher quality of life.

GDP also not give a sense of how equitably distributed a country’s wealth is; a country could theoretically have both the world’s highest GDP and the world’s highest poverty rate simultaneously. At the same time, GDP fails to account for the value of leisure time, or parts of the “informal economy” like parents’ unpaid care for their own children that have value but not necessarily measurable in the market. Nor does it reflect the depletion of scare natural resources nor the deterioration of ecosystems.

We must set our nation on the right economic and environmental track. That means we will need new indicators to gauge our progress.

GREEN SOLUTIONS

1. End the use of the Gross Domestic Product as the principal measure of the heath of the U.S. economy.

2. Create a broader measure of economic progress that takes into account our quality of life, and indicators of social, economic and environmental health, as well as the value of non-monetary goods and services.



2004 PLATFORM ON MEASURING ECONOMIC PROGRESS

Economic growth has been a primary goal of American policy. Corporations, politicians beholden to corporations, and economists funded by corporations advocate a theory of unlimited economic growth stemming from technological progress. Based upon established principles of the physical and biological sciences, however, there is a limit to economic growth.

American economic growth is having negative effects on the long-term ecological and economic welfare of the United States and the world. There is a fundamental conflict between economic growth and ecological health (for example, biodiversity conservation, clean air and water, atmospheric stability).

We cannot rely on technological progress to solve ecological and long-term economic problems. Rather, we should endeavor to make lifestyle choices that reinforce a general equilibrium of humans with nature. This requires consciously choosing to foster environmentally sound technologies, whether they are newer or older technologies, rather than technologies conducive to conspicuous consumption and waste.

1. Economic growth, as gauged by increasing Gross Domestic Product (GDP), is a dangerous and anachronistic American goal. The most viable and sustainable alternative is a steady-state economy. A steady-state economy has a stable or mildly fluctuating product of population and per capita consumption, and is generally indicated by stable or mildly fluctuating GDP. The steady-state economy has become a more appropriate goal than economic growth in the United States and other large, wealthy economies. A steady-state economy precludes ever-expanding production and consumption of goods and services. However, a steady-state economy does not preclude economic development – a qualitative process not gauged by GDP growth and other measures that overlook ecological effects.

2. One way to measure the economy is to assess the value of non-monetary goods and services and measure the rate of infant mortality, life expectancy of people, educational opportunities offered by the state, family stability, environmental data, and health care for all people. Another measure is to quantify human benefit (in terms of education, health care, elder care, etc.) provided by each unit of output. Measuring the gap between the most fortunate and the least fortunate in our society, for example, tells us how well or poorly we are doing in creating an economy that does not benefit some at the expense of others.

3. For many nations with widespread poverty, increasing per capita consumption (through economic growth or through more equitable distributions of wealth) remains an appropriate goal. Ultimately, however, the global ecosystem will not be able to support further economic growth. Therefore, an equitable distribution of wealth among nations is required to maintain a global steady-state economy. A global economy with inequitable wealth distribution will be subject to continual international strife and conflict. Such strife and conflict, in turn, ensures the economic unsustainability of some nations and threatens the economic sustainability of all.