GDP’s economic focus is outdated – a new measure should account for unpaid labour, planet health
To address the roots of people’s disenchantment and avoid ecological catastrophe, we must develop new approaches to economic policy.
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Economics and economic policy need a rethink. This is clear from the scale of inequality, joblessness, insecurity and environmental disasters we see in the world.
People feel left behind, impoverished and unvoiced. They are looking to ethno-nationalist strongmen to help them. Right-wing movements and governments are on the rise.
As an economist who has written for many decades about debunking the neoclassical approaches to economic thinking, I think there is clear evidence that the mainstream ideas and policies no longer work.
The dominant approaches to economic policy focus on a few narrow goals, such as growing gross domestic product, or GDP, or suppressing inflation. The use of GDP since the late 1940s to understand the health of an economy has been criticised. What’s needed is a more precise understanding of the broad impact of macroeconomic policies, one that accounts for paid, unpaid and non-market work. The standard economic variables used by mainstream economics don’t consider all these.
Mainstream policies don’t see the huge impact of unpaid care work on GDP. According to the International Labour Organisation an estimated 16.4 billion hours are spent on unpaid care work every day. This is equivalent to 2 billion people working 8 hours a day with no remuneration.
The idea of economic growth is also ill...
