What if one of the biggest blind spots in economics is that it has no serious framework for understanding how chronic insecurity changes human behaviour?
Thanks for this fresh, interesting perspective. This line of thougt seems to be perfectly aligned with my opinion, that GDP needs to be replaced by an indicator that measures the fulfillment of universal human needs (e.g. security) across the whole society and the resource efficiency of those needs being fulfilled. Because in the end this is what matters, not economic activity on its own.
Thanks for the comment. I broadly agree, but I'd frame it a little differently. My concern isn't just that GDP measures economic activity rather than human wellbeing,but that many indicators, including some wellbeing indicators, focus on current outcomes rather than the conditions that make those outcomes sustainable over time.
A society can report high levels of wellbeing, consumption, or even need satisfaction for a period while gradually eroding the ecological, social, institutional, or economic foundations that support them.
For me, the key question isn't whether needs are being met today, but whether the system remains capable of reproducing the conditions necessary to meet those needs in the future. That's why I increasingly think in terms of viability rather than output alone.
Thanks for yor reply Damian, I absolutely agree. That's what I somehow tried to integrate by mentioning the resource efficiency.
If we want to optimize ecological and societal efficiency (low inputs, low unwanted side outputs) of human wellbeing (main output) in long term, I always end up with sufficiency as the most suitable strategy. Without being able to proof it, it just feels right for me...
Do you have an idea how to integrate the "long term viability" into a KPI that could replace GDP?
I've actually drafted a working paper on this topic, although it's still evolving. One of the conclusions I've been moving towards is that the search for a single replacement KPI may be part of the problem.
GDP is useful in some contexts, but it compresses an enormous amount of information into a single number. I think that replacing it with a different single number would risk creating many of the same issues.
The way I look at it is that we need to distinguish between outcomes and viability. A society can score highly on wellbeing, need satisfaction, or even resource efficiency for quite a long time while gradually eroding the ecological, social, institutional, or economic capacities that make those outcomes possible.
The bit that's challenging is that viability probably isn't directly observable. We have to infer it from a range of indicators, in the same way that a doctor infers a patient's health from multiple signs rather than a single measurement.
That's actually one of the ideas I've been exploring in the working paper. Rather than looking for a single replacement for GDP, I've been thinking about how we might account for the capacities that support long-term wellbeing in the first place. The question isn't just whether people are doing well today, but whether we're maintaining the ecological, social, institutional, and economic systems that make wellbeing possible tomorrow.
So, if I were designing a replacement for GDP, I think it would look less like a single KPI and more like an accounting framework that tracks both current wellbeing and the condition of the underlying systems that support it over time.
Thanks for this fresh, interesting perspective. This line of thougt seems to be perfectly aligned with my opinion, that GDP needs to be replaced by an indicator that measures the fulfillment of universal human needs (e.g. security) across the whole society and the resource efficiency of those needs being fulfilled. Because in the end this is what matters, not economic activity on its own.
Thanks for the comment. I broadly agree, but I'd frame it a little differently. My concern isn't just that GDP measures economic activity rather than human wellbeing,but that many indicators, including some wellbeing indicators, focus on current outcomes rather than the conditions that make those outcomes sustainable over time.
A society can report high levels of wellbeing, consumption, or even need satisfaction for a period while gradually eroding the ecological, social, institutional, or economic foundations that support them.
For me, the key question isn't whether needs are being met today, but whether the system remains capable of reproducing the conditions necessary to meet those needs in the future. That's why I increasingly think in terms of viability rather than output alone.
Thanks for yor reply Damian, I absolutely agree. That's what I somehow tried to integrate by mentioning the resource efficiency.
If we want to optimize ecological and societal efficiency (low inputs, low unwanted side outputs) of human wellbeing (main output) in long term, I always end up with sufficiency as the most suitable strategy. Without being able to proof it, it just feels right for me...
Do you have an idea how to integrate the "long term viability" into a KPI that could replace GDP?
I've actually drafted a working paper on this topic, although it's still evolving. One of the conclusions I've been moving towards is that the search for a single replacement KPI may be part of the problem.
GDP is useful in some contexts, but it compresses an enormous amount of information into a single number. I think that replacing it with a different single number would risk creating many of the same issues.
The way I look at it is that we need to distinguish between outcomes and viability. A society can score highly on wellbeing, need satisfaction, or even resource efficiency for quite a long time while gradually eroding the ecological, social, institutional, or economic capacities that make those outcomes possible.
The bit that's challenging is that viability probably isn't directly observable. We have to infer it from a range of indicators, in the same way that a doctor infers a patient's health from multiple signs rather than a single measurement.
That's actually one of the ideas I've been exploring in the working paper. Rather than looking for a single replacement for GDP, I've been thinking about how we might account for the capacities that support long-term wellbeing in the first place. The question isn't just whether people are doing well today, but whether we're maintaining the ecological, social, institutional, and economic systems that make wellbeing possible tomorrow.
So, if I were designing a replacement for GDP, I think it would look less like a single KPI and more like an accounting framework that tracks both current wellbeing and the condition of the underlying systems that support it over time.