( A three-minute read)
Right now one of the reasons our economies have to grow is because of debt.
The global economic system runs on money that is itself debt.
GDP (gross domestic product) has outlived its usefulness as a metric of economic size and is it stoking social and environmental crisis by encouraging growth at any cost.
The kind of statistics we’ve used in the past just isn’t working anymore.
With the planet warming and some resources already exploited to near-exhaustion, including many fisheries, with technology removing trade agreements, (as companies and customers increasingly transact their lives in the cloud not to mention blockchains) we need something that accounts for such factors.
GDP can no longer measure the distribution of wealth within a country.
Even where there is growth, disenchantment with how it is shared out can be seen vividly in Brexit-bound Britain. Notably, So, while its total value can go up, gains are all too often skewed to top earners. Those lower down the ladder can fall further behind in relative terms.
It does not encompass the black market, omitting a huge source of activity and income in many developing countries, including in Africa and Latin America.
We’ve got to find another mechanism to include much bigger parts of the population, and use different metrics to measure the success of a country.
So, what are the alternatives to GDP?
The WEF this week proposed a broader measure of growth called.
The Inclusive Development Index (IDI) is an annual assessment of 103 countries’ economic performance that measures how countries perform on eleven dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenerational equity – sustainable stewardship of natural and financial resources.
However for this to truly work countries would need to be liberated from the pressures to exploit their citizens in the hunt for income to repay debts and we would need to remove the creation of debt- based money.
Another word we would have to cancel the debt of sovereign nations and move the creation of money away from the state.
Of course in a capitalist world, this is unrealistic.
China alone owns– $1.168 trillion as of January 2018 of U.S. debt.
However, the European Union which is in need of reform could do a lot to liberate its members from the tyranny of growth.
Some creative long-term thinking is needed.
It could actively downgrade consumption, by banning advertising on mobile phones, I pads and Public place, all of which use manipulation of emotions.
It could write off a reasonable chunk of the Greek debt by spread it among its members in return for solar power.
It could turn the euro into real money by insisting that all banks in the European Union hold at least 50% reserves against money lent. 90% of the money circulating in our economies is created out of thin air. Banks lend it into existence.
It could create a basic minimum income by taxing all profit-seeking Algorithms.
It could tax plastic and sugar.
It could stop the farcical traveling circus which sees the European Parliament move between Brussels and Strasbourg every month.
It could set an example for the rest of the world.
Unfortunately, we are all to busy with I am alright Jack isolation syndrome – its grow or collapse.
All human comments appreciated. All like clicks chucked in the bin.