Since the financial crisis over a decade ago the world has been a place of uncertainty and unrest. There are so many problems we must deal with but there are three major crises: A climate crisis, an inequality crisis and a crisis in democracy.
There are some big questions that need answering. Can the world economy we have built deliver shared prosperity? If we cannot deliver shared prosperity can the democratic system survive? Can 12 billion people in 2050 survive on this planet that could be two degrees hotter than today with all the known knock on consequences?
Today we measure economic performance using the standard measure gross domestic product (GDP) measuring the value of goods and services produced in a country over a given period. Prior to the 2008 financial crisis GDP was doing nicely thank you. This crisis took all of us by surprise largely because the measures we were using failed to give us adequate warning that something was wrong.
The Europeans were majorly affected by the 2008 crisis and political leaders said the best course of action was one of austerity. The voters across Europe were told that the only way out of the mess we were in was for short-term pain that would lead to long-term gain.
In the first three years after the introduction of the recovery plans over 90 per cent of the gains went to the top one per cent of the population. No wonder that so many across Europe have taken to the street to protest and demand answers from politicians as to why austerity was making them poorer while a small group of people grew richer.
To support the world economy in the 21st century requires a huge amount of natural resources, some of them scarce resources. Leaders have a duty to share what environmental damage we are doing and how fast we are using up resources, especially scarce resources. We need to have in place alarm bells that alert us to what will be the future impact of our excessive consumption of natural resources.
We have known for a very long time that our addiction to fossil fuels has directly impacted the environment and contributed to global warming. There are over 1 billion cars, 335 million commercial vehicles and 40,000 planes out there in the world today. To keep us moving and to support heating and lighting we need 34 billion barrels of oil each year and don’t forget that we get through around 37 million tonnes of coal every year.
Our range of measures used to explain performance by country need to change with less emphasis on GDP. We need to share with everyone better measures that clearly explains what is really happening. Don’t get me wrong, there has been a big change in recent years with more information being made available to everyday folk, but more must be done.
We are lucky to have advanced technologies today that can provide us with much better measurement tools. We must embrace change and use new measures that communicate economic, environmental and human development. Positive change will only happen if we have the right measures in place and act upon them. Governments must act and go well beyond GDP as a measure of success.