The key to national progress is no longer GDP growth. It’s prosperity.

Economic growth in rich countries is slowing down: Europe is heading for a recession, and there’s plenty of debate about whether the United States will face one too (and if so, when). For most countries, the consequences will likely be a mix of higher unemployment, lower wages and incomes, and more business closures.

Recessions can often be traced back to declining consumer confidence. When consumers hear gross domestic product (GDP) growth is shrinking, they lose confidence and spend less—which hurts businesses that then cut wages and lay off employees, most often low-income workers. News media announcing recessions based on their own arbitrary definitions can make consumer confidence fall even faster, an illustration of the growth imperative in action. Low confidence traps consumers in a loop: They need to spend money in order for GDP to grow, but they also need to be confident in the country’s GDP growth before spending money.

Since the end of World War II, boosting growth has been the main national policy of almost every country. But this singular focus on GDP, and its role in shaping economic and political decisions, is outdated. GDP only measures market transactions; it does not factor in a country’s wellbeing or social progress.

It is time to stop talking about GDP growth as the only metric that matters. Developed countries, in particular, should prioritize previously subordinated goals—such as climate resilience, health care access, education, happiness, life satisfaction, or the reduction of inequality—over GDP growth. This requires a deep narrative change in most Western societies from talking about economic progress to focusing on human progress. In making that shift, economists and political scientists will need to define concepts like wellbeing, happiness, and human development—and the encompassing concept of prosperity.

 
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Πηγή: atlanticcouncil.org