GDP is an Outdated way of measuring the Economy’s Health

The way we measure the economy's health is outdated and in dire need of a rethink. The stark reality of inequality, joblessness, insecurity, and environmental disasters we're facing worldwide is a testament to this. People are feeling left behind, impoverished, and ignored, leading them to seek solace in ethno-nationalist strongmen and right-wing movements on the rise.

As an economist who has long argued against the neoclassical approach, it's clear that mainstream ideas and policies are no longer working. They focus on narrow goals like GDP growth and suppressing inflation, while ignoring the massive impact of unpaid care work on the economy. For instance, the International Labour Organisation estimates that 16.4 billion hours are spent on unpaid care work daily, equivalent to 2 billion people working eight hours a day without pay.

GDP growth, touted as a measure of economic activity, doesn't necessarily translate to better outcomes in poverty, health, or jobs. In fact, it can worsen health, pollute the environment, and reduce leisure time. Many countries, like New Zealand, are now looking beyond GDP to measure societal progress in terms of people's well-being.

This approach prioritizes fulfilling human rights, which would lead to a dramatically different set of policy priorities. Instead of individual satisfaction, we'd focus on equality in leisure, standard of living, housing, education, and health. The human rights framework recognizes the complex interaction between individual and collective rights and sees policy as a social and political process that should conform to human rights standards.

It's time to move beyond GDP and income when evaluating economic outcomes. We need to focus on the realization of economic and social rights over time and evaluate policies based on whether they improve the enjoyment of these rights. Social justice advances when access to education, health, work, and social security improves over time.

By using human rights as a framework, we can create a more comprehensive and nuanced approach to measuring economic outcomes, one that highlights inequalities, focuses on people and outcomes, and promotes gender equality. It's time for a rethink and a shift towards a more inclusive and just economy.