Ilhan Omar's Genuine Progress Indicator Act: An Important Step for Sustainability
On July 30, Representative Ilhan Omar introduced the Genuine Progress Indicator Act, which would require federal agencies to evaluate economic policies using the metric known as GPI, alongside the traditional Gross Domestic Product (GDP). If other representatives get on board, this could be an important step in building a socially and environmentally sustainable society.
GDP measures how much is bought and sold within an economy. It assumes that more is always better. The GPI is a more nuanced measure, and it subtracts for things that are bad for society and the environment. GDP was invented to try to calm boom and bust cycles in an economy. It was not intended by its inventors to measure the health of an economy. The GPI measures an aggregate of about 26 different factors and combines them into one simple number. It adds for things such as consumption and leisure, and subtracts for things such as inequality, pollution, and crime. Vermont, Maryland, Oregon, and several countries are already experimenting with using the GPI.
Economic growth is a nickname for increased GDP. Many nations, and many commentators on the economy, have come to use increased growth as an indicator of a healthy economy. They do this even though more growth can be terrible for the environment and for human wellbeing. More growth often goes along with increasing levels of poverty. GDP counts as positive things that are bad for society, such as more economic activity that has to happen to deal with a natural disaster. And GDP doesn’t measure bad things such as poverty, increased greenhouse gas emissions, or death from air pollution. In terrible times we can have high levels of inequality, the rich getting richer, pollution levels soaring and money being spent cleaning the pollution, and increased GDP. Focusing only on GDP discourages us from asking a deeper set of questions of our economic policies: What are we doing that helps us meet real human needs? What are we doing to develop environmentally sustainable practices?
GDP measures throughput in the money economy. The aspects of our world where we take care of each other without using money are invisible to it. Feminist economists have argued since the 1980s that much of what we do to meet our needs through household labor should be considered productive economic activity. If I cook dinner for friends, that does not count as economic activity in the GDP. If they buy dinner at a restaurant, it counts. Measuring an economy based on GDP encourages us to think that more buying and selling is in itself a good thing, even though a world where more of what we do to meet our needs is done without buying and selling is likely to be more satisfying than one where all labor becomes capitalist wage labor.
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