What if our economy valued what matters

This old system is perversely beholden to indicators like GDP, an indiscriminate measure of “progress” that ends up rewarding the destruction of people and the planet.

Mariana Mazzucato

Jose Cabezas/AFP via Getty Images

A good example of an attempt to change ‘impact indicators’ is this article that argues its time to change the impact indicators for economic growth. The standard indicator GDP or gross domestic product doesn’t measure what truly needs to be measured when it comes to the emphasis on global 21st century sustainable growth.

As we take stock of the pandemic’s wreckage, we must use this moment to overhaul how we measure value, and thus how we organize the global economy. The goal should be to create an economy that supports the health and well-being of every person on the planet, as well as the health of the planet itself. We currently have the inverse: a system that values health only as a means to the end of economic growth.

Mazzucato here cites the reasons why we need to ‘overhaul the way we measure value.’ So how can we do this? The first step is to throw out the old measure of ‘progress’, GDP. She cites two current global projects that are presenting indices that can move the global economy from its destructive tendencies that measure and encourage growth at whatever cost to people and the planet. The United Nations Sustainable Development Goals and Kate Raworth’s Doughnut Economics are presenting ways to change up the way we measure economic growth and social progress.

 In 2020, global GDP grew by $2.2 trillion as a result of governments increasing their military spending; meanwhile, the world still has not provided the mere $50 billion needed to vaccinate the global population.

Mariana Mazzucato here presents an argument for the importance of paying attention to the indicators we use to measure outcomes, and underscores the need to change indicators that will enable us to measure more sustainable outcomes.

Economics has hitherto measured the price of everything and the value of nothing. That must change. We need to measure the value of everything so that we can account for the things that truly matter. Health and well-being – and the care that sustains them – should become our principal measures of success.

Randy Terada
Centre for Social Innovation Annex
720 Bathurst St.

© Randall Terada 2023 • website created by frances may design