Gross Domestic Problem: The Politics Behind the World's Most Powerful Number

"That’s right. Fioramonti is an advisor to the leader of Italy’s Five Star Movement. I met him in Pretoria when I was researching the book. Interestingly, I think Diane Coyle doesn’t like his book. It’s definitely opinionated and iconoclastic. But I like it precisely because of that. It stirs the pot and takes what we think of as this bland, uncontroversial and says, “hang on, this is a construct and this is what’s wrong with it”. He sees many many things wrong with it, but I would highlight two. One, very prominently, is that GDP is really just a measure of income, which implies you need to maximise income. You need to squeeze the planet as hard as possible, produce as much as possible, as quickly as possible, all of that is good for GDP. It suggests that that’s what we crave as people and as societies. Fioramonti is saying, ”hang on, that’s utterly unsustainable”. There are billions of us, there’s a finite planet, and this just leads to wholly unsustainable activities whose negative effects are not captured. If we’re chopping down forests, surely that ought to appear as some kind of negative on the balance sheet. But there is no balance sheet. We don’t measure national balance sheets. We just measure this flow. So, he’s saying that this is very perverse and leads us down blind alleys as societies. The second objection I’d highlight is that he sees GDP as the measure of the rat-race. So, your objective is to get richer so that you’re richer than the person next door, so that you can have a nicer car, so that if you go into a building he might open the door for you because he earns less than you. GDP is the currency of the rat-race, I think he would argue. It monetises everything. Only things that have a monetary value are valued in GDP and, by extension, in society, policy and in politics. Therefore, we don’t value other things. We don’t value community, we don’t value volunteer work, we don’t value housework. He would probably say that, as a consequence, we don’t value women as much as we should. So, he sees a pernicious value system behind this number. I think this book is excellent. I think he’s taken these ideas further in other books and, to some extent, a little too far, down roads that I’m slightly uncomfortable with. But I thought this book was really interesting in exploring the hidden and almost invisible assumptions behind this number and behind that way of looking at our economy. The economy is so sacrosanct now, it has almost become a substitute for society. No politician would stand up and say “I’m going to improve society and strengthen the economy”. They’ve almost become one and the same thing. What Fioramonti is saying is, “hang on, let’s look at this a bit more”. That’s right, and it’s just not accounted for in neoclassical economics."