Redirecting global economy

Description

Redirecting the global economy involves implementing coordinated policies and mechanisms to shift economic activities toward sustainable, equitable, and resilient models. This strategy addresses issues such as resource depletion, inequality, and environmental degradation by promoting responsible investment, fair trade, green technologies, and inclusive growth. Practical actions include reforming financial systems, incentivizing sustainable production and consumption, and fostering international cooperation to ensure that economic development benefits people and the planet while mitigating systemic risks.

Context

Economic growth, the overriding objective of governments everywhere, is measured by Gross Domestic Product (GDP). GDP is an indicator designed to track total economic activity, developed in the 1930s and 40s amidst the upheavals of the Great Depression and two World Wars. Its inventor, Simon Kuznets, the chief architect of the United States national accounting system, cautioned against equating GDP growth with economic or social well-being in 1934. Yet eighty years on, economic growth is seen as the pathway to prosperity and wellbeing.

However, as an indicator, GDP is a blunt instrument in that it adds up the total monetary value of economic activity, but does not distinguish between the desirability of that activity. It does not count the value created in the non-market economy of social production — caring work, volunteering, domestic labour, ‘work for the world’. Yet every car accident, razed forest, oil spill, heart attack and break-in is counted as ‘growth’ because it results in greater production and exchange of goods and services.