Professor Costanza pointed out that current economic systems rely too heavily on GDP. GDP is the total value of the goods and services created within individual countries and regions during a specific period, and it is widely used as an indicator of economic growth. However, there are some significant disadvantages.
First, GDP simply reflects the total monetary or market value of all finished goods and services, but it does not take into account their impact on society and the environment. Consequently, even harmful events, such as crime and natural disasters, can lead to an increase in GDP.
When crime increases, for example, the demand for security services and equipment also increases, leading to the hiring of more security personnel as the industry expands. Although crime has a profoundly negative impact on society, the counter response to it results in increased economic activity that boosts GDP. Similarly, when a major natural disaster occurs, recovery and reconstruction efforts contribute to GDP growth. However, losses such as deaths and damage to communities are not reflected in GDP.
Because of these shortcomings, Professor Costanza argues that GDP is an inadequate indicator for accurately measuring people's well-being and sustainability of society. He further contends that the continued pursuit of GDP contributes to environmental destruction and growing social inequality.
To address the shortcomings of GDP, the Genuine Progress Indicator (GPI) was developed by Professor Constanza's close colleague, Herman Daly. The GPI is designed to reflect people's well-being and environmental soundness within economic activity. (For details, please read the Blue Planet Prize Story of Prof. Herman Daly.)
Professor Costanza's current challenge is to develop indicators, similar to the GPI, that genuinely measure well-being and satisfaction at both individual and societal levels, and to build public support for their adoption.
Professor Costanza describes the current state of society–relentlessly pursuing economic growth–as an "addiction." Economic growth itself is not inherently bad, but it becomes problematic when growth becomes the sole objective and society becomes fixated on it.
Just like individual addictions, even when we understand that short-term pleasures or gains can lead to serious problems in the future, changing our behavior can be difficult. It is possible that our societies are facing a similar situation. There is a growing awareness that the relentless pursuit of economic growth has fueled environmental destruction and inequality; however, shifting perspectives remains a challenge for many.
Professor Costanza strongly advocates for society to break free from its addiction to economic growth and work towards a sustainable and equitable future. Individual's satisfaction with life depends not only on production and consumption but also on human connection and the enjoyment of various ecosystem services. What we should strive for is not merely the pursuit of economic growth, but the creation of a shared vision that brings genuine well-being to many people. If this vision gains widespread support, it will exert significant influence on governments and corporations, becoming a driving force to steer society in a positive direction. Let's engage in conversations with those around us about the kind of society we want to create and raise our voices to move society forward.
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