Taking the Long View - Keeping Score as if the Future Matter

Taking the Long View
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Gord Stewart


Keeping Score as if the Future Mattered

A letter came in the post – a rare occasion, for sure, in our age of instant, electronic communication. But there it was. A lovely handwritten note, with a newspaper clipping, from Janet, a long-time, very special neighbor of mine back in British Columbia.

The clipping was a column I had written. Published Tuesday 16 February, 1999 in the Victoria Times Colonist, the title was ‘Keeping score as if the future mattered’. It was about GDP and our totally inappropriate use of it as a measure of progress.

Janet had been doing some tidying up, came across the column, and thought it would be fun to send it to me. Knowing her, I suspect it was buried in a pile on her desk all those years.

Rereading my, now 20-year-old, column, I thought: But for an enlightened Treasury and an open and innovative Government, I could send it in unchanged and have it published right now.

Gross domestic product (GDP) is our standard measure of growth. It’s the total value of all officially recognised goods and services produced in the economy in a given period. We have long been enamoured with it. If GDP goes up, that’s growth – and that’s good.

Or is it? Economists devised GDP as a simple measure of output. Nothing more. If our wellbeing is important and the future matters, GDP is not the way to keep score.

GDP as a progress indicator is the equivalent to financial accounting using a calculator with no subtract function. There are no costs, only benefits. Oil spills, violent storms and heart attacks, for example, are counted as pure gain. Money is spent on damage control, rebuilding and health care, and GDP goes up.

GDP treats everything as current income. It doesn’t penalise us immediately for overfishing or for unsustainable agricultural practices, for example. We get growth and income in the short term, without having to account for losses to future generations.

The Genuine Progress Indicator (GPI), a thoughtful but little used alternative to GDP, corrects for these shortcomings. With GPI, the good work of volunteer coaches and family caregivers counts for something. True ‘goods’ push up GPI, while ‘bads’ (like crime and pollution) reduce it. Studies show that, globally, GPI per capita has not improved since the late 1970s while GDP per capita has more than doubled.

Crucial components of GPI – like wellbeing, the environment and the future – will feature in the Government’s 2019 ‘Wellbeing Budget’.

The Prime Minister laid out the new approach in a speech given last September to an international conference on sustainable development at Columbia University in New York.

“We have had rates of growth that international commentators have remarked upon and commended, but at the same time we also had some of the worst homelessness in the OECD and growing inequality,” she said. “I don’t consider that success. Economic growth accompanied by worsening social outcomes is a failure. So we are establishing brand new measures of national achievement that go beyond growth.”

The Treasury’s Living Standards Framework (LSF) will help put the Government’s ideas – and ideals – into action. The LSF builds on 30 years of local and overseas research. It also draws on the OECD wellbeing approach to enable international comparability (and meet the UN’s Sustainable Development Goals reporting standards).

Under LSF, current wellbeing will be tracked in 12 areas: civic engagement and governance, cultural identity, environment, health, housing, knowledge and skills, income and consumption, jobs and earnings, safety, social connections, subjective wellbeing, and time use.

Stats NZ has developed a set of indicators covering all these areas. They will be used in an LSF Dashboard to help analyse, measure and report on intergenerational wellbeing.

The LSF also goes beyond traditional markers of financial and physical capital to consider natural, social, and human capital as a basis for current and future wellbeing.

All sounding a bit complicated? Eyes glazing over perhaps.

GDP is simple and the easy way out is to stick with it. But, with its narrow economic focus, it can lull us in to thinking things are going swimmingly when they aren’t.

Transformative change is what we need and the big minds are onto it. It’s time to give it a go.


Gord Stewart is an environmental sustainability consultant. He does project work for government, industry, and non-profits.

More info …

Living Standards Framework – At www.treasury.govt.nz, click on the ‘Living standards’ link.

‘What is the Wellbeing Budget?’ – At www.labour.org.nz, click on ‘News’ and go to the January 31, 2019 posting.

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