by Doug Banks

What is GDP?

Gross Domestic Product, or GDP, measures economic activity. Technically speaking, it equals the sum of all goods and services produced within an economy over a certain period. To oversimplify it, we could think of GDP as the sum total of all the price tags within a country’s borders. Metaphorically speaking, GDP is the only universally-recognised heart-rate monitor for determining the health of capitalist economies. Capitalism operates on economic growth, and GDP measures growth. 

Because of this, GDP has become the most influential political and economic metric in the modern world. Governments, corporations and institutions use it to direct resources, frame discussions, and inform crucial decision-making. 

And ever since GDP became our universal stand-in for social progress, it has had the effect of reshaping entire societies in its own image—which is problematic, as GDP is a very sexist, western-centric, careless, ecologically-destructive, and altogether bad image.

Where did GDP come from?

Before the 1930s, to paraphrase the sociologist Daniel Hirschman, the economy as we currently know it ‘did not exist.’ But that’s not to say that our ancestors didn’t act economically. People have been making, buying, and trading things basically forever. But it was only in the decade before World War II that our current understanding of the economy—as something that can be examined, diagnosed, prescribed and intervened upon—was conceived.

It was only in the decade before World War II that our current understanding of the economy—as something that can be examined, diagnosed, prescribed and intervened upon—was conceived

Gross National Product, the precursor to GDP, was invented by the economist Simon Kuznets to help the U.S. recover from The Great Depression. His logic was simple: their economy was obviously broken, but before they could fix it they needed to figure out how to measure it. GNP became the first widely-adopted method of measuring an economy, until the U.S. replaced it with GDP in 1988. (GNP measured all economic activity by a country’s citizens, regardless of where they were in the world. GDP measures all economic activity within a country’s borders, regardless of the nationalities of the people involved.)

How did GDP become important?

In 1944, as World War II was winding down, the leaders of the Allied Nations met in Bretton Woods, New Hampshire, to decide how the world would be rebuilt. They set in motion a few things that would change the course of history forever. First, they cemented GNP (and then GDP) growth as their standard tool for measuring economic progress and development. 

Then, to help reinforce this emerging world order, they established intergovernmental institutions such as the International Monetary Fund (IMF) and the World Bank, and later the Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO). Promoted as the flag-bearers of international development, many of the programmes these institutions have overseen dismantled national sovereignty in the Global South to install Western-friendly and GDP-centric policies. 

Capitalism, by definition, must expand. For half a millennium private firms and individuals have been finding new ways to grow their wealth. But it’s only since the Bretton Woods Conference that pursuing a single, standardised metric of economic growth has become the primary public objective of almost all of the world’s most influential governments and institutions. From that moment onward, we have lived in a world religiously devoted to the pursuit of GDP growth—often at the expense of everything else.

Why is GDP a problem?

GDP was designed to measure an economy getting ready for war, but now it’s used to measure social progress in general. This mutation was already obvious during the Cold War, when GDP became the ideological benchmark for comparing the relative success of capitalism and state socialism. 

Today it’s no different. If a country grows its GDP faster than others, they can claim they’re ‘winning’ at the game of international development, and it’s implied that this will automatically improve the quality of life of its citizens. 

GDP serves as a ‘scorecard’ for political success, which means policymakers will generally favour and implement the policies that will increase it

GDP serves as a ‘scorecard’ for political success, which means policymakers will generally favour and implement the policies that will increase it. As time passes, societies transform to resemble GDP—which is a problem, because GDP resembles a very sexist, western-centric, careless, ecologically-destructive, and altogether bad way for a society to be structured. 

Sexist. By only counting activities that have a price tag, GDP completely ignores all manner of unpaid labour—like having and raising children, elderly care, housekeeping, etc.—that is traditionally undertaken by women. In this way, GDP has a sexist bias implying, mistakenly, that these essential services are less ‘productive’ than what is traditionally men’s work, and should therefore be less respected. 

Western-centric. GDP is, and always has been, rooted in the deeply colonial notion that Western nations have it all figured out, and everyone else would be much better off if they just followed in their footsteps. More often than not, they haven’t been given a choice. 

For example, during the debt crisis of the 1980s, many nations of the Global South were struggling to repay mounting debts to Western banks. In response, the IMF and World Bank forcibly imposed ‘structural adjustment programmes’ on their economies. In short, this meant their governments had no choice but to cut social spending, privatise public assets, dissolve labour and environmental protections, and focus single-mindedly on increasing GDP to repay their creditors in the Global North.

Careless. The rules of a game dictate how its players behave. If GDP is our social ‘scorecard,’ then the ways it measures success will, on an aggregate scale, have an effect on how people and organisations behave. Any brief examination of the activities that GDP registers as ‘good’ for an economy reveal it to be highly problematic and careless toward human wellbeing. As the Dutch historian Rutger Bregman noted, ‘If you were the GDP, your ideal citizen would be a compulsive gambler with cancer who’s going through a drawn-out divorce that he copes with by popping fistfuls of Prozac and going berserk on Black Friday.’

Ecologically-destructive. GDP has always been inseparable from resource consumption, emissions, and environmental degradation. Proponents of ‘green’ GDP growth maintain that with enough engineering, innovation and entrepreneurial flair, we’ll soon be able to ‘decouple’ economic growth from environmental pressures and keep growing happily forever. 

However, as seductive as it is, there’s a problem with decoupling: it has barely any empirical grounding in current or projected technologies. On concluding a series of highly optimistic decoupling models in 2016, the Australian scientist James Ward remarked that ‘growth in GDP ultimately cannot be decoupled from growth in material and energy use,’ and that it is ‘misleading to develop growth-oriented policy around the expectation that decoupling is possible.’

Altogether bad. Despite all of the above, one must assume that maximising GDP growth is, overall, necessary to produce good outcomes for people—otherwise why would governments pursue it so furiously? However, there is a strong scientific consensus that this simply not the case. 

According to the economic anthropologist Jason Hickel, ‘there are many countries that manage to achieve strikingly high levels of human welfare with relatively little GDP per capita.’ What’s more, research has found that above a certain level—a level which all nations in the Global North have long since passed—increasing GDP can actually cause human well-being to decrease.

Mounting evidence suggests that there is no automatic relationship between rising GDP and rising welfare. When it comes to improving citizens’ quality of life, the most important factor is not pursuing the maximum levels of GDP growth or wealth, but instead implementing policies that more justly distribute the benefits of new and existing wealth.

What alternatives exist?

GDP’s most enthusiastic critics typically fall into one of two broad categories (or both): those pushing to replace GDP as our metric for growth and progress in particular, and those advocating to abandon economic growth as humanity’s central goal altogether. 

For almost as long as it has existed, some economists have argued that GDP cannot, and should not, be used as a proxy for human progress. They’ve been mostly ignored. But as focus this century sharpens on social and ecological issues, mainstream appetites are increasing for ‘Beyond GDP’ alternatives such as the Better Life Index or Genuine Progress Indicator. Recently, in rapid succession, the governments of New Zealand, Scotland, and Iceland—all led by women—committed to exchange well-being for GDP as their main policy objective. 

While most agree that moving beyond GDP is essential, some economists, researchers, and activists believe it’s only the beginning of the change we need if we want to avert full-blown climate catastrophe and create a more egalitarian society. Because ‘green growth’ is empirically unrealistic—a fantasy, some would call it—many maintain that we should begin transitioning toward an economy capable of thriving without needing any more economic growth at all.

This philosophy takes form under the banner of ‘degrowth,’ a constellated, rapidly-growing movement advocating for the reduction of humanity’s overall resource and energy consumption, as well as the redistribution of income and resources. ‘In short,’ the organiser and activist Jamie Tyberg writes, ‘degrowth tells us to care for the earth’s systems, to care for the people, and to redistribute any surpluses back to the land and the people,’ with the ultimate goal of ending ‘capitalism-colonialism on a global level.’

Rethinking progress

In the span of less than a century, our search for social progress has been all but completely outsourced to an abstract measurement of ‘the economy’—which is itself a relatively recent abstraction of life itself. Leaning on metrics and abstractions isn’t necessarily a bad thing. Coordinating complex, interconnected societies would be unthinkable without them. But it becomes an issue when ever-expanding domains of human activity become folded into the pursuit of a problematic and inhumane conception of life. 

Perhaps it’s time to stop trying to sculpt our societies into an image of the economy from a bygone era. Maybe we should rethink our metrics, measurements, and very meanings of progress, and start reorganising our economies in ways that celebrate human and non-human nature, rather than constrict it. 

Further resources

Clifford Cobb, Ted Halstead, and Jonathan Rowe, ‘If the GDP is Up, Why is America Down?’ The Atlantic (October 1995).
Although it’s pretty dated, this 1995 Atlantic article is still a great introductory critique of GDP. 

Daniel Abramson Hirschmanm, Inventing the Economy Or: How We Learned to Stop Worrying and Love the GDP (PhD diss., University of Michigan, 2016).
A deeper exploration into the conception of our modern-day fetishism for GDP and the economy-at-large. Go here if you’re interested in how a vague idea became a world-swallowing reality. 

Maristella Svampa, Development in Latin America: Toward a New Future (Nova Scotia: Fernwood, 2019).
A thorough account of how contemporary narratives of economic development via GDP have enabled countries in the Global North to extract land, resources, and cheap labour from Latin America.

Arturo Escobar, Federico Demaria, Ashish Kothari, Ariel Salleh, and Alberto Acosta, Pluriverse: A Post-Development Dictionary (New Delhi: Tulika Books, 2019).
A beautiful compilation of cultural visions, life philosophies and alternatives to GDP-centric development from across the globe that growth-based economics has either repressed or actively oppressed. 

Jason Hickel, Less Is More: How Degrowth Will Save The World (London: Penguin Random House, 2020).
An accessible introduction to degrowth, with some really useful sections on the past and present of GDP growthism and how it incentivises human exploitation and ecological devastation on a mass scale.

Doug Banks is an Australian researcher, strategist, and writer exploring language, economics, culture, and the places they intersect. He is currently head of research & narrative at ArtRebels, a Copenhagen-based collective of cultural researchers and designers.

Denmark’s political alternative

Source: DR
Source: DR

by Rune Wingaard

The Danish political party the Alternative (Alternativet) was officially established in November 2013 and was elected into Parliament in 2015 with 9 seats and 4,9 percent of the total votes. The party’s main goals are to achieve a ’serious sustainable transition’, a new political culture and better conditions for entrepreneurship. The Alternative is critical towards pursuit of economic growth as a primary goal for policy makers and aspire to a new understanding of progress.

The Alternative is aware of the existence of a number of relevant indicators for sustainable progress, yet we have not found one that is considered politically applicable. For example, the ‘five headline indicators for progress’ by the New Economics Foundation is compelling but we find the five headlines to be too complex to communicate to the public in the hyped speed of contemporary media.

Many Danes respond positively when we talk about economic, social, and ecological sustainability, and we wanted our indicator for progress to include these concepts. Accordingly, we decided to have one headline indicator for each type of sustainability in order to make it easily understandable.

We are still in a developing phase of our indicator, but it seems we will decide on the following: Economic sustainability is improving when the rate of employment on collective agreement terms and self-employed increases. The rate of employment has a significant impact on the public budget, so it is a key indicator to the health of the economy. Additionally, we want quality jobs and strong labour unions, hence we decided to only include jobs on collective agreement terms. Social sustainability is measured by improvements in economic inequality in terms of the income difference between the top 20 and the bottom 20 percent of the population. Research has found equal societies to have fewer social and health problems, so equality is a very important indicator of the well-being of citizens. Ecological sustainability is measured by the degree to which the Danish CO2-emissions are declining at a tempo where Denmark makes a fair contribution to securing the internationally agreed goal of avoiding more than 2 percent increases in global temperatures and aim at a 1,5 increase up till 2100. Climactic changes are likely the gravest danger to modern society and CO2 emissions are therefore a relevant indicator for ecological sustainability.

Our general idea is that the main indicators for economic, social, and ecological sustainability have to be positive if we are to propose a policy in Parliament. If we are to vote for a policy proposal from another political party, at least two indicators must be positive, and optimally all three. We will be able to communicate this very clearly to the public and be accountable with regards to these indicators of sustainability.

We are aware of the fact that many other indicators are needed for serious sustainable development. Therefore, each of these indicators will be supplemented with second-level indicators relevant to their area. Economic supplementary indicators could be job employment measured by gender and other ethnic background, job stability, job satisfaction, balance of payments and ratio of private investments to private savings. Social supplementary indicators could be happiness, children’s wellbeing, mental wellbeing, social trust, quality of health care, health inequality, inequality in wealth and income inequalities between gender and for ethnic minorities. Ecological supplementary indicators could be biodiversity, air quality, nitrogen and phosphorus pollution, resource consumption and so forth. The supplementary indicators are considered important, and if a significant number of them are deteriorating or improving, this can affect our attitude towards a specific proposal.

We will decide on the main indicators shortly, and we will ask ecological sustainability experts to help us decide which supplementary indicators are relevant to their field. We will also host what we call political laboratories where we will invite citizens, experts and our own members to discuss the details of our new indicator for progress. This is in accordance with our vision on a new political culture with more democratic bottom-up processes.

We have discussed whether we should follow the headline indicator for New Economic Foundation’s indicator on ‘good jobs’. This includes the amount of the population with a secure job above the ‘living wage’. We are currently in favour of using the more simplistic percentage of the population with a job on collective agreement terms (and self-employed), since we wanted the indicator to be as simple and easy to communicate as possible.

If we vote for our own or a proposal by another political party in Parliament and the proposal passes, we can go to the media and evaluate whether the policy is improving the three main indicators for sustainability. If so, we can argue that it increases triple bottom line sustainability. When we participate in longer discussions we can discuss to which degree the policy improves or deteriorates relevant supplementary indicators.

Whether or not GDP increases is less relevant, the central goal is to ensure economic, social, and ecological sustainability.

We find this to be an accountable and transparent way of communicating with the public and participating in the political process. It matters to citizens whether new jobs are created and inequality and CO2-emissions are reduced. Also, we hope this approach can raise awareness of a triple bottom line understanding of sustainability in the public.

So is degrowth needed to ensure climate justice?

It is highly likely, but to us this is not the key question of our time. Whether or not GDP increases is less relevant, the central goal is to ensure economic, social, and ecological sustainability. Our indicator does not include GDP as we want to measure what really matters in relation to the wellbeing of mankind and nature. The public policy must be centered on achieving these goals and can only be successful via an intelligent cooperation with the private sector, civil society, and international actors.

Mother Teresa once said: “I was once asked why I don’t participate in anti-war demonstrations. I said that I will never do that, but as soon as you have a pro-peace rally, I’ll be there.”

The Alternative wants to communicate as clearly as possible that we are for a sustainable development rather than against growth, as we find this inspires and resonates deeper with the public.

Naturally, the main institutions of the current economic model will have to be reformed in order to ensure a serious sustainable development. Therefore, the Alternative proposes reforms of the financial sector, lower working hours, an ecological tax reform, increased investments in green research and infrastructure, more redistribution, increased financial transfers from the developed to the developing world partly focused on climate change mitigation and adaption, and a slowdown of the massive subsidies for conventional agriculture and the fossil fuel industry.

Rune Wingaard has a Masters degree in social science and international development studies from Roskilde University, where he also works and teaches economics, politics and quantitative methods. He is part of the Economic Council of the Danish political party the Alternative and is very engaged in co-creating a transition towards a much more sustainable, just and thriving society.

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The growthocene

Degrowth demonstration, Leipzig, 2014. Source: Wikimedia.


by Ekaterina Chertkovskaya and Alexander Paulsson

Lately there has been a rising interest in degrowth – an umbrella term that critiques the centrality of economic growth in our societies and embraces various alternatives for ecological sustainability and social justice (see Kallis et al., 2015). This interest is shared not only by the proponents of degrowth, but also its critics, who often support many of the ideas behind degrowth, but have reservations about using the term.

It seems to us that these reservations at least to some extent arise from economic growth itself being an ambiguous and contested concept. For example, Kate Raworth suggests that it is not clear whether degrowth refers to the decrease of the economy’s biophysical throughput or its monetary value, measured in GDP, and argues that the difference matters. Or, John Bellamy Foster proposes that it is important to argue not “for degrowth in the abstract, but more concretely for deaccumulation – a transition away from a system geared to the accumulation of capital without end.”

These reservations about degrowth point to the need to clarify what growth traps to avoid when making a transition to sustainable degrowth. In what follows, we articulate three ways of understanding growth that should be challenged by degrowth: first, reliance on biophysical throughput; second, capital accumulation and productivism more generally; and third, the perpetual strive for quantitative expansion of national economies (measured in GDP). We also propose that growthocene can be a suitable way to characterise the epoch we live in, broadening the notion of capitalocene while opposing the now mainstream notion of anthropocene.


Biophysical throughput

Economies across the world rely on growth of biophysical throughput, which has led to severe ecological consequences for Earth and its ecosystems. In contrast, degrowth would involve descaling biophysical throughput. This critique of growth has been partially integrated into the mainstream discourse, as captured by the notion of anthropocene. However, this concept is deeply problematic as it suggests that all human beings are responsible for the ecological crisis. Differences related to class, gender, race, geopolitics or economic systems themselves are glossed over or totally disregarded.

While renewables are of course an important way forward, the transition to them does not automatically lead to sustainability or justice.

Green economy has become a buzzword that is often suggested as a solution to the world’s ecological problems, whether by the left or right. Such an economy, however, is neither sustainable nor just because it focuses on incorporating (supposedly) green solutions into the economy with all its flaws and divisions rather than changing the economy itself. For example, the economic valuation of nature is green only on paper, in reality, it enables continuous ecological destruction and the appropriation of local governance (see Kill, 2015).

And while renewables are of course an important way forward, the transition to them does not automatically lead to sustainability or justice. For instance, in Brazil, the way the shift to renewable energy is implemented—on top of challenging the biodiversity of the Amazon—often threatens the very way of being of indigenous communities and the livelihoods sustained and inhabited by them (e.g. as the case of Munduruku Indians demonstrates).

So in striving for sustainability and justice, degrowth goes beyond the question of biophysical throughput and the physical limits of our planet. It would need to involve challenging the problematic and potentially harmful solutions positioned as ‘green’, such as the carbon and biodiversity markets or nuclear energy. This also would also require problematising how these proposals have been promoted under appealing banners like ‘inclusivity’, ‘poverty reduction’ and ‘development’. Therefore, it is crucial to ask questions like: ‘what is at risk?’; ‘who benefits and who loses from the proposed solutions?’. Pushing this line of thinking further, we must also ask what societal divisions, injustices and inequalities are maintained, reproduced or enforced by such policy proposals.


Capital accumulation and productivism

This brings us to challenging growth understood as capital accumulation. Not only are the conditions under which capital accumulation occurs demarcated by class, gender, race, and other divisions, but when surpluses are reinvested in the economy, these divisions become amplified. As has been powerfully observed by a broad spectrum of critical theories, such as anarchism, feminism, Marxism, and postcolonial thought, the strive for surplus accumulation relies on maintaining injustices and inequalities. Some of this critique has been captured by the notion of capitalocene, which suggests that capitalism, and not all humanity, is responsible for the ecological and also social problems we are facing (see Haraway, 2015; Malm, 2015; Moore, 2014).

The popular slogan ‘system change not climate change’, then, should imply not only a systemic change in the way we deal with climate or ecology, but in the very way our societies are organised. Degrowth also problematises these forms of accumulation, including, commodified consumption with a ‘sustainable’ or community-oriented appearance. For example, the notion of the sharing economy often commodifies social and communal spaces and depends on  precarious labour conditions (see also Schor, 2014).

While capitalocene is a powerful idea to understand ecological and social problems without decoupling them, it does not capture the whole picture. For example, it struggles with how to grapple with the environmental history of the former Soviet Union and the Eastern Bloc, whose economic systems, too, had devastating ecological and social consequences. Industrial production was the key driving logic for organising these economies, if not in shaping their entire societies.

It is important to challenge not only capital accumulation, but more broadly productivism, that is, the growth of production as desirable in itself.

Therefore, it is important to challenge not only capital accumulation, but more broadly productivism, that is, the growth of production as desirable in itself. Apart from industrial production, this includes many other forms of production found in contemporary economies, such as production of information, knowledge, technology, and services.

However, it is also crucial to note that challenging productivism does not suggest descaling of all production as there are different types, ways, consequences and understandings of it. For example, it would be desirable to see more permaculture as a sustainable production practice in agriculture. Or the expansion of initiatives like platform cooperativism—as opposed to the ‘sharing economy’—would also be appealing to many.

In line with the argument that has been presented so far, we suggest using the notion of growthocene – i.e. the strive for perpetual growth—consisting of reliance on growth of biophysical throughput, continuous capital accumulation and productivism more generally—to describe the epoch we live in and the ecological and social problems we are facing. Degrowth, then, captures both the conditions and the consequences of the growthocene.

Kto-kogo ? Dognat’ i peregnat’ [Translation: Who will (beat) whom? To catch up and overtake]. Soviet Poster, 1919-1930. Source: National Library of Scotland.

Quantitative expansion of national economies as measured in GDP

The perpetual striving for quantitative expansion of national economies is in line with prioritising production as desirable in itself, which is part of the growthocene. The assumption underlying this ideology is that quantitative expansion automatically leads to an increase in prosperity. Based on this assumption, GDP is being used as the dominant measure of the monetary value of national economies. It was introduced as a tool for the US government to deal with the Great Depression and then to plan production during the Second World War, but eventually became the central measure of almost every nation’s progress.

While degrowth is not aimed at shrinking GDP or the monetary value of the economy, we would also like to stress that degrowth should not be evaluated in light of GDP and similar measures as these are essentially flawed indicators of prosperity.

GDP and other similar measures, on top of being inadequate indicators of prosperity, have had problematic consequences. First, they produced a norm, which allowed countries with lower national incomes to be ‘analysed and framed in a way that suited their assumed future compliance with the industrialized model’ (Speich, 2011: 19). Second, gearing crucial public institutions—such as education and healthcare—towards increasing GDP has made them more exclusive and subordinated their core functions to economic demands.

So while degrowth is not aimed at shrinking GDP or the monetary value of the economy, we would also like to stress that degrowth should not be evaluated in light of GDP and similar measures as these are essentially flawed indicators of prosperity. GDP has been convincingly criticised by many scholars already (e.g. Fioramonti, 2013), but, due to its hegemonic status, this remains part of the task of degrowth as well.

Toward the notion of growthocene

To sum up, striving for growth – or the growthocene – is manifested in reliance on growth of biophysical throughput, continuous capital accumulation, and productivism more generally. Hence degrowth can be understood as descaling of biophysical throughput, deaccumulation and anti-productivism, and aimed at bringing together the alternatives that fit these principles.

Such an understanding does not decouple ecological and social problems. It acknowledges that capitalism bears a large share of the responsibility, but is not the only system that has led to the problems we face today. It also highlights that productivism itself is part of the problem and hence cautions against proposing solutions rooted in its logic.

A version of this article has been published in the blog of ENTITLE, a network of European Political Ecologists.

Ekaterina Chertkovskaya is part of the degrowth theme at the Pufendorf Institute for Advanced Studies and the Sustainability, Ecology and Economy research group at the School of Economics and Management, both at Lund University. She is also a member of the editorial collective of ephemera journal.

Alexander Paulsson is part of the degrowth theme at the Pufendorf Institute for Advanced Studies and the Sustainability, Ecology and Economy research group at the School of Economics and Management, both at Lund University. He is also a postdoctoral researcher at the Swedish Knowledge Centre For Public Transport.