We need a new measure of our progress as a country

COVID-19 has uncovered weaknesses in our country that existed long before the pandemic. “Build back better” is a common directive for a post-pandemic period in which we move past the “norms” that maintained a less just society. To rephrase the oft-cited definition of insanity, however, it would be insane to continue the same old conversations while expecting different results.

One place to start is how we understand and evaluate how we’re doing as a country. The economy’s growth or decline is often used to measure how we’re doing nationally. Pundits opine on consumption and production being up, and/or if the government’s popularity will increase with the gross domestic product (GDP). Given the many social, economic, and environmental challenges we face, however, the GDP gives an incomplete picture of Canada’s socioeconomic health.

The GDP was developed after the Second World War, when it was important to revive wartorn economies and to hold the development and progress of nations to a common standard. While a significant innovation at the time, the GDP was never intended to measure overall societal progress, including social capital, quality of life, and the health of the environment.

When paired with redistributive policies, building the economy can create jobs and improve the socioeconomic health of the population, as occurred in the postwar years until the mid-1970s. The rise in neoliberalism in the latter third of the 20th century, however, reversed this progress, and the distribution of wealth became more and more unequal.

Current socioeconomic disparities (particularly in the U.S.) are greater than in the Gilded Age of the 1920s. In other words, the benefits of economic growth go to an ever-smaller group of people.

There are other limitations to using GDP growth as the main determinant of a country’s success. In a world facing a climate emergency to which overconsumption and production are contributing, continuing to measure progress by how much they increase is ultimately counterproductive. Infinite growth of both is beyond the carrying capacity of a single planet.

These are troubling trends. Research of income disparities has found a direct and significant correlation — strong enough to be considered causal — between large income disparity and negative societal indicators, for the entire population. The result is the need for expensive social programs such as welfare, subsidized housing, and health care.

In addition, social scientists say large income disparities lead to status competition and overconsumption by the economic elites (also known as the one per cent), whose environmental footprint keeps growing as a result.

Relying on GDP as the chief measure of national success perpetuates a paradigm that can no longer be justified.

But there’s some good news. Increasingly, quality-of-life indicators are being accepted as a measure of societal progress. The government of Wales enacted the Well-being of Future Generations Act in 2015 to: make public bodies pursue economic, social, environmental, and cultural goals; develop objectives and indicators; and report annually. While prosperity is certainly one of the goals, others include a healthier, resilient, and globally responsible society with cohesive/inclusive communities, a vibrant culture, and a thriving language.

On this side of the ocean, a homegrown example is EngageNS, a non-governmental organization in Nova Scotia that’s recognized by the Organisation for Economic Co-operation and Development as a leader in this field. After its election this summer, the provincial government included quality-of-life language in its mandate letters.

Federally, the Department of Finance released an excellent report in April, Measuring What Matters: Toward a Quality-of-Life Strategy for Canada. It was created “to seek input into a new approach the government is developing to define and measure success, and make better use of data and evidence, to improve its decision-making,” including by integrating quality-of-life measurements.

The bad news, however, is that such an approach is still far from adoption, and a high GDP is still the default objective — shorthand for progress, and for economic considerations over social and environmental ones.

Clearly, if we truly value what we measure, we need to embrace additional measures to prove it. Let’s hope Finance Canada’s consultations proceed swiftly.