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Sponsored by [Cariuma]( The newsletter to fuel â and thrill â your mind. Read for deep dives into the unmissable ideas and topics shaping our world. Sep 07, 2022 Today Many news outlets report obsessively about whether or not the economy has grown, even as the yardstick for measuring growth is famously, and perhaps fatally, flawed. In the words of late U.S. Sen. Robert Kennedy, gross domestic product âmeasures everything ⦠except that which makes life worthwhile.â One country has pioneered a Gross National Happiness Index, which begs an important question: Will we eventually get smarter about how we measure wealth? Or will we remain stuck with tools that may do more harm than good? â with reporting by Matthew Blackman from Cape Town, South Africa [Autumn Breeze & Sneakers Please]( [Cariuma]( Every season is sneaker season if you ask us. Summer is winding down and beach days are slowly turning into skatepark nights. And if youâre searching for some classic, comfy, and transitional footwear to guide you through this next season, [Cariuma]( has got you covered. The Oca Low Canvas sneaks are a signature staple â featuring organic cotton, a perfectly weighted rubber sole, and a classic cap-toe design for a crazy-comfy, go-to look. No wonder itâs a staple in OZYâs wardrobe, not just for autumn, but for every season. Grab yourself a pair with our exclusive code, [OZYSEPT](, which scores you 15% off on any sneaker of your choice. [Shop Now]( Have we been duped? Leaders are âsweaty palmed over growthâ Around the globe, leaders are eager to see the return of economic growth after the devastating pandemic. But some economists are now casting doubt on the idea that perpetual growth of gross domestic product (GDP) is even possible â or desirable. University of Cape Town economics professor Murray Leibbrandt has spent his academic life studying inequality and says the problem with GDP is that âthe story it tells is one that is often grossly distorting.â In fact, says Leibbrandt, GDP growth is a weak measure of a societyâs progress. Fifteen years ago in South Africa, the countryâs GDP was expanding at a robust annual rate of 5%. But, said Leibbrandt, improvements in reducing poverty and unemployment during the same time period were âdisappointing.â The economy grew, he explained, but the benefits did not reach 50% of the population. Liebbrandt says that governments around the world today are âgetting sweaty palmed over growth.â But such single-minded focus on a single statistic can be damaging. âGovernments have to have a vision,â he told OZY. An effective blueprint for the future must encompass more than just an expanding GDP; it must factor in the overall well-being of the people, as well as stewardship â or destruction â of natural resources and the environment. A failure to measure what matters Nobel Prize-winning economists Esther Duflo and Abhijit Banerjee authored the book âGood Economics for Hard Times,â in which they caution leaders about pursuing âbusiness-friendlyâ policies to achieve economic growth at the expense of low-income citizens. Growth is useful, they say, only if it raises âthe quality of life of the average person, and especially the worst-off person.â What does GDP actually measure? In broad strokes, gross domestic product is the monetary value of the goods and services produced in an economy in a given time period. Columbia University economist Joseph Stiglitz has [written]( that GDP âdoes not measure health, education, equality of opportunity, the state of the environment and many other indicators of the quality of life.â Even the original pioneer of GDP measurement, Simon Kuznets, warned that GDP is not a measurement of well-being and happiness. In the U.S. between 2020 and 2021, GDP [increased]( by 9.08% while, at the same time, life expectancy [decreased]( by 0.39 years. Indeed, the economy was booming even as the country was experiencing its sharpest two-year [decline]( in life expectancy in nearly 100 years. Drug overdoses, in addition to COVID-19, were among the causes of rising mortality. To Leibbrandt, these statistics show that GDP simply fails to reflect âwhat you want to achieve in a society.â So whatâs the alternative? [Sustainability is in Our DNA]( [Cariuma]( Meet the OCA Low Canvas, [Cariumaâs]( much-loved, signature classic sneaker. 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[SHOP NOW]( Solutions and their problems Attempts to measure happiness David Bridgman, a former development expert at the World Bank, summed up the challenge of developing an alternative to GDP when, in a recent interview with OZY, he pointed out that âmeasurements of well-being are difficult because they are so subjective.â Indeed, GDP is an attractive yardstick because measuring the dollar value of goods and services is straightforward. How, after all, do you measure happiness? One country is trying: Bhutan has pioneered a [Gross National Happiness Index]( that was developed with the help of Oxford University researchers as a replacement to GDP. The GNH Index measures socioeconomic life, including living standards, health and education. It also attempts to measure cultural and psychological well-being. Interestingly, [Bhutanâs GDP]( has also shown impressive growth, averaging an annual rise of 7.5% since the 1980s, even as leaders have focused on happiness. The countryâs economic growth is largely the result of its efforts to develop hydropower, which coincided with a dramatic decrease in poverty. âProsperity Without Growthâ According to economist Esther Duflo, Malawi is [a good example]( of a country where GDP has not grown but the quality of life for ordinary people has improved because of what she calls âa policy focus on issues of human welfare.â Meanwhile, the opposite is true in Angola, where GDP is robust because the country produces abundant quantities of oil. Despite having the third-largest economy in sub-Saharan Africa, [half]( of Angolans live in extreme poverty. Says Liebbrandt, âfor all the oil they pump and money they earn, the society itself might well be going backwards at a precipitous rate.â Whatâs more, the environmental costs associated with drilling oil are not factored into GDP. The French economist Thomas Piketty has advanced the idea that the social costs of carbon emissions should be subtracted from GDP for a truer accounting. But even then â as Piketty argues in his book âA Brief History of Equalityâ â the widespread use of GDP as a yardstick is fundamentally flawed, because it perpetuates âthe illusion that we can always counterbalance damage with money.â Extraordinary economic growth over the past two centuries, says Piketty, has come at the cost of exploiting the Earthâs natural resources â which cannot be easily replenished, even with a lot of cash. Ecological economist Tim Jackson is the author of âProsperity Without Growth,â in which he writes that people can âflourish without endlessly accumulating more stuff. Another world is possible.â But if another world is possible, how do we get there? And why arenât more countries pursuing a Gross National Happiness Index?
WATCH TAHJ MOWRY on [The Carlos Watson Show](! Formerly known as âradicalâ The opposite of growth Economists around the world are now dipping a toe into the concept of âdegrowth.â Giorgos Kallis, one of the ideaâs most prominent advocates, [says]( that we must âabandon the ideology that the constant pursuit of economic growth is good and natural.â He calls on all people to live modestly like Pope Francis and ex-Uruguayan President José Mujica. This can be a tough sell. Behind degrowthâs calls for modest living is the idea that a finite planet cannot sustain ever-increasing growth and consumption. This concept was derided as âradicalâ in the 1970s, but as climate change continues to roil the globe, some economists are warming to the idea. In June, the World Economic Forum [advanced]( the viewpoint that degrowth might be worth a deeper look. Meanwhile, more and more [books](, [podcasts]( and [news outlets]( are taking degrowth seriously. Signs of better living While no measurement of well-being or happiness is widely used right now, some countries and organizations are pushing hard to develop new tools that could become popular in the future. Bhutanâs GNH is one, while New Zealand has developed a similar Living Standards Framework. Japan is currently looking to develop a â[green GDP](,â which will measure its progress in reducing greenhouse gas emissions. The United Nations, meanwhile, has created the Human Development Index, which focuses on peopleâs access to food, health and education. Community Corner What should we measure instead of GDP? [SHARE YOUR THOUGHTS]( ABOUT OZY OZY is a diverse, global and forward-looking media and entertainment company focused on âthe New and the Next.â OZY creates space for fresh perspectives, and offers new takes on everything from news and culture to technology, business, learning and entertainment. [www.ozy.com]( / #OZY Curiosity. Enthusiasm. Action. Thatâs OZY!
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