Report calls for policymakers to adopt social and environmental indicators, and consider policies such as universal basic income, monetary financing and debt jubilees to ensure fair transition to post-growth economy
London, 11 May 2020 – The Office for National Statistics (ONS) should stop publishing gross domestic product (GDP) figures and instead place more emphasis on a wider basket of social and environmental indicators to help save lives and the environment, according to a report from research and campaign group Positive Money, published today.
The report, titled ‘The Tragedy of Growth’, goes beyond calls for ‘green growth’, showing that the commonly assumed benefits of higher GDP, such as poverty alleviation and increased quality of life, are also unfounded. It argues that the ONS should instead publish a dashboard of wellbeing indicators on a quarterly basis, which the Treasury’s macroeconomic framework and budgeting process should target, instead of GDP.
This dashboard should include a wide range of indicators, such as those relating to health, education and carbon emissions, the report recommends.
The coronavirus crisis has brought into sharp focus the fragility of a system that depends on economic growth, as governments face pressure to relax lockdown measures which save lives because of the feared impact on GDP.
Positive Money’s report explains how the tendency for unemployment and inequality to rise with the absence of growth in a free market economy creates a ‘growth imperative’ for policymakers, to the detriment of human and environmental wellbeing. The report focuses on the role of the monetary and financial system, putting forward a range of reforms which could help overcome growth imperatives while ensuring the transition to a post-growth economy increases wellbeing and decreases inequality, such as:
- A universal basic income (UBI), provided through a central bank digital currency (CBDC) as a public means of payment
- ‘Institutionalisation’ of monetary financing as a means of supporting public spending on post-growth policies
- An ecosystem of public banks to provide local communities with fairer access to credit
- Higher marginal tax rates on the highest incomes, alongside taxes on wealth, financial transactions, property and land
- ‘Debt jubilees’ which would see household debts cancelled or reduced
The report comes ahead of the ONS publishing its first estimate of GDP figures from January to the end of March on Wednesday, which is expected to show the dramatic impact of emergency public health measures on UK growth.
‘The Tragedy of Growth’ will be launched with a webinar featuring contributions from the chair of the UK’s Committee on Climate Change, Lord Deben, as well as Labour MP Clive Lewis and Green Party MP Caroline Lucas.
Positive Money economist and report author David Barmes said:
“Abandoning GDP growth objectives is a crucial step for the fundamental rewiring of our economy needed to avoid social and environmental breakdown.
“On proper examination of the evidence we see that GDP growth drives environmental ruin while failing to deliver enhanced life satisfaction or reduced poverty. But as the coronavirus pandemic has shown, a sudden shock to growth can bring the global economy down in a matter of weeks, illustrating the fragility of our growth-dependent system.”
“Covid-19’s shock to the system reveals an urgent need to rebuild our economy with a focus on achieving social and environmental objectives, such as better health and social support, improved education, and lower carbon emissions. A return to economic growth above all else will simply lock us into further crises down the line.”
- ‘The Tragedy of Growth’ can be viewed in full here: http://positivemoney.org/wp-content/uploads/2020/05/Positive-Money-The-Tragedy-of-Growth.pdf
- The report will be launched with an online webinar featuring contributions from Committee on Climate Change chair Lord Deben, Labour MP Clive Lewis and Green Party MP Caroline Lucas, 12.30-2pm GMT on 11 May. To attend, please register here: https://www.eventbrite.co.uk/e/the-end-of-growthwhy-our-covid-19-recovery-shouldnt-prioritise-gdp-growth-tickets-103799256370
- Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org
- For any questions or to book interviews with a spokesperson, please contact Simon Youel at email@example.com or on 07817765517