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OpEdNews Op Eds    H2'ed 10/30/15

Have We Finally Moved Beyond GDP?

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To help overcome inequality, the latest global gathering of economic statisticians agrees, we need to do much more than total up an economy's goods and services.

Organizers of last week's fifth OECD World Forum on Statistics, Knowledge and Policy could barely contain their sense of satisfaction when the three-day event opened in Guadalajara, Mexico.

Why all the good cheer? Officials at the OECD, the official economic research agency of the developed world, feel they haven't just been organizing gabfests since the first of these triennial forums in 2004. They believe they've been helping change how the world -- or at least the global public policy community -- thinks about inequality.

And that belief, note some prominent independent observers, reflects a healthy dose of reality.

"We now have a broad consensus that more equal societies perform better," as Nobel Prize-winning economist Joseph Stiglitz put it in his World Forum keynote address to the over 1,000 government statisticians, academics, and civil society analysts on hand in Guadalajara.

Joseph Stiglitz
Joseph Stiglitz
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"What we measure affects what we do," Nobel laureate economist Joseph Stiglitz told the fifth OECD World Forum on stats and policy last week in Guadalajara. Photo: OECD.

The OECD, Stiglitz observed, deserves much of the credit for this new consensus. The agency's efforts have helped shift the global analytical mainstream off a mindless fixation on GDP -- an economy's total output of goods and services -- and onto the importance of developing a sustainable "prosperity for all."

In the United States today, pundits and pols still regularly dismiss worries about our contemporary global prosperity for just a few as little more than do-gooder posturing. But at the World Forum in Guadalajara no one treated inequality as anything less than a dangerous social pathology.

"Inequality is becoming unbearable," former Inter-American Development Bank president Enrique Yglesias pronounced. Our economic chasms have reached "obscene proportions."

Deeply unequal nations like Britain, lamented Catrina Williams of the UK Social Mobility and Child Poverty Commission, stand "on the brink of being permanently divided" as the offspring of the most affluent increasingly occupy most all the key levers of power in everything from the judiciary to the media.

One rising Mexican political star at the World Forum, Guadalajara mayor Arist├â │teles Sandoval, obviously sees outrage over inequality as a winning political strategy. The young and charismatic Sandoval, a possible presidential candidate for Mexico's ruling PRI party in 2018, spent some of his Forum face-time blasting the intense concentration of our global wealth.

The world's 80 richest individuals, Sandoval noted, have as much wealth as humanity's poorest half. We have problems "when wealth concentrates in too few hands," he declared, and the state "must intervene."

OECD officials took the opportunity of the World Forum, the first held in the Americas, to release the latest edition of the How's Life? series, a four-year-old effort to get the world focusing, as OECD Secretary-General Angel Gurr-a puts it, "on people and the quality of their lives, not just whether GDP is going up."

The new How's Life? rates the 34 OECD nations across 11 "quality of life" and "material conditions" measures that range from environmental quality and work-life balance to housing and income and wealth. The data can make for jaw-dropping reading. One example: Full-time workers in France and Germany average an hour per day more leisure than workers in the United States and Australia.

Another: The most affluent 10 percent of the population in Denmark and Finland are taking home about five times the income of poorest 10 percent. The top 10/bottom 10 divide in the United States: close to 19 times. In Mexico: 25 times.

Inequalities within nations can rival inequalities between nations.

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Sam Pizzigati is an  Associate Fellow, Institute for Policy Studies

Editor,  Too Much ,  an online weekly on excess and inequality

Author, The Rich Don't Always (more...)

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