Latest / Trumponomics / Why GDP Is a Dumb Way to Measure Economic Output

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Why GDP Is a Dumb Way to Measure Economic Output · Trumponomics

• 0:00
  Speaker 1: A G, A D in a P three letters quite
• 0:05
  Speaker 1: a lot of impact, formally standing for gross domestic product
• 0:09
  Speaker 1: the sum value, and will get back to that word
• 0:12
  Speaker 1: value in a second of all goods and services produced
• 0:15
  Speaker 1: in an economy, usually a nation state like the US,
• 0:19
  Speaker 1: Great Britain, China, and so on. It's been the yardstick
• 0:22
  Speaker 1: by which we've measured what a country's economic output basically
• 0:27
  Speaker 1: is ever since World War Two, and perhaps just a
• 0:30
  Speaker 1: little before that. Our guest will give us a history
• 0:32
  Speaker 1: lesson momentarily, but does it really deserve its pedestal Well not,
• 0:37
  Speaker 1: According to our guest, it might as well stand for
• 0:40
  Speaker 1: gross dumb product or grossest dumb product, responsible for all
• 0:45
  Speaker 1: manner of sins, ranging from the pillaging of a South
• 0:48
  Speaker 1: Pacific island paradise to an instrument of oppression used by
• 0:53
  Speaker 1: austerity craven Northern Europeans to hammer poor, innocent little grease.
• 1:08
  Speaker 1: This is Bloombook benchmark. I'm Daniel Moss, executive editor for
• 1:11
  Speaker 1: Global Economics in New York, and I'm Scott Landman and
• 1:15
  Speaker 1: Economics editor with Bloomberg in Washington. Today. Lorenzo Fiora Monty,
• 1:20
  Speaker 1: a professor at the University of Pretoria in South Africa
• 1:24
  Speaker 1: is joining us. He's the author of the World After
• 1:27
  Speaker 1: g d P and before that, Gross Domestic Problem. He's
• 1:32
  Speaker 1: calling for more than just taking down g d P.
• 1:35
  Speaker 1: In the process, he's offering a revolution, not just in economics,
• 1:39
  Speaker 1: but in how we determine our happiness or place in life,
• 1:43
  Speaker 1: the universe and all that stuff. So Lorenzo, welcome to Benchmark.
• 1:48
  Speaker 1: It's a pleasure to be with you. Now. You're not
• 1:51
  Speaker 1: actually in South Africa right now? Where are you? And
• 1:55
  Speaker 1: what are you doing on Skype? I am connecting from Italy.
• 1:58
  Speaker 1: Were unpromoting the Italian edition of Gross Domestic Problem when
• 2:02
  Speaker 1: my first book published in English in and I'll be
• 2:05
  Speaker 1: soon traveling across Europe to promote the new book, The
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  Speaker 1: World After a GDP, which you have just mentioned. And
• 2:12
  Speaker 1: does your travel budget include lots of austerity? My troubled
• 2:16
  Speaker 1: budget includes a lot of meetings and meeting people and
• 2:19
  Speaker 1: talking to communities, talking to students at universities, talking to
• 2:23
  Speaker 1: small businesses and so on and so forth. I don't
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  Speaker 1: think that's austerity. That's actually a lot of flunt, although
• 2:29
  Speaker 1: it may not necessarily reflecting our GDP accounts well. Federal
• 2:33
  Speaker 1: Reserve Chair Janet Yellen this month called GDP a noisy number,
• 2:38
  Speaker 1: But your concerns go way beyond that. What is it
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  Speaker 1: that bothers you most well? GDP has become much more
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  Speaker 1: than a statistic. It's become the benchmark of success across
• 2:50
  Speaker 1: the world for economies, for companies, for societies at large.
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  Speaker 1: And I wouldn't be too bothered if it was just
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  Speaker 1: a noisy number. What bothers me is the fact that
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  Speaker 1: it's a system of perverse incentives. It's it's become basically
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  Speaker 1: a guideline for policymaking, and that's very problematic because their
• 3:09
  Speaker 1: politicians will take certain decisions because they increase GDP and
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  Speaker 1: they want to be you know, you know, like graded
• 3:16
  Speaker 1: on their GDP credentials and economic growth, and there's going
• 3:18
  Speaker 1: to be a skate effect, as we have seen in
• 3:20
  Speaker 1: the past, you know, eighty years across society, everybody's playing
• 3:24
  Speaker 1: a game to increase GDP and economic growth as a result,
• 3:28
  Speaker 1: even though when those decisions are very detrimental to society.
• 3:31
  Speaker 1: I was teasing you about the austerity on your travel budget,
• 3:35
  Speaker 1: but you make a serious point in your book, which
• 3:38
  Speaker 1: is that GDP and projections of GDP can be used
• 3:42
  Speaker 1: as a political bludgeon in policy debates. Absolutely. I mean, like,
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  Speaker 1: you know, I want to make this point very strong.
• 3:48
  Speaker 1: If GDP was just a flowed number or imperfect number,
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  Speaker 1: I wouldn't have written two books about it. I believe
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  Speaker 1: it's basically a skeleton of what soci I T really
• 4:01
  Speaker 1: wants to achieve. And in a sense, you know, like
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  Speaker 1: it creates those incentives and rewards that you know, make
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  Speaker 1: people take the wrong decisions. And this is happening every day.
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  Speaker 1: I mean, governments around the world try whatever they can
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  Speaker 1: to increase GDP because this has a positive effect in
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  Speaker 1: terms of public image and probably may increase foreign direct investments,
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  Speaker 1: and it pleases the World Bank and the IMP and
• 4:22
  Speaker 1: all of that, or the European Union if you're in Europe,
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  Speaker 1: even though these decisions may lead to cutting social welfare,
• 4:29
  Speaker 1: may lead to destroying the environment and and creating social inequality,
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  Speaker 1: all the things that we prepared to care about when
• 4:36
  Speaker 1: we talk about sustainable and equitable developments and the SDGs.
• 4:40
  Speaker 1: So basically we are in this schizophrenic situation in which
• 4:44
  Speaker 1: we follow certain rules to please the GDP ideology, but
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  Speaker 1: at the same time we seem to recognize that those
• 4:50
  Speaker 1: decisions are wrong and we should do differently, and yet
• 4:53
  Speaker 1: we can't because when we try to do differently, we
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  Speaker 1: get punished. So you mentioned Greece. I mean, I don't
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  Speaker 1: think the Greek you know, the Greek population is completely
• 5:01
  Speaker 1: you know, like unguilty for for what they've done. They're
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  Speaker 1: not completely irresponsible for that, but at the same time,
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  Speaker 1: punishing the society because it has decided to develop itself
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  Speaker 1: in a different way. It's also a short sighted because
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  Speaker 1: that is part of you know, like a bigger process
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  Speaker 1: of creating creating economic interactions and by doing that, so
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  Speaker 1: you are destroying the future of Europe. And Greece is
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  Speaker 1: just the first step in a long in a long journey.
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  Speaker 1: Now let's go back in time for a second, take
• 5:31
  Speaker 1: a step back. It's hard to believe in today's world,
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  Speaker 1: but there once was a time when there was when
• 5:38
  Speaker 1: there was no such thing as GDP. Just under a
• 5:41
  Speaker 1: hundred years ago. It actually grew out of the need
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  Speaker 1: to measure the U S economy during the Great Depression,
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  Speaker 1: even helped the United States calibrate economic policy to win
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  Speaker 1: World War Two. And now we're at a time when
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  Speaker 1: it's become a scorecard of economies against each other, a
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  Speaker 1: quarterly uh yardstick of how each economy is doing, a
• 6:04
  Speaker 1: measure of a country's public image. As you just said,
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  Speaker 1: how did we get to this point from its origins? Well, initially,
• 6:12
  Speaker 1: as you said, GDP was invented as an attempt as
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  Speaker 1: an attempt to deal with the Great Depression. Right at
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  Speaker 1: the time, government didn't really have any way, any reliable
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  Speaker 1: measurement of economic transactions in the market, and people were
• 6:27
  Speaker 1: not being as as excited about economic transactions anymore. So
• 6:31
  Speaker 1: they needed a bit of a thermometer, and they came
• 6:33
  Speaker 1: up with the best they could get. Right. The team
• 6:36
  Speaker 1: that invented GDP was not completely satisfied by what they
• 6:40
  Speaker 1: had done, but they thought, you know, this is probably
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  Speaker 1: the best tool we can put together at this point
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  Speaker 1: in time, and and that's how it started. It's a
• 6:46
  Speaker 1: sum of market transactions, and I think it was pretty
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  Speaker 1: okay at the time in which the government really wanted.
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  Speaker 1: All they wanted was to basically reactivate flows of money
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  Speaker 1: in the economy. But you know very well that what
• 6:59
  Speaker 1: is good in a time of crisis may not necessarily
• 7:02
  Speaker 1: be good in a time of you know, normalcy and
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  Speaker 1: normal economic activities. Just like you wouldn't give a patient
• 7:08
  Speaker 1: was healthy medicines necessarily, medicines may be good if you're sick,
• 7:12
  Speaker 1: but not if you're healthy. They can make you sick
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  Speaker 1: if you're healthy in many different ways. And you know,
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  Speaker 1: it was then used as a tool to plan the
• 7:20
  Speaker 1: Second World War, once again not necessarily a time of
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  Speaker 1: economic normality. Um So it may be very useful to
• 7:27
  Speaker 1: measure production regardless of its utility, because you're building bombs
• 7:32
  Speaker 1: and aircrafts and tags, and all you need to know
• 7:34
  Speaker 1: is how many you can build. The more you can build,
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  Speaker 1: the better. But this is very different in normal times,
• 7:39
  Speaker 1: you know, normal times. You want to make sure that
• 7:41
  Speaker 1: you distinguish between the quantity of transactions and the quality
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  Speaker 1: of transductions. Noble transactions are actually strengthening our economies. If
• 7:48
  Speaker 1: I get sick, GDP goes up because I have to
• 7:50
  Speaker 1: use medicines and I have to go to the hospital
• 7:52
  Speaker 1: and somebody has to be paid to look after me.
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  Speaker 1: But if I stay healthy, GDP doesn't go up. So
• 7:57
  Speaker 1: in a sense, if we want GDP to grow, our
• 8:00
  Speaker 1: policies have to be designed to make people sick. And
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  Speaker 1: if I get stuck in a traffic if I'm involved
• 8:06
  Speaker 1: in a car accidents, if I get killed. All these
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  Speaker 1: transactions increase GDP create economic growth, but they did not
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  Speaker 1: necessarily contribute positively to our economic performance. The problem is that, interestingly,
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  Speaker 1: ever since the nineteen seventies, the late nineteen time and seventies,
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  Speaker 1: we have done the study the studies in the book
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  Speaker 1: as well, we showed that the so called negative transactions
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  Speaker 1: that are counting the GDP far way the positive transactions.
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  Speaker 1: So most of the growth of the nineteen eighties and
• 8:34
  Speaker 1: the nineteen nineties was due basically to pharmaceuticals, took accidents,
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  Speaker 1: to divorces, to military expenditure, all expenses that GDP counts
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  Speaker 1: as positive, but often they are not seen as positive
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  Speaker 1: by economists or by citizens at large. So we were
• 8:52
  Speaker 1: celebrating an economic boom when it was in reality and
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  Speaker 1: economic disaster. But GDP gave us the wrong information and
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  Speaker 1: the policies. The wrong policies were decided upon because of
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  Speaker 1: that system of perverse and centers that have mentioned. All right, well,
• 9:07
  Speaker 1: let's go to the South Pacific and the island nation
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  Speaker 1: of Naru. You begin your book there almost as a
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  Speaker 1: kind of morality tale. Now you even link GDP to
• 9:18
  Speaker 1: the island sinking literally prospects of survival as well as diabetes, drought,
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  Speaker 1: and a bunch of other bad things. Talk about Nauru
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  Speaker 1: and why you think this illustrates your point? Most authors
• 9:31
  Speaker 1: started books with celebrating empires and big countries, and I've
• 9:35
  Speaker 1: decided to the opposite, celebrating one of the smallest states
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  Speaker 1: in in in our global economic community, and that's the
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  Speaker 1: island of Nauru, which is the third smallest states in
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  Speaker 1: the world after them, after Monaco and Vatican. So the
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  Speaker 1: story of Nara is very important because Nara was in
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  Speaker 1: the nineties had the highest GDP per capita in the world.
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  Speaker 1: So in many ways, it was the perfect example of
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  Speaker 1: what happens when you follow the GDP ideology blindly. So
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  Speaker 1: this country invested massively in propping up economic growth by
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  Speaker 1: exploiting the minds of phosphates that the country had. It
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  Speaker 1: was a very small island but basically had a lot
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  Speaker 1: of very good quality buzz bates that was used as
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  Speaker 1: part of fertilizers and other agricultural products in many parts
• 10:22
  Speaker 1: of the world, especially in Southeast Asia and the Pacific.
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  Speaker 1: Long story short, they basically exploited it to the point
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  Speaker 1: of sitting with a huge environmental disaster that has been
• 10:34
  Speaker 1: threatening a cultural production, has been threatening the population. With
• 10:38
  Speaker 1: the money that they collected, because they had some money,
• 10:40
  Speaker 1: most of the money fled to Australia and New Zealand,
• 10:43
  Speaker 1: where it was captured by banks, as it happens often
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  Speaker 1: with the vast GDP growth in many so called developing countries,
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  Speaker 1: but some of the money stayed in the country. And
• 10:52
  Speaker 1: what happened is that with that cash, the governments decided
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  Speaker 1: to listen to many economic advisors and invested in vanity objects,
• 11:00
  Speaker 1: as it happens in many countries, infrastructure that wasn't needed,
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  Speaker 1: and in importing a lot of food because the culture
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  Speaker 1: locally had been damaged to the point of being useless,
• 11:09
  Speaker 1: importing a lot of food that was very poor quality food.
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  Speaker 1: And guess what. From the environmental crisis, they moved on
• 11:16
  Speaker 1: to a health crisis. They became the capital of the
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  Speaker 1: global capital of diabetes, with one of the largest the
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  Speaker 1: highest levels of obesity in the world, and and and
• 11:28
  Speaker 1: and some of the health conditions related to death. And
• 11:32
  Speaker 1: nowadays it's basically a failed economy of failed states, and
• 11:35
  Speaker 1: the only option left to Nurans is migrating Caustralian needs
• 11:38
  Speaker 1: and to get a better to get a better life.
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  Speaker 1: So this is in a nutshell, it's a concentrated metaphor
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  Speaker 1: of what seems to be happening to the entire planet.
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  Speaker 1: We have decided to embark on a production and consumption
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  Speaker 1: process that is ultimately destroying us. But we celebrated as
• 11:55
  Speaker 1: if this was the beacon, the you know, like the
• 12:00
  Speaker 1: the pinnacle of civilization. Because GDP tells us that this
• 12:03
  Speaker 1: is what development is all about, and it's giving us
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  Speaker 1: the wrong information it should go. We should be you know,
• 12:09
  Speaker 1: like doing deffe. We should be doing differently. We should
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  Speaker 1: be distinguishing between transactions that we want, transactions we don't want,
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  Speaker 1: production that is useful, production that is not useful, consumption
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  Speaker 1: that is useful, and consumption that consumption that is not useful.
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  Speaker 1: And GDP doesn't do that, and by not doing that,
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  Speaker 1: it gives us a very very plot piece of information
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  Speaker 1: which then imformed policy and say, you know, like has
• 12:30
  Speaker 1: you know impacts across society. Well, let's go to South
• 12:33
  Speaker 1: Africa where you spend most of your working year. Now
• 12:37
  Speaker 1: after immediately after the transition to democracy in the early nineties,
• 12:42
  Speaker 1: there was a surge in say, for example, foreign investment
• 12:45
  Speaker 1: GDP looked pretty good, but still huge sways of the
• 12:49
  Speaker 1: population had their aspirations un met. Now has that influenced
• 12:53
  Speaker 1: you're thinking as well terms of our GDP um curves
• 12:59
  Speaker 1: or GDP trands SI so worth. After the end of
• 13:01
  Speaker 1: apart type, there was a sense that the country could
• 13:04
  Speaker 1: have embarked on a social justice program. The idea was
• 13:07
  Speaker 1: about that time had come for a distribution of wealth
• 13:10
  Speaker 1: because of apartheide, because of the enormous inequality of the
• 13:14
  Speaker 1: country had experienced. None of that happened. You know why,
• 13:17
  Speaker 1: because the government was told that the best way um
• 13:21
  Speaker 1: to deal with such inequality wasn't about redistributing resources and
• 13:25
  Speaker 1: promoting social offer. It was about growing. It was about
• 13:28
  Speaker 1: embarking on a mass you know, a mass scale economic growth,
• 13:31
  Speaker 1: accelerated growth that would have increased the pie. Everybody would
• 13:35
  Speaker 1: have enjoyed a bigger share, and everybody would have been happy. Now,
• 13:39
  Speaker 1: not only didn't it happen, it didn't happen at all.
• 13:42
  Speaker 1: I mean like, we had significant growth, but most of
• 13:44
  Speaker 1: the growth was captured by those that control the economic leverages.
• 13:48
  Speaker 1: So the rich became richer in many cases, and many
• 13:51
  Speaker 1: poor people may have become slightly less poor, but still
• 13:54
  Speaker 1: significantly worse off than than than the elite. And at
• 13:58
  Speaker 1: the same time, you know, the series interventions in in
• 14:02
  Speaker 1: in adjusting those economic differentials were not We're not taken.
• 14:06
  Speaker 1: In example, for many years the country delayed intervening in
• 14:10
  Speaker 1: the HIV eighth pandemic, and the reason was that rather
• 14:13
  Speaker 1: than spending money on healthcare in people's well being, that
• 14:16
  Speaker 1: should have spent money in infrastructure and developments, because that
• 14:20
  Speaker 1: would have then created all the positive uh IN effects
• 14:23
  Speaker 1: that would have done propped up the economy and improved
• 14:27
  Speaker 1: even the life of those living with HIV NAS. It
• 14:30
  Speaker 1: was crazy. People were done only when in two dozen
• 14:34
  Speaker 1: and four, two dozen and five the country decided to
• 14:36
  Speaker 1: really intervene in social weapon because it was too much.
• 14:40
  Speaker 1: We experienced a significant decrease in mortality rates, HIV AIDS
• 14:45
  Speaker 1: infections went down dramatically. And guess what This happened at
• 14:48
  Speaker 1: a time in which we had half the GDP growth
• 14:51
  Speaker 1: of the previous decame. So this tells you that politicians
• 14:55
  Speaker 1: that follow the GDP vision can take very wrong, the
• 14:59
  Speaker 1: extremely wrong decisions when it comes to the welfare of
• 15:02
  Speaker 1: There are people Lorenzo. Is that happening right now in
• 15:06
  Speaker 1: the United States? We have a president here who has
• 15:10
  Speaker 1: pledged to achieve four percent GDP growth, which is roughly
• 15:14
  Speaker 1: double the pace that we've seen in recent years. Is
• 15:18
  Speaker 1: the US headed for this kind of uh, these kind
• 15:22
  Speaker 1: of difficulties if the Trump administration really pursues that kind
• 15:26
  Speaker 1: of goal as hard as as maybe they're indicating, well,
• 15:31
  Speaker 1: I think that, I think that there's a serious um
• 15:35
  Speaker 1: level of confusion in the United States at the moment.
• 15:37
  Speaker 1: I mean, like, in many ways, a lot of people
• 15:40
  Speaker 1: are rightly upset at at least three decades of economic
• 15:45
  Speaker 1: policies in the US that promoted UM, a kind of
• 15:49
  Speaker 1: economic developments that increased inequality, that made the working class
• 15:54
  Speaker 1: works off UM, that used glibalization to put a lot
• 15:57
  Speaker 1: of people out of work UM and create kind of gaps.
• 16:00
  Speaker 1: That's in many ways explained why somebody like Donald Trump,
• 16:05
  Speaker 1: with an agenda of change, so to speak, won the elections. Now.
• 16:11
  Speaker 1: What is being proposed, however, as a solution, is more
• 16:13
  Speaker 1: of the same rutter than trying to tackle the inequalities,
• 16:19
  Speaker 1: the suffering, and the low level of well being that
• 16:21
  Speaker 1: many Americans experience. I mean, I still find it striking
• 16:24
  Speaker 1: that America is number one in terms of GDP and
• 16:29
  Speaker 1: in terms of all the things that really matter health, literacy, education,
• 16:35
  Speaker 1: life expectancy, and so on and so forth. It's way
• 16:38
  Speaker 1: beyond many countries that are much poorer in GDP terms.
• 16:42
  Speaker 1: So I think America is a very very good case, Laurens.
• 16:45
  Speaker 1: There have been countless attempts in recent years by various
• 16:49
  Speaker 1: commissions and bodies and so forth to create other kinds
• 16:52
  Speaker 1: of indexes of a country's well being. Uh. You know,
• 16:57
  Speaker 1: many people have pointed out the problems in per actions
• 17:01
  Speaker 1: with focusing on GDP as the end all be all
• 17:04
  Speaker 1: of economic indicators. We can talk about this all we want.
• 17:08
  Speaker 1: Is there any real chance of anything changing? Or are
• 17:12
  Speaker 1: we just all tilting at windmills here? I think we're
• 17:15
  Speaker 1: wasting our time with all these commissions. I think it's
• 17:17
  Speaker 1: important to open the debate. That's what my book is
• 17:19
  Speaker 1: supposed to do, to open the debate and have a
• 17:21
  Speaker 1: public debate, and only a debate among experts. Um, we
• 17:25
  Speaker 1: do already have tools that helped a great deal. As
• 17:28
  Speaker 1: I said, if we were to use something as simple
• 17:31
  Speaker 1: as the gen in Progress Indicator, which is nothing else,
• 17:34
  Speaker 1: the GDP, but distinguishing the bat and the good transactions,
• 17:37
  Speaker 1: and and that would be really useful because you would
• 17:39
  Speaker 1: tell the government what are investing in certain areas makes sense.
• 17:43
  Speaker 1: For instance, with with this kind of accounting, it's clear
• 17:46
  Speaker 1: that many industries are not really producing anything valuable for
• 17:50
  Speaker 1: society because the the negative impacts outweigh the gains of
• 17:54
  Speaker 1: these companies. And this includes the fossil fuel industry, that
• 17:57
  Speaker 1: the coal industry, mining and large, the distribution of food
• 18:00
  Speaker 1: and so on and so forth. And I think in
• 18:02
  Speaker 1: the US some states Maryland, Utah, Verymond have already introduced
• 18:06
  Speaker 1: some of these tools at the local level. Um So
• 18:09
  Speaker 1: there are tools that could be used tomorrow. The problem
• 18:12
  Speaker 1: is that we need the political world to do so.
• 18:14
  Speaker 1: And unless the GDP ideology is unmasked and unveiled as
• 18:19
  Speaker 1: an ideology and people mobilize against this to to to
• 18:24
  Speaker 1: code for a different approach, we're never gonna make significant
• 18:27
  Speaker 1: hardware here. And I think in my book, I show
• 18:30
  Speaker 1: how this could be done. I show the fact that
• 18:32
  Speaker 1: GDP is extremely obsolete to be able to account for
• 18:35
  Speaker 1: an economy which is increasingly digital. I'm calling you by
• 18:38
  Speaker 1: a skype now, and I'm not paying anything, and yet
• 18:40
  Speaker 1: we're having a very useful conversation which is not adding
• 18:43
  Speaker 1: anything to GDP. GDP would have been much happier ten
• 18:46
  Speaker 1: fifteen years ago if I was to call you by
• 18:48
  Speaker 1: the phone, because the coal would have been very expensive,
• 18:50
  Speaker 1: probably very low quality, and yet adding to the national accounts.
• 18:54
  Speaker 1: So every time we use What's up to communicate, every
• 18:57
  Speaker 1: time we use Spacebook to make you know to to
• 19:00
  Speaker 1: to share information and some so forth, the Google maps
• 19:03
  Speaker 1: which are for free, we're not adding to GDP, but
• 19:05
  Speaker 1: actually we're strengthening the economy. Nevertheless, GDP is very anachronistic.
• 19:10
  Speaker 1: It sees money flows as a sign of a good economy,
• 19:12
  Speaker 1: but often money flows may indicate a very very sick
• 19:15
  Speaker 1: of Conmy write it in a good one and I
• 19:17
  Speaker 1: think ultimately my book shows that we could use this
• 19:21
  Speaker 1: opportunity to have national conversations about what it means to
• 19:25
  Speaker 1: be developed. In the twenty percent, GDP is no longer
• 19:28
  Speaker 1: what we want. Then we can decide what we want
• 19:31
  Speaker 1: to gether. And so maybe what's going to be decided
• 19:34
  Speaker 1: by Americans or in a state in the US may
• 19:37
  Speaker 1: be different from what's going to be done next door.
• 19:39
  Speaker 1: So if one country Lorenzo. If one country tried to
• 19:43
  Speaker 1: go it alone, and I don't mean a country like Naro,
• 19:46
  Speaker 1: I mean a sort of a medium sized or even
• 19:49
  Speaker 1: a large sized country said right, we're teaching it, We're
• 19:53
  Speaker 1: gonna do something else. What are the risks if they
• 19:57
  Speaker 1: acted alone? They would be crucified by markets and then
• 20:01
  Speaker 1: forced to retreat. Absolutely, we believed exactly because of the
• 20:05
  Speaker 1: power of GDP and its ideology and because it s
• 20:07
  Speaker 1: used as a policy tool, that would be crucified, It
• 20:10
  Speaker 1: would be punished, which is the reason why we're publicly advocating,
• 20:13
  Speaker 1: as I do in the book, for an alliance of
• 20:16
  Speaker 1: countries to go together. What are in Europe? What are
• 20:19
  Speaker 1: around the world. We have also talked about a in
• 20:21
  Speaker 1: alliance of all being economies will call the we seven
• 20:24
  Speaker 1: countries that have done extremely well at building an alternative
• 20:28
  Speaker 1: way of doing the economy that is beyond GDP. And
• 20:32
  Speaker 1: these countries include New Zealand, Costa Rica, Sweden, very good
• 20:36
  Speaker 1: examples of countries that have achieved high levels of well
• 20:39
  Speaker 1: being with a minor ecological footprint and very low and equality.
• 20:43
  Speaker 1: If these countries were too good together and show to
• 20:45
  Speaker 1: the rest of the world that change is possible that
• 20:47
  Speaker 1: we can do it collectively in collaboration. There would really
• 20:51
  Speaker 1: help the entire world wake up, and they may be
• 20:55
  Speaker 1: a positive ripple effect across society. A country shouldn't do
• 20:58
  Speaker 1: this change on its own because GDP has an extremely
• 21:02
  Speaker 1: significant impact of policy decisions and they may be easily critcified.
• 21:06
  Speaker 1: But going together as an alliance regionally or globally would
• 21:10
  Speaker 1: make a big difference, and it is necessary if we
• 21:13
  Speaker 1: want to achieve the Sustainable Development Goals. We have a
• 21:15
  Speaker 1: twenty thirty Agenda which is being ratified by the u
• 21:18
  Speaker 1: N and unless we change away from GDP, we're never
• 21:22
  Speaker 1: going to get there. Well, look, this conversation could go
• 21:25
  Speaker 1: on for a while, and I can tell you're only
• 21:28
  Speaker 1: just getting started. We'll have to have you back on
• 21:30
  Speaker 1: the show. To Lorenzo, thank you for joining us. It's
• 21:33
  Speaker 1: been a pleasure. So Dan, do you think we're ever
• 21:41
  Speaker 1: going to get to a point where we're not focusing
• 21:44
  Speaker 1: on GDP as our end all, be all economic indicator.
• 21:48
  Speaker 1: As Lorenzo was saying towards the end, it really can't
• 21:51
  Speaker 1: be one or two nations, certainly one or two nations
• 21:57
  Speaker 1: that don't have major economic heft being out from the
• 22:00
  Speaker 1: pack and saying we're going to chot our own course
• 22:03
  Speaker 1: with economat tricks. They really would be killed. It really
• 22:07
  Speaker 1: needs to be wanting all in and that's tough to say. Yeah,
• 22:12
  Speaker 1: you'd really have to have something like the I m
• 22:15
  Speaker 1: F or similar body organizing a global conference where you
• 22:21
  Speaker 1: know they'd actually moved towards UH an agreement on which
• 22:24
  Speaker 1: statistics would would would be highlighted because the IMF actually
• 22:28
  Speaker 1: uses a country's UH production of GDP statistics as a
• 22:33
  Speaker 1: measure of their quality of development as a nation. So
• 22:37
  Speaker 1: in any change to that would obviously be highly political.
• 22:43
  Speaker 1: Something for the next Briton Woods for sure. Alright, Well,
• 22:47
  Speaker 1: Benchmark will be back next week and until then, you
• 22:50
  Speaker 1: can find us on the Bloomberg terminal, Bloomberg dot com,
• 22:53
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• 23:01
  Speaker 1: take a minute to rate and review the show so
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• 23:05
  Speaker 1: you thought of the show. You can follow me on
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  Speaker 1: Twitter at at Scott Landman Dan. You're at moss under
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• 23:17
  Speaker 1: f I O r A m O n t I
• 23:21
  Speaker 1: l O fiora. Monty Benchmark is produced by Sarah Patterson
• 23:25
  Speaker 1: and the head of Bloomberg Podcast is Alec McCabe. Thanks
• 23:29
  Speaker 1: for listening, to see you next time.