GDP 2.0

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You probably wouldn’t call the big-box store if it was the height of human prosperity you were searching for. “Gross Domestic Product”: if it’s a phrase that sounds like the rusty nuts and bolts of an idea that was riveted together in and for the industrial age, that’s because it was. But our economies are still optimized for it. And that’s a mistake–because GDP, even according to it’s creator, the eminent economist Simon Kuznets, is a flawed measure of real human welfare. Why? Because GDP is something like the big-box store in the sky: GDP is simply a measure of the volume of stuff an economy generates–and it’s value to markets, not society, in dollar terms, leaving out the real human, social, and natural costs that stuff might incur and impose. Hence, perhaps it’s no surprise: when societies optimize for GDP, they end up with economies that suspiciously resemble XXXXL big-box stores. GDP 2.0 is an updated measure of national economic output–not “gross domestic product”, but “net real income”–that reflects truer human and social costs and benefits. And before you exclaim “Impossible!!”, here’s something to bear in mind: innovators around the globe, often in the least expected places, are already making it a reality.

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