The End of GDP
Peter Drucker may have been the leading theorist of information in the modern economy, but he did so as a management theorist rather than economist or historian. It was this obsession with management which inspired his most memorable quote ‘if you can’t measure it, you can’t manage it’ – a favourite dictum of executives for decades and now the calling card of data-driven performance.
It is true in public policy as much as anywhere else. While it is critical to outline the policies necessary to break with neoliberalism and begin the shift to FALC, this means little if new metrics of success aren’t also created. If we continue to measure things which mean little in dealing with the five crises – while failing to capture the essence of value as information becomes progressively more important – then whatever merits central bank reform or UBS might have, the pursuit of FALC will fall short. Simply put, we need new ways of measuring success appropriate for the Third Disruption, rather than the Second. Ultimately that means leaving the world of GDP, or gross domestic product, behind us.
Today GDP is the principal measure of economic activity. When GDP is rising, the economy can be said to be growing; when it is in reverse, this marks a recession. The information it expresses is the value of all economic transactions within a fixed period of time, usually a year. That is, all the goods and services that are produced, sold and purchased.
232
paradise found