As we look towards rebuilding the economy after the COVID-19 pandemic, a coherent strategy for reinvention of the macro-economic system towards more equitable well-being and environmental sustainability is especially potent. Rutger Hoekstra offers a rallying and urgent strategy towards those ends in his book, Replacing GDP by 2030: Towards a Common Language for the Well-being and Sustainability Community.
Why are efforts to move beyond Gross Domestic Product (GDP) so attractive to sustainability experts? Drawing from systems thinking, GDP entails two very high level leverage points for systems change: changing the specific goals for the system (growth is good, stagnation or decline is bad), and changing the paradigm out of which the system arose (the 1940s challenges of postwar reconstruction in a world where few environmental limits had yet to be appreciated). The potential to replace this goal and embed a paradigm of sustainability has thus been a longtime vision of the ecological economics and sustainability communities.
Hoekstra shares insight about how GDP evolved into the dominant global metric—from a humble start as what is akin to a “cottage industry” to a powerful “multinational” .Building on this history, he suggests how we can overcome the hegemony of the GDP multinational by institutionalizing a new accounting framework that honors well-being and sustainability.
Many alternatives for GDP already exist. Indeed the “Beyond-GDP” conversation houses abundant metrics and narratives including the Human Development Index, the Genuine Progress Indicator, Ecological Footprint, and others. However, Hoekstra claims that this proliferation of alternatives may be counterproductive: “Each Beyond-GDP initiative is promoting a different language, using a different dictionary and grammar book. This is why there is no community. There is no means of communication. How can the general public be expected to understand if the people involved don’t even understand each other?” (pg. 16-17). Rather, he suggests that a coherent strategy is needed to overcome the hegemony of GDP.
He proposes that the most effective and efficient way to catalyze a “Beyond GDP multinational” could follow the path that GDP took in the 20th century with four features: (1) a clear objective, (2) clear structure, (3) common language, as well as both formal and informal, and (4) institutionalization. Rather than suggesting that one type of Beyond GDP indicator be declared the “winner,” Hoekstra suggests that local, subnational, and national interests could construct their own accounts, indicators, or dashboards as long as the data they produce are consistent and relevant globally.
Hoekstra’s background is uniquely well matched to suggesting this solution. Not only does he have academic credentials in environmental and ecological economics, but he also has 15 years working inside one of the world’s leading statistical agencies in the Netherlands—a substantial part of that devoted to both critiquing and developing “Beyond GDP” indicators. His extensive expertise is evident in the thought-provoking notes and abundant references.
Building on his deep knowledge of indicators, a majority of the book dives into his suggestion for a common language for the metric set that could replace GDP, which he called a “System of Global and National Accounts” (SGNA), named as a head nod to the existing internationally accepted “System of National Accounts” (SNA) framework for measuring GDP. He suggests four sets of SGNA accounts to quantify Environmental, Societal, Economic, and Distributional domains, each measuring key “statistical building blocks.” Instead of following the economic lead of the GDP and assuming that physical accounts must ultimately be recorded in monetary terms, Hoekstra proposes that these accounting frameworks be “value neutral,” encouraging much of the data collected be in measurement appropriate for that system; for example, environmental data would use physical metrics like tracking changes in the bird species richness or land area covered by forests, whereas conventional economic data would use monetary metrics. These accounts would endeavor to simply measure the system as objectively and individually as possible.
Hoekstra’s primary innovation is in his fifth suggested account: Global Quality Accounts. This set of accounts would focus on resolving the value-laden question, “are things getting better or worse?” Having this quality assessment set of metrics preserves the value neutrality of the “counting” in the other accounts, but will inevitably elicit vigorous multidisciplinary debate especially related to the question, “are things getting better or worse for whom?” He believes this cross-pollination may lead to innovations in policy and co-creation of new solutions supporting greater well-being and sustainability that are not imbued with the current economic biases.
While this diagnosis of the problem and a potential solution—a common language and structure for well-being and sustainability accounts—is robust and innovative, the book does not have as much guidance to offer about the process of moving from a cottage industry to a multinational , i.e., the advocated institutionalization. Indeed, this critical aspect of Replacing GDP by 2030 was only given a few pages. Another book, perhaps from an author with a background in facilitation or stakeholder engagement, could provide a roadmap for this key step of institutionalizing the creation and use of a System of Global and National Accounts.
The GDP ‘multinational’ has a large, surrounding ecosystem: governments and business use the numbers for public policy and business decision making, while politicians, the media, and society drive dialogue about the numbers themselves and relevant goals for society. Fragmentation of the Beyond GDP community has made it hard for a clear and consistent counternarrative to arise—one in which citizens, journalists, NGOs, and government officials can advance coherent and critically needed policies for sustainability and well-being. As practitioners and researchers who hope to see a transformation of the economy towards a system that honors humanity and the Earth, we were enlivened and rallied by Hoekstra’s ideas. His call to action is urgent and strategic , and an important read for sustainability communities.