Beyond COvid: The Digest

Push to move "beyond GDP growth" gathers momentum

September 21, 2020
SUMMARY
  • Beyond Growth: The push to abandon GDP growth as the primary measure of socioeconomic progress gathered significant momentum last week. Our In Focus section brings together the latest developments.
  • Avoiding mass unemployment: Our panel discussion with TUC Gen Sec Frances O'Grady, RSA's Matthew Taylor and PIRC's Alice Martin on job creation after Covid-19 is now online. Watch here.
  • Read our In Brief and Reflections sections for the latest research and analysis around economic recovery and reform Beyond Covid.
  • To get in touch with feedback or suggestions for next week's Digest, contact Michael on michael@beyond-covid.org.

Focus: The push to move "beyond growth" picks up momentum

  • Public mandate for change. A major public inquiry of 55,000 respondents found that two thirds of UK adults want policymakers to prioritise citizens’ health and wellbeing over GDP growth, with only 20% of respondents believing Government should continue to pursue GDP as its main policy goal.
  • ~~The inquiry also found majority support for UBI, rent caps and other ‘radical’ policy measures (summary thread).
  • ~~These figures are in line with a poll of 2,000 UK adults in May, which found over 60% support for prioritising social and environmental outcomes over GDP (Positive Money).
  • High-level OECD report outlines “a new economic approach”. An OECD commission of senior economists and policymakers (including the Bank of England’s Andy Haldane) has published a report detailing how policymakers can move “beyond growth”. Read the report here.
  • ~~The OECD asserts that “as the world’s leading intergovernmental forum on economic policy, [it] has a central role to play in creating a new economic narrative”, notable given its historical role in promoting GDP growth as a generalised measure of progress in the mid-20th century.
  • New objectives of economic policy. A central claim of the report is that GDP growth is no longer associated with improved social and environmental outcomes. The authors propose four new objectives for economic policy: environmental sustainability, rising wellbeing, falling inequality and resilience to shocks.
  • Three elements of a “new economic narrative”. If governments are to meet these new objectives, they will need:
  • ~~A new conception of social and economic progress. Policymakers need to adapt a wider set of indicators and targets that track the new objectives of economic policy and, crucially, ensure that these indicators are well-communicated so that they replace GDP as the basis of media and political debate around economic progress.
  • ~~New frameworks of economic analysis. Policymakers need to develop a richer understanding of how economies work, and draw on ‘heterodox’ thinking around issues such as market power, inequalities, finance and the role of the state.
  • ~~New approaches to economic policymaking. Institutional and policy reform is needed (e.g. in decarbonisation, competition and industrial policy).
  • What would this look like in practice? A number of governments and economic policymaking bodies have adopted “beyond growth” approaches already in their work.
  • ~~Iceland’s “wellbeing economy” approach. In our webinar on economic policy and wellbeing, the Economic Adviser to the Icelandic Prime Minister outlined how his government transformed public consultations on wellbeing into economic policy indicators and explained how these have been used to guide economic policymaking and the Covid-19 response. Watch here (19:40-35:30).
  • ~~Doughnut economics. The “doughnut economy” approach, as developed by Kate Raworth, has been adopted by a number of policymaking bodies as an alternative to the growth framework. Most recently, EU Vice President Maroš Šefčovič last week said that the doughnut should guide the EU’s thinking around building back for resilience and the “Green Deal”. Watch here.
Watch our latest webinar: As a 'second wave' looms, General Secretary of the TUC Frances O'Grady, the RSA's Matthew Taylor and PIRC's Alice Martin dissect how we can avoid mass unemployment in our recovery from Covid-19.
Watch our latest webinar: As a 'second wave' looms, General Secretary of the TUC Frances O'Grady, the RSA's Matthew Taylor and PIRC's Alice Martin dissect how we can avoid mass unemployment in our recovery from Covid-19.

In brief

  • Feasibility of net zero. The global Energy Transitions Commission argued that it is ‘technically and economically possible’ to reach a net zero economy in the Global North by 2050, it would cost an affordable 1% of GDP a year to achieve and most areas of the economy can be decarbonised at “very low, nil or even negative cost”.
  • Biodiversity loss and human health. A new UN report warns that action to protect natural ecosystems is essential to prevent future pandemics.
  • Government action needed for green recovery. The CBI has issued a number of urgent policy recommendations on the action needed to secure a green recovery.  
  • Local authority puts GND ideas in practice. North Ayrshire Council is adopting a Community Wealth Building approach to rebuild the economy through a ‘Local Green New Deal’.
  • Innovation and intellectual property. Common Wealth and The Democracy Collaborative have written a report detailing the deep changes to IP law and increase in public R&D spending (2%+ GDP) needed to meet challenges like environmental breakdown and Covid-19. (Coverage in the Independent here.)
  • Dirty recovery. New analysis from the OECD finds that, though $312bn has been committed globally to a green recovery, fossil fuel support measures are prevalent in most OECD and partner economies.
  • UN identifies 'mega-trends'. UN top economists have warned that progress towards the Sustainable Development Goals is already off-track, and that five man-made, interconnected mega-trends - environmental breakdown, urbanisation, inequalities, rapid demographic change and technological revolution - will continue to frustrate efforts to meet these if left unchecked.
  • Event on making tax fairer. Think tank Autonomy will host an event this Friday on how we can create a fairer taxation system post-Covid. Sign up here.

We would like to correct a mistake from our last Digest, where we said that the Government had launched its Life After Covid inquiry. This was in fact launched by a House of Lords Committee in July. The Committee's findings are expected to be published in mid/late-October.

Reflections

  • Preventing mass unemployment. IPPR's Dean Hochlaf writes for Tribune on extending the furlough scheme.
  • "A People's Vaccine". Public health scholar Arnab Acharya and economist Sanjay G. Reddy write on the economic imperative - beyond the incontrovertible ethical case - for a universally provided and accessible vaccine.
  • Peak oil? As BP argues that oil demand will never recover from Covid-19 in its latest Energy Report Outlook, the Economist examines the geopolitical risks of what needs to be a rapid transition to prevent environmental breakdown.
  • This is an emergency. The New Statesman editorial board argues that despite the fact that the cost of environmental destruction far exceeds the cost of preventing it, the world is "sleepwalking into catastrophe".
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