A compass is a device that indicates direction. It helps us take decisions and is probably the most important instrument for navigating chaos and uncertainty. But what if the needle leads us astray? Can we fix it once we veered off the route we want to take?
The GDP is such a compass, used by our societies and decision-makers to see if we are on the right path. Given today’s challenges such as climate change and inequality, it is evident that this major political instrument is no longer fit for purpose. Designed about 90 years ago to lead the way out of the Great Depression, it is incapable of guiding us onto a sustainable path for humanity to thrive. GDP growth is little more than an aggregation of market transactions measured in monetary terms, such as the production and sale of t-shirts or weapons, regardless of whether they contribute to – or harm – human and planetary wellbeing.
A new compass is needed, that helps us track progress in areas such as climate security, ecological regeneration, health, poverty alleviation or equality. The “Common Good Product“ (CGP) is such an innovative measure that can be used by policymakers and societies to measure success and incentivize economic activity that contributes to the common good.
An alliance of leading voices of sustainable business and future-fit economics promotes the idea of the Common Good Product and recently formulated an open letter to the G20 Heads of State and Government, asking them to rebalance our economies by enabling the development and roll-out of a Common Good Product, at national, regional and local levels. Christian Felber, co-founder of the global grassroots movement “Economy for the Common Good” put it this way: “The Common Good Product shifts the focus of success measurement from the means (money and capital) to the goals (wellbeing or common good).” Among the supporters are renown environmental economists, entrepreneurs and sociologists, musicians and artists, and even a famous German football club.
Kate Raworth, author of “Doughnut Economics”, comments: “In order to create economies that thrive, nations need to be guided by metrics that reflect the Common Good. I look forward to seeing the results of this innovative initiative – crowdsourcing a new approach to assessing the health of the future economy.”
Mike Bronner, president of organic movement pioneer Dr. Bronners: “As a company dedicated to using business to do good, we are committed to measuring our social and environmental performance according to an independent third party standard. Why should governments not do so as well?”
The idea of moving beyond GDP is not new and there is an impressive body of research. According to the initiators of the Common Good Product, the parameters for defining it are not a universal blueprint but should be individually co-developed either by the national parliament or the sovereign citizens in representative assemblies or other innovative participatory processes that strengthen our democracies.
Christian Felber: “The CGP at this stage of development is neither a fully defined scientific model nor bound to its name. There are currently many concepts of this idea growing all over the world such as Gross National Happiness in Bhutan, OECD’s Better Life Index or today’s relaunched Happy Planet Index. It does not matter what you call it. What matters is the fundamental shift in mindset and involving the people. We cannot leave it up to consumers to save the world. We must urge leaders of the most powerful countries to change the parameters of our economies on a larger scale.”
The compass of the Common Good Product could be a powerful lever for transformation, showing ways to increase the wellbeing and thriving of people and nature, rather than endless growth on a limited planet.
The Economy for the Common Good, who is leading the initiative, will continue advocating the model and aims to bring it up to the highest levels of global governance. Supporters of the idea of the Common Good Product can sign a petition on www.commongoodproduct.org which will be handed over at next year’s G20 summit.