GPI compared to GDP: A more honest, inclusive, & healthier economic metric

The Genuine Progress Indicator (GPI) is gaining more and more attention as an alternative to the Gross Domestic Product (GDP), the economic metric adopted in 1944 as the standard for all nations. The GDP is currently the most powerful economic signal on earth, even though it was not designed for that purpose. GDP is used to set pricing, interest rates, budgeting decisions, and other public and private policy. But it is a very inaccurate measurement of our overall well-being and should be partially blamed for our growing inequalities, our still growing degradation of our habitats, and an indication that top-down policy-making by a small number of people (primarily white men) is a bad recipe for global stewardship.

Per Ken Pentel of Ecology Democracy Network (based in Minneapolis), “The GPI is a triple bottom line measurement, with social, economic and environmental indicators. It’s a collection of data points, measurements that lead to a composite indicator like the GDP.

“The GPI is more holistic, meets scale, is well vetted, and it’s a far more accurate assessment of the overall well-being of the biosphere, as well as our social and economic condition. Generally the GPI is considered to be the most scientifically vetted alternative to the GDP on Earth.”  More quotes from his recent interview with Sunrise Los Angeles are in Section F.

This blog is an overview of the current landscape on GPI in the U.S., where it seems to be gaining momentum, state by state and at the national level. 

CONTENTS
A. U.S. GPI Act: Introduced by U.S. Rep. Ilhan Omar
B. Individual States
C. Book + video for self-education: Rutger Hoekstra
D. Organizational partners 
E. Other metrics
F.  Interview with Ken Pentel: Select quotes

A. U.S. GPI ACT:
Introduced by Rep. Ilhan Omar (MN)

1. GPI Act  HR 4894
Original co-sponsors: Marie Newman (D-IL3); Dwight Evans (D-PA3); Jamaal Bowman (D-NY16); Pramila Jayapal (D-WA7); Cori Bush (D-MO1)

2. Press release July 30, 2021
NOTE: This press release is about 2 related bills on “economics for everyone”: the SUPPORT ACT (guaranteed income) and GPI Act.

B. INDIVIDUAL STATES

1. At least 4 states have already adopted GPI:
Vermont, Washington, Hawaii, Maryland.

2. Minnesota has a bill in the works, SF905.
Here’s the section on the definition of GPI:

Sec. 2. [137.46] GENUINE PROGRESS INDICATOR.
Subdivision 1. Definition. For the purposes of this section, “genuine progress indicator” means a measure of economic welfare that includes but is not limited to the following components:
(1) household budget expenditures adjusted for income inequality;
(2) defensive and regrettable expenditures that do not contribute to welfare;
(3) the value of household investments;
(4) the costs of income inequality;
(5) the value of publicly provided goods and services;
(6) the value of services from human capital including the benefits of higher education, manufacturing jobs, and green jobs;
(7) the value of services from social capital, including the value of leisure time, unpaid labor, and Internet services;
(8) the value of services from built capital, including the value of transportation, water, and household infrastructure;
(9) the value of services from protected natural capital;
(10) the costs of natural capital depletion and degradation;
(11) the costs of pollution;
(12) the social costs of economic activity, including the costs of homelessness, underemployment, crime, commuting, and vehicle accidents; and
(13) other components described in current academic literature. 

3. As of Feb. 1, 2022, Oregon is considering a GPI bill HB4093

4. Individuals and organizations in Ohio have been looking at GPI for a while. Here’s two reports from Ohio.

a. 2020, by Scioto Analysis
Press release Ohio’s Long-Term Trend: Economics Up, Environment and Social Indicators Down
Report (9 pages) Ohio’s Economy: 2009-2018: Measuring Genuine Progress in the Buckeye State

b. 2011
Can the Genuine Progress Indicator better inform sustainable regional progress? A case study for Northeast Ohio (12 pages)
by Kenneth Bagstad, Md Rumi Shammin

C. BOOK + VIDEO FOR SELF-EDUCATION:
Rutger Hoekstra

Replacing GDP by 2030: Towards a common language for the well-being and sustainability community
by Rutger Hoekstra

1. VIDEO (1 hour)  
Excellent presentation of history of GDP, why we need something different and more accurateSuccinct and clear

2. BOOK (2019) quotes
“GDP measures the size of the economy yet the perception is that it measures whether a society is doing well or not.”

“Here’s why GDP growth as measure of wellbeing – especially among the richest and biggest nations on Earth (20% is using 80% of the planets resources) – is dangerous:

·      The military grows: GDP improves
·      More garbage on earth: GDP improves
·      More cancer: GDP improves
·      More pollution: GDP improves
·      More income inequality: GDP doesn’t care
·      Housework: GDP doesn’t notice
·      More extinction: GDP improves or doesn’t care
·      Less leisure time: GDP improves
·      More fish extracted from the oceans that leads to colony collapse: GDP improves
·      More advertising; GDP improves.
·      More global warming: GDP improves”

D. ORGANIZATIONAL PARTNERS

1. Ecology Democracy Network
So far as I can tell Ken Pentel is doing the most work on GPI in the U.S.: 

Ken Pentel
Director of the Ecology Democracy Network
P.O. Box 3872 
Minneapolis, MN 55403
(612) 387-0601
kenpentel@yahoo.com

Ken is a great guy, a real grassroots organizer, formerly with Greenpeace and the Green Party. He occasionally does Zoom webinars on GPI (open to the public). Would probably partner with anyone who wants to co-host.

Recent interview (March 2022) by Sunrise Youth Los Angeles
Transcript 
See Section F for some select quotes from this interview.

2. Gross National Happiness USA
GNHUSA also follows GPI. Some good graphics and messaging, although the current information is outdated. No new activity since late 2021.

E. OTHER METRICS

1. Social Wealth Index: The Economic Value of Caring
by Riane Eisler, Center for Partnership Systems

2. Time-use Surveys
Marilyn Waring, professor, former MP of New Zealand 
Website Waring has been studying women’s unpaid work and “time-use surveys” which document the amount of time people put into the caring economy, including children helping to take care of elders, etc. This seems a fertile area of data collection. Some surveys have been done in UK, US, Canada, but it’s still a very new field.

— Here’s one recent article (2019) about the U.S. Time Use Survey has Feminist Origins
— A 1998 interview with Waring talks about Canada, Australia, New Zealand

F. INTERVIEW WITH KEN PENTEL: Select quotes

Here are some excerpts from the March 2022 interview by the Los Angeles chapter of the Sunrise Movement (SLAY), chosen for the concrete information and descriptions of GPI. Here’s the full Transcript.

The Genuine Progress Indicator (GPI) emerged as an alternative to the Gross Domestic Product (GDP). The GPI is a triple bottom line measurement, with social, economic and environmental indicators. It’s a collection of data points, measurements that lead to a composite indicator like the GDP.

The GDP is the most powerful economic signal on earth. It sets pricing, interest rates and budgeting, and [is] a very inaccurate measurement of our overall well-being.

The GPI is more holistic, meets scale, is well vetted, and it’s a far more accurate assessment of the overall well-being of the biosphere, as well as our social and economic condition. Generally the GPI is considered to be the most scientifically vetted alternative to the GDP on Earth. 
….
The GDP has value, so I don’t want to say to get rid of it. It has a value of showing a monetary footprint within a domestic economy, and this makes it useful for that purpose.
…
Let’s take one social measurement. The United Nations identifies about 53% of the world’s work right now as household work. People who take care of a home, take care of children and the elderly and their animals, they clean, they shop, they cook, and so on and so forth. In the GDP, that activity doesn’t show up, because no money has been exchanged. With the Genuine Progress Indicator, we’d put a column in the State, national and global spreadsheet that would show the value of somebody who takes care of a home. Because, everyone knows that household work is essential for maintaining healthy families, and communities, and so the Genuine Progress Indicator recognizes this as valuable. 

I should mention that these are all intersecting points with other movements on Earth. So when I talk about home care, I’m talking about people who deal with elder care, childcare, you know, all the other activities that are associated with taking care of a home. Also, it deals with gender issues; according to the United Nations women are doing about 60 to 70 percent of the world’s work among human population right now. This is essential to understand because gender balance is part of community stability at a variety of levels, such as; population size stabilizes when women have health care, housing and education.
…
Another example of the benefits would be regarding one of the major concerns on Earth and one of the destabilizing effects on the planet, income inequality. Unlike the GPI the GDP doesn’t care about allocation of resources. For example, the GPI would measure income inequality using marginal utility. So, $1,000 going to somebody making $40,000 a year has a different value than $1,000 going to somebody who makes a million dollars a year.
….
Ivy Hung: So just to be clear, what you’re saying is that with the input of the GPI, volunteer companies or nonprofit organizations who work towards goals like preserving wildlife or helping the homeless would be given actual value, and that that would bring in more investors to companies such as those?
…
This would also include the ecological discussion. Right now, a forest is only valuable to the GDP when it’s cut and turned into product: timber or chip wood. In the GPI, a forest is valuable in-and-of-itself; fixing carbon and soil, filtering water and air, habitat for birds. So where the GDP does not care about ecological services or ecological work of a forest, the Genuine Progress Indicator does. And that is endemic in a variety of spheres. 
…
Another example of one of the trends that the GDP has accelerated is human migration from rural to urban, because the GDP undervalues local and rural economies, and overvalues urban and suburban economies. So when you get major cities like Los Angeles, Minneapolis, St. Paul, Chicago, Beijing, Shanghai, Lagos, Mexico City, Tokyo, which have millions and millions of people paying with money for a massive amount of external resources, such as; energy, food, transportation this triggers the GDP. Then the GDP says, “Oh, that’s where the value is”. That density of activity where the money’s being spent using the GDP measurement sends a signal to society that urban economies are more valuable. In contrast you have rural communities and economies that are more self-reliant, self-sufficient, longer driving distances, less dense; valuable, yet not valued in the way we are now measuring the economy.

This has contributed to an incredible gravitational pull of human population from rural to urban the last 80 years. Right now we’re adding about two million people a week to cities on the planet. They’re ballooning. And the danger of this, from my point of view, is that most of the people in the cities are detached from the consequences of their dependencies. They don’t know where their energy comes from. Many think the food grows on the store shelf at the store; they don’t know the consequences of sprawl. 
…
The GDP does not care about limits. It’s a growth imperative. But infinite growth on a finite biosphere can’t be sustained. The GPI does recognize limits, and it recognizes the limits of the biosphere. That’s one of the goals – one of the benefits – of the Genuine Progress Indicator: it starts to move us towards more of a steady-state, and  living in more in balance with Earth.