Looking Beyond GDP

December 6, 2019

By Matt Hughes

We need to measure what counts.

The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.

The Movement for New Metrics

To assess the true health of our society, we need to measure more than GDP, as Roosevelt Chief Economist Joseph Stiglitz, French economist Jean-Paul Fitoussi, and OECD Director of Statistics and Chief Statistician Martine Durand write in their new book Measuring What Counts. “Getting the measure right—or at least a lot more precise—is crucially important, especially in our metrics- and performance-oriented society, where we judge ourselves by how well we do in certain well-defined measures. If we measure the wrong thing, we will do the wrong thing,” Stiglitz writes in the book’s introduction. “If our measures tell us everything is fine when it really isn’t, we won’t make the right decisions. And it should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine.”

A global movement: This week, Iceland Prime Minister “Katrin Jakobsdottir has teamed up with Scottish First Minister Nicola Sturgeon and New Zealand’s PM Jacinda Ardern to promote a ‘well-being’ agenda. Ms Jakobsdottir called for ‘an alternative future based on well-being and inclusive growth.’” Read more from BBC.

The Price of Carbon

In 2017, a report by the High-Level Commission on Carbon Prices—chaired by Stiglitz and Lord Nicholas Stern—called for explicit carbon price trajectories (rather than a single price) in order to meet the goals of the Paris Agreement. In a new working paper, Stiglitz further explains the analytics driving that report’s recommendation, providing “a better sense of the circumstances under which a deviation from the ‘single price’ might be desirable, and the form that such deviations might best take.” Read on.

In other news: At the two-week COP25 conference that began in Madrid this week, representatives from over 200 countries are working to crystallize climate targets ahead of 2020, when the Paris Agreement will officially take effect. “Delegates at the conference will seek to finalize outstanding elements of the Paris Agreement. Those include the rules that govern nations’ abilities to ‘off-set’ carbon emissions by paying for reductions of emissions in other countries, and how to fund compensation for countries that are hit by severe climate change impacts. Next year, with those rules in place, countries will try to negotiate higher and more ambitious international targets than those agreed in Paris in 2015.” Read more from Time.

The Racial Rules of Corporate Power

“About 40 years of rules written in favor of the powerful and built upon long-standing, hidden rules of race have resulted in today’s high-profit, low-wage economy. As corporations consolidated and gained market power, they used this power to extract profits from the most vulnerable—specifically targeting communities of color for exploitation, extraction, and exclusion. The government has a moral responsibility to right the wrongs of the past and to live up to its mandate to promote economic inclusion and social equity,” Roosevelt Fellow Darrick Hamilton and Roosevelt Director of Policy and Advocacy Madeline Neighly write in a new issue brief. Read more.

The Future of Prescription Drug Policy

As argued in a new Roosevelt factsheet, curbing prescription drug prices requires a one-two punch of restructured markets and expanded public power. Among the possible solutions: more robust industrial policy, a public option for drug manufacturing, and a federal entity for price negotiation. Learn more in the full issue brief from Roosevelt and the Great Democracy Initiative.

Overpatented, overpriced: As an exclusive report from I-MAK explores, patent and monopoly power in the pharmaceutical industry are primary drivers of sky-high drug prices: “. . . the top grossing drugs have on average 125 patent applications, which are filed with a strategic intent to extend the commercial monopolies far beyond the intended twenty years of protection. Such filings allow drugmakers to a) increase the price of the branded drugs by an average of 68 percent in six years, and b) seek to stall generic competition by an average of 38 years.” Read on.

Who Benefits from Free College

A New York Times Debatable piece on free college cites recent analysis from Roosevelt Fellow Mike Konczal, who “estimates that families within the top 1 percent of the income distribution would capture 1.4 percent of total spending on free college—slightly regressive in relative terms, but arguably not an exorbitant price to pay for the 98.6 percent of spending that would benefit everyone else.” Read more of Konczal’s analysis on Medium.