Rethinking Progress: UN Chief Calls for Radical Economic Transformation Beyond GDP
Addressing a meeting of leading global economists following a session hosted by the United Nations, UN Secretary-General António Guterres issued a stark warning: the global economy must undergo a fundamental transformation to cease rewarding environmental degradation and waste. Guterres asserted that humanity’s future hinges on an urgent overhaul of the world’s current “accounting systems,” which he argues are driving the planet towards crisis. He emphasized the need to shift the focus from solely economic growth to a broader valuation of environmental and social well-being. “We must place true value on the environment and go beyond gross domestic product as a measure of human progress and well-being,” Guterres stated. He pointed out the inherent contradiction in measuring progress by metrics that actively contribute to environmental damage, such as deforestation and overfishing.
For decades, the overarching economic objective for governments and policymakers has been the pursuit of growth, as measured by Gross Domestic Product (GDP). However, a growing chorus of critics argues that this relentless, indiscriminate growth on a planet with finite resources is fueling not only the climate and biodiversity crises but also increasing inequalities. Guterres elaborated on this point, stating that “Moving beyond gross domestic product is about measuring the things that really matter to people and their communities. GDP tells us the cost of everything, and the value of nothing. Our world is not a gigantic corporation. Financial decisions should be based on more than a snapshot of profit and loss.”
In January, the UN convened a conference in Geneva titled “Beyond GDP,” bringing together senior economists from around the world, including prominent figures like Nobel laureate Joseph Stiglitz, Indian economist Kaushik Basu, and equity expert Nora Lustig. This group, established by Guterres, is tasked with developing a new dashboard of measures that encompass “human well-being, sustainability, and equity.” A report released by the group late last year highlighted the increasing urgency of economic transformation in the face of repeated global shocks, ranging from the 2008 financial crisis to the COVID-19 pandemic. The report further warned that these events have been exacerbated by the “triple planetary crisis of climate change, biodiversity loss, and pollution,” alongside the disruptive effects of rapid technological change on labor markets and growing inequality.
Professor Basu, who co-chairs the UN group alongside Lustig, emphasized the ingrained prioritization of GDP growth at the expense of citizen well-being and sustainability. “Nations are so locked into the game of beating other nations in terms of the GDP metric, that the well-being of ordinary citizens and sustainability are getting ignored,” he explained. He argued that the accumulation of wealth by a few, coupled with GDP growth, fosters hyper-nationalism, inequality, and polarization. Professor Lustig echoed this sentiment, stating that GDP was “never designed to measure human progress, yet it remains the dominant benchmark of success.” She pointed out that economic growth can coexist with poverty, exclusion, and environmental damage, outcomes that are often overlooked in conventional economic accounting. The group’s objective is not to replace GDP entirely but to complement it, providing governments and the public with a more comprehensive assessment of whether development truly improves human well-being, advances equity, and safeguards sustainability for future generations.
The UN initiative aligns with a recent report indicating that current economic models are fundamentally flawed due to their failure to account for the impacts of climate shocks, such as extreme weather events and tipping points, which could potentially destabilize the global economy. This concern is part of a broader debate within academia, civil society, and policy circles regarding the creation of economic structures compatible with greater equality and sustainability. Proposed alternatives range from green Keynesianism and green growth initiatives to post-growth concepts like the Doughnut, well-being economics, and steady-state economics. Some advocates are even pushing for degrowth, which emphasizes a planned reduction in environmentally damaging and unnecessary production, particularly in wealthier nations, to prioritize socially beneficial sectors like care, renewable energy, and public transit.
Jason Hickel, a political economist and a leading proponent of the degrowth movement, notes that these ideas are gaining increasing traction. He cited a recent survey indicating that 73% of climate policy researchers globally support post-growth economic models. While supporting Guterres’s call to move beyond GDP, Hickel argues that a deeper systemic change is necessary. “A deeper system change is required. Specifically, we need to democratize control over production, which can enable us to change what we produce and for whom,” he stated. He concluded that the dominance of GDP is not accidental but rather a consequence of the structure of capitalism itself, which ultimately needs to be overcome to achieve a truly sustainable and equitable future.
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