GDP is built on a great lie. Here Lorenzo Fioramonti explains why GDP is such a dangerous number. GDP is built on a great lie. The lie says that markets are the only producers of wealth. What is not priced, what does not involve a formal financial transaction based on money, does not count – no matter how important it may be for our social and economic well-being. Price tags are the ultimate symbol of GDP. Continuous production and endless consumption are its underlying values. Durability, reusability and self-production are its worst enemies. Things that last are detrimental to GDP, because they only get priced (and thus counted) once. Things that we produce for ourselves are even worse, because they are not priced at all. In this paradigm, households are reduced to cages of consumers. If families do not own two or three television sets, at least a couple of cars, innumerable kitchen appliances and a universe of utensils that must be continuously replaced, then they are publicly scorned. If they are not obsessed with shopping, they are considered a threat to national security. Nature, the ultimate provider of all richness, is enslaved and devalued. GDP gives mankind the illusion that growth is about production, when it actually should be viewed as a transfer.Mankind does not produce anything. It simply turns natural wealth into money. And puts it up for sale, in what looks like the most vicious system of prostitution, the most disastrous Ponzi scheme of history.

According to E.F. Schumacher, the GDP paradigm ‘consumes the very basis on which it has been erected’ and ‘lives on irreplaceable capital which it cheerfully treats as income’. The process through which this illusion is created can be compared to the securitization of the subprime mortgages that led to the 2008 financial disaster. Just as in that case, we are getting a loan (from nature) that we are not going to be able to repay. In the meantime, we slice it up into an endless sequence of small loans (that we call production), which we then sell on to the market in return for money (we call this process consumption). These micro-loans are then packaged by our governments and sold back to everybody, in terms of pollution and environmental degradation. Often it is the poor countries that pick up most of our debt with nature, especially when they face droughts, floods and other types of climate-change-related disasters. But future generations will definitely be the payers of last resort. They will be charged all-time high interests, which essentially cannot be repaid. It is estimated that it took Great Britain around sixty years to double its economy when the Industrial Revolution began. Then it took the US around fifty years to double its economy at the beginning of the twentieth century.

Several East and Southeast Asian countries today have been doubling their economies every ten years.

While a few decades ago the concept of ‘future generations’ was felt with some distance, nowadays we are becoming increasingly aware that – at this rate of growth – the future is quickly catching up with us. Which means that the generation to face nature’s debt collectors may very well be our children’s. Although the media are hung up on the financial and social consequences of the Great Recession, our present economic turmoil is just the tip of the iceberg of a more profound and widespread systemic crisis caused by the dogma of infinite GDP growth. Energy resources are irremediably running out. Countries compete to get access to the few untapped oil fields in what looks like an unprecedented global scramble for fuel. As climate change melts ice caps, governments and oil companies jump at the insane but ludicrous deal of offshore drilling in the Arctic. Meanwhile, nations endowed with precious minerals have been ravaged by wars, coups, corruption and terrorism. For these countries, a resource-rich subsoil has become the ultimate curse, as extractive industries have been willing to do whatever it takes to secure profits at the expense of local communities.

Paradoxically, most societies endowed with a wealth of natural capital have become the poorest in the GDP world.

By definition, infinite growth on a planet of finite resources is incompatible with global justice, at least in so far as it triggers a dangerous zero-sum game. As Mahatma Gandhi once said, the earth provides enough to satisfy ‘every man’s need’, but not ‘every man’s greed’. Climate change has eventually made this simple (but largely rejected) truth self-evident. As our planet can no longer absorb increasing quantities of greenhouse gases, economic growth in our part of the globe becomes incompatible with an equal amount of growth elsewhere. The global village has become a global dustbin. After sweeping the trash under the carpet for years, there is no space left. When we try to shovel more garbage from this side, it inevitably comes out on the other side. By reasserting the need for growth in the most industrialized societies, we are condemning economically less advanced societies to perpetual poverty. At the political level, the GDP dogma has also impoverished democracy. It has glorified the role of technocrats, thus turning politics into a matter for experts. It has perpetuated a culture of violence, exemplified by increasing military expenses. It also has cleaned up the reputation of polluting industries, which have been lauded for their contribution to the national income instead of being punished for undermining collective welfare. At the global level, it has contributed to reducing the space for participation, thus reinforcing a system in which only an elite of big powers can control energy resources while pulling the strings of global governance. GDP has also exerted a profound impact on our societies. It has reduced the time spent on leisure and amplified the burden of work. Technological innovation has not necessarily meant a better quality of life. By contrast, it has often brought an additional layer of complexity. Although nowadays workers achieve more with an hour of their time than they used to in the past, their targets have shifted accordingly. With more technology to help them, they are indeed expected to sustain higher production rates.

This has generated a vicious circle of increasing pressure and continuous burnout. Our work–life balance, too, has been irremediably affected.

Ever more demanding careers make it hard for women and men to have children. Children often spend more time watching television or playing video games than they do with their busy parents. Spare time is also encapsulated into pre-packaged forms of entertainment. As free-of-charge public spaces have retreated, a flood of costly opportunities has inundated our lives. Shopping malls have replaced public squares as places where people meet. Affluent societies are awash with sports centres, gyms, pools and various other forms of private club. Nowadays, it has become virtually impossible to do any outdoor activity without a spate of ‘indispensable’ gadgets (e.g. glossy uniforms, shirts, caps, gloves, sunglasses, etc.) made available at gigantic megastores. Even jogging, arguably the simplest and lightest form of physical activity, has become a resource-intensive experience, while marathons have systematically turned into a phenomenon of collective hysteria, where thousands of people litter their cities with plastic bags, empty bottles, flyers and other types of trash.

GDP was designed as a war device.