On the fourth of January, 1934,
A young man delivered a report
to the United States Congress
that 80 years on,
still shapes the lives of everyone in this room today.
Still shapes the lives of everyone on this planet.
That young man wasn't a politician,
he wasn't a businessman,
a civil rights activist,
or a faith leader.
He was the most unlikely of heroes,
an economist.
(Laughter)
His name was Simon Kuznets
and the report that he delivered was called,
"National Income, 1929-32"
Now, you might think that
this is a rather dry and dull report,
and you're absolutely right.
It's dry as a bone.
But this report is the foundation
of how, today, we judge the success of countries.
What we know best as Gross Domestic Product,
or GDP.
GDP has defined and shaped our lives
for the last 80 years.
And today I want to talk about
a different way to measure the success of countries.
A different way to define and shape our lives
for the nest 80 years.
But first, we need to understand
how GDP came to dominate our lives.
Kuznet's report was delivered
at a moment of crisis.
The U.S. economy was plumetting
into the Great Depression.
and policy makers were struggling to respond.
Struggling because they didn't know what was going on.
They didn't have data and statistics.
So what Kuznet's report gave them
was reliable data on what the U.S. economy
was producing,
updated year by year.
And armed with this information,
policy makers were, eventually,
able to find a way out of the slump.
And because Kuznet's invention
was found to be so useful,
it spread around the world.
And now today, every country
produces GDP statistics.
But, in that first report,
Kuznets himself delivered a warning.
It's in the introductory chapter,
page 7 he says,
"The welfare of a nation can, therefore,
scarcely be inferred
from a measurement of national income
as defined above."
It's not the greatest soundbite in the world,
And it's dressed up in the coursest language
of the economist,
but his message was clear,
GDP is a tool
to help us measure economic performance.
It's not a measure of our wellbeing.
And it shouldn't be a guide
to all decision making.
But we have ignored
Kuznet's warning.
We live in a world where
GDP is the benchmark of sucess
in a global economy.
Our politicians boast when GDP goes up,
Markets move
and trillions of dollars in capital
move around the world
based on which countries are going up,
and which countries are going down.
All measured in GDP.
Our societies have become
engines to create more GDP.
But we know that GDP is flawed.
It ignores the environment.
It counts bombs and prisons and progress.
It can't count happiness
or community.
And it has nothing to say
about fairness or justice.
Is it any surprise,
that our world,
marching to the drumbeat of GDP,
is teetering on the brink
of environmental disaster
and filled with anger and conflict?
We need a better way
to measure our societies.
A measure based on the real things
that matter to real people.
Do I have enough to eat?
Can I read and write?
Am I safe?
Do I have rights?
Do I live in a society where I'm not discriminated against?
Is my future
and the future of my children
prevented from environmental disaster?
These are questions that GDP
does not and cannot answer.
There have, of course,
been efforts in the past
to move beyond GDP.
But I believe that we're living
in a moment when we
are ready for a measurement revolution.
We're ready because we've seen,
in the financial crisis of 2008,
how our fetish for economic growth
led us so far astray.
We've seen in the Arab Spring
how countries like Tunisia
were supposedly economic superstars
but they were societies
that were seething with discontentment.
We're ready because today
we have the technology
to gather and analyze data
in ways that would have been
unimaginable to Kuznets.
Today, I'd like to introduce you to
the Social Progress Index.
It's a measure of the wellbeing of society,
completely separate from GDP.
It's a whole new way [Social Progress Index]
of looking at the world.
The Social Progress Index
begins by defining what it
means to be a good society
based around three dimensions:
The first is, does everyone have the basic needs for survival?
Food, water, shelter, safety.
Secondly, does everyone have
access to the building blocks
to improve their lives?
Education, information, health and sustainable environment.
And then third,
does every individual have access
to the chance to pursue their goals
and dreams and ambitions
free from obstacles?
Do they have rights?
Freedom of choice?
Freedom from discrimination
and access to the the world's most advanced knowledge?
Together, these 12 components
form the Social Progress framework.
And for each of these 12 components,
we have indicators to measure
how these countries are performing.
Not indicators of effort or intention,
but real achievement.
We don't measure how much
a country spends on healthcare,
we measure the length and quality
of people's lives.
We don't measure whether governments
pass laws against discrimination,
we measure whether people experience discrimination.
But, what you want to know
is who's top, don't you?
I knew that, I knew that, I knew that.
Okay, I'm going to show you.
I'm going to show you on this chart.
So here we are,
what I've done here is put on the vertical axis
social progress.
Higher is better.
And then, just for comparison,
just for fun,
on the horizontal axis,
is GDP per capita.
Further to the right is more.
Okay,
the country in the world
with the highest social progress,
the number one country on social progress
is New Zealand.