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.
(Laughter)
The country with the least social progress,
I'm sorry to say,
is Chad.
I've never been, maybe next year.
(Laughter)
Or maybe the year after.
Now, I know what you're thinking.
You're thinking, "Aha!,
but New Zealand has a higher GDP
than Chad.
Good point, well made.
But let me show you
two other countries.
Here's the United States,
considerably richer than New Zealand,
but with a lower level of social progress.
And then here's Senegal,
it's got a higher level
of social progress
than Chad, but with
the same level of GDP.
So what's going on?
Well, look.
Let me bring in the rest of
the countries of the world,
the 132 we've been able to measure,
each one represented by a dot.
There are lots of dots.
Now, obviously I can't do all of them,
so a few highlights for you:
the highest ranked G7 country is Canada.
My country, the United Kingdom,
is sort of middling, sort of dull,
but who cares,
at least we beat the french.
(Laughter)
And then looking at the emerging economies,
top of the bricks, pleased to say,
is Brazil.
(Laughter)
Come on, cheer!
Go, Brazil!
Beating South Africa,
then Russia,
then China,
and then India.
Tucked away on the right-hand side,
you will see a dot of a country with
a lot of GDP but not
a huge amount of social progress,
that's Kuwait.
Just above Brazil
is a social progress superpower,
that's Costa Rica.
It's got a level of social progress
the same as some
Western European countries,
with a much lower GDP.
Now, my slide is getting a little cluttered
and I'd like to step back a bit.
So let me take away these countries,
and then pop in the regression line.
So this shows the average relationship
between GDP and social progress.
The first thing to notice,
is that there's lots of noise
around the trend line.