What the Social Progress Index can reveal about your country

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.