For economists, politicians and the media, GDP, or Growth Domestic Product, is a big deal. We use it as a barometer for the health of an economy. But just how helpful is it?
A new book, The Growth Delusion, by the Financial Times journalist and economics expert David Pilling argues that it’s actually very misleading.
Officially, GDP measures all monetised activity between willing parties in a given period. So, for example, it includes the sale of stolen goods, but it excludes a parent’s (unpaid) housework or childcare.
It also includes whole sectors of the economy whose contribution to economic growth and general wellbeing are open to debate. For instance, as TEBI readers know, once you factor in the fees and charges involved, you can make a case for arguing that the value added by the active fund management industry is actually negative.
So then, is it time we learned how to value what makes economies better, and not just what makes them bigger? Do we need a different measure of a country’s success? Something along the lines of the Happiness Index promoted by Richard Layard from the London School of Economics, for example?
I’m pleased that announce that the afore-mentioned David Pilling is going to be discussing all of these issues at an event I’m compèring in London on Friday 25th October, called The Values-Based Adviser. David is the keynote speaker, along with Dr Jake Reynolds from the Cambridge Institute for Sustainability Leadership at the University of Cambridge.
The other speakers are Max Tennant from Ifamax Wealth Management, and Andrew Cain, Garrett Quigley and Bernd Hanke from Global Systematic investors. You may recall I wrote a few weeks about GSI’s sustainable index fund — my phrase not theirs — which combines factor exposure with a sustainability overlay.
The event is aimed at financial advisers and investment consultants who want to learn more about engaging with clients about their personal values, and providing them with investment strategies that reflect those values. It’s a follow-up to a similar event we ran last week in Leeds, which was very well received.
Admission is free, but spaces are strictly limited. So please don’t delay in signing up, and if for any reason you can’t go after you’ve reserved a place, please give your ticket back to allow someone else to use it.
You can find out more, and register, by following this link:
Picture: Xi Wang via Unsplash