Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time. GDP per capita is often considered an indicator of a country’s standard of living. Seriously, Economists have little clue about how economic cycles actually function and what events trigger the final outcome of an economic cycle. Frankly, as someone correctly said that economy is a way of spending money without getting any pleasure out of it.
We humans are masters of asking wrong questions. First we misdiagnose a problem then look for a false solution and after that we pass our fake wisdom to the next generation which completes the same loop to arrive ultimately at the same result.
Let’s go back to the very beginning. What men needed was not much in our early days. Every one used to grow their own food. Normally People would live around water. We needed horses to ride. Donkeys to carry our stuff. Goats and Cows were kept for their meat and milk. Small muddy houses to save us from cold winter and hot summers. Ultimately a companion who would be our partner in life and reproduction. The next generation would do the same. As we grew, our societies became a little more complex and we started to realize the importance of a fair judge who would be impartial and fair. He would straighten our matters out in case of a disagreement or conflict.
Earth provided enough to satisfy every man’s need, but not every man’s greed. There is no harm in accepting the fact that we are a bit greedy and want to store more than what we can consume. Acceptance is half the solution but let’s find out what a human really needs to survive these days.
Any citizen basically needs the following things to survive. This is the bare minimum which is absolutely required for any human being to survive and stay sane. In my view, if Governments are focused on providing this to most deservingcitizens at least there would be stability in the society.
Food two/three times a day depending on your metabolism.
Basic education so that a man can find out more if he wants to.
Shelter for himself and his family.
Treatment in case of emergency.
Protection from oppression and provision of fairness/justice.
But economists want men to have purchasing power so that they can continue to spend. Economists would tell you that a prosperous economy requires that workers should be able to buy the products that they produce. In an ideal world, people would make enough money and then spend it so that economy can keep growing. That is not true anymore. Because we will see more and more labor jobs disappear due to automation. 40 million jobs in retail are threatened in US as e-commerce is spreading fast. 5 million jobs will be gone when self-driving trucks replace drivers and the list goes on and on. Businesses have learned to do more with less and they continue to raise their productivity with new technologies such as cloud, big data, analytics and robotics. Our governments now need to evolve and understand what is coming their way. Less employed people means less taxes/revenue. So no one can now afford trillion dollar defense budgets. Governments also need to build better safety nets to keep these unemployed people away from lives of crime, instability and insanity. In my opinion, Governments all over the globe need efficient systems which can at least provide basic above mentioned requirements of life to struggling citizens just to keep order in the society. Once a citizen gets a basic safety net then he can be further encouraged to become a small business owner/entrepreneur instead of a job seeker through microfinance or skills based trainings.
Western societies these days are so worried about inequality that crony capitalism has brought to their doors. Americans know they live in a two-tier country — one where the super-rich are leaving the rest of us behind because 400 of the richest people control the same amount of wealth as 150 million others. Extreme inequality can also ruin democracy. It’s no secret money rules politics in America. Obama spent $1.1 billion to win the 2012 presidential race. It is like marketing a new smart phone which has a $500 million marketing budget which can buy glittering advertisements and smart number crunching. These days best marketing wins and there is little focus on how president will fulfill his promises after he is elected. Then you wait for another 4 years for the same cycle to repeat again. If we compile the numbers on how many elected officials actually deliver on the promises they make before elections and how many great leaders democratic system has produced in last 300 years, it would definitely make an interesting reading.
Frankly, I am a bit tired of hearing about inequality. We are all born unequal. Some of us are born poor. Some are born good looking and some of us inherit massive amount of money and power. Some are introverts and some have extraordinary intelligence. It is absurd to even try to make men equal because all men will never be equal. This road takes you to socialism which is itself a proven failure. Inequality isn’t a moral problem; opportunity is. Everyone should get opportunity to change their life. In western societies, there is still large amounts of technical capacity available so that population can adjust to the coming economic shifts. But largely the world is flat now. Any country who accepts change quickly and adapts accordingly should have a bright future ahead of it. People like businesses also need to upgrade their skills in the iEconomy. We should also learn to share instead of owning everything. We must also learn to do more with less. Right now, we buy too much and we are prisoners of our own stuff.We carry the weight of more than what we need. The old school economics which tells you to buy your way out of recession is absurd in this age.
Now let’s get down to what Governments should measure as a primary indicator of social wellbeing? GDP can never be a key indicator of any country’s standard of living.How can the number of goods or services produced determine the quality of one man’s life? Only an Economist can come up with the answer.
I think what we need to measure are the following statistics. In my view, if a Government knows these 7 (seven) numbers and is responding to improve them. Then that is the best measure of country’s standard of living.
- How many people are getting clean drinking water and food minimum two times a day?
- How many kids have the basic education to fulfil their curiosities?
- How many people are without emergency healthcare?
- How many crimes are direct or indirect results of lack of above 3 mentioned points?
- Is there fairness in society? Rewards for those who do well and Punishments for those engage in harmful acts. Number of convictions in a year and annual number of awards/incentives can be measured easily. What is also important to measure is how much time it takes to get a reward or punishment for a good or bad deed in the society.
- Are there sufficient places where people can go with their families to relax? And are there enough playgrounds where kids are playing?
- How many people remained happily married throughout a year? And how many got divorced and for what reasons?
When the solution is simple, God is answering. We live in the age of gigabit internet, big data and social hyper connectedness. How difficult is to get this data and then act on it? It should not be a problem for most governments. Technically speaking this should be fairly simple but difference between a successful government and other is not a lack of strength, not a lack of knowledge, but rather a lack of will. Ultimately, it boils down to who you choose as your leader because People buy into the leader before they buy into the vision.
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