True Cost Economy
True Cost Economy
CAMPAIGN: Ethical Finance, Business, and Economics
Sustainability advocates throughout the U.S. agree that the Gross Domestic Product (GDP) as an insufficient measurement for our economy, as it does not accurately reflect the cost of negative externalities associated with goods and services. By valuing volume over quality, performance, and sustainability, we’ve created a faulty metric that ignores externalities such as basic environmental services (clean air, fresh water, productive soil) and factors that determine our quality of life (sense of purpose, healthy bodies and ecosystems, and vibrant community interaction), resulting in a skewed assessment of our balance sheet.
In an effort to measure the true prosperity of countries across the globe, the Legatum Institute developed the 2013 Prosperity Index, which ranks countries based on 8 main categories (economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom, and social capital), using 89 metrics including affluence, productivity, happiness, and sustainability.
The index places importance on dynamic economies with ample opportunity for entrepreneurial activity, low costs for business start ups, close communities with high levels of trust, and quality governance. The Scandinavian countries—Norway (1), Sweden (4), Denmark (6), and Finland (8)—stole the show. Switzerland (2), Canada (3), and New Zealand (5) rounded out the top 5. The U.S. came in 11th.
Perhaps more interesting than Legatum’s ‘Top 10’ list was the accompanying ‘To Watch’ list, in which countries with emerging economies like Bangdesh, Indonesia, South Korea, Uruguay, and Senegal joined countries with exploding economies like Germany, Sweden, and Slovakia. Together, these countries are predicted to influence “a new economic world order”.