East London Business Place, Heron Quays in London Borough of Tower Hamlets, London. Wikicommons/Chmee2. Some rights reserved.For a long time, we have let our societies and economies become little more than engines of GDP growth. The base assumptions of most economists today remain grounded in early twentieth century theories, espoused by predecessors who yearned for their profession to be viewed as an exact science like physics or chemistry.
Free markets, the theory went, provided the most efficient means for distributing resources across societies, with supply and demand creating a natural equilibrium to drive overall output, or GDP. Therefore, GDP per capita could be seen as a proxy for the health of an economy. In this model, people are reduced to individual units of production denominated in dollars.
But despite this orthodoxy becoming pervasive, we now understand that markets are imperfect and that average levels of GDP mask huge inequalities. In the US, for example, income disparities have become so pronounced that America’s top 10 per cent now average nearly nine times as much income as the bottom 90 per cent.
