Last week, we learned President Obama had nominated Jim Yong Kim to head the World Bank. However, Kim, the rapping space man president of Dartmouth College, is not without controversy.
At issue is a book titled Dying For Growth: Global Inequality And The Health Of The Poor, reports The Financial Times‘ Robin Harding.
In order to get the gist of the book, you only need to see this one quote from the introduction:
The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.
So, there’s your controversy.
Harding’s article quotes an NYU economist in her article:
“Dr Kim would be the first World Bank president ever who seems to be anti-growth,” said William Easterly, professor of economics at New York University. “Even the severest of World Bank critics like me think that economic growth is what we want.”
Obviously, context is everything. From Harding’s article:
But colleagues of Dr Kim and officials at the US Treasury said that when taken in context he was simply arguing that the distribution of gains from economic growth decides whether it makes life better for the poorest. They pointed out that such criticisms were widespread in the late 1990s and the World Bank had since changed its practices to take account of them.
Perhaps there’s a lesson to be learned here. And that lesson is that GDP growth isn’t everything.
Let’s consider our own recovery for a moment.
As modelled behaviour’s Karl Smith puts it, we seem to be experiencing a “GDP-less recovery”: a recovery marked by strong job growth, anemic GDP, and flattening corporate profits. This is a play on the popular “jobless recovery” theme, which was used to describe the phase of the recovery where GDP and corporate profits soared as the labour market went nowhere.
One wonders what would be the better world. One where most people are working and GDP growth is relatively slow? Or one where GDP is surging while employment rates drop and poverty rises?
Maybe it’s time to reconsider how we measure economic prosperity.