To bring back trust in politics, Britain needs a local measure of GDP

Sheffield by night. Image: Benedict Hunjan/Wikimedia Commons.

The Indigo Prize was created to find a better way of measuring the economy than the traditional GDP. In his entry, Tom Forth explained why the competition was asking the wrong question.

On 7 July, in the Financial Times, Tim Harford argued that the simplest innovations often create the most value. It’s a familiar and beautiful story, and it doesn’t take much thinking to agree that toilets probably matter more than a web-connected thermostat.

On 8 July, in the London Evening Standard, some of the the creators of the Indigo Prize explained why a better measure of progress than GDP is worth £100,000. And again, it doesn’t take much thinking to agree that what matters in our lives is family, friends, health, purpose, and happiness. They certainly matter more than the number of pounds in the national GDP measure that makes the headlines every quarter, and fills discussions in between.

There’s an important link between these two pieces. Here, in just over a fifth of the 5000 words that I’m allowed to win the big prize, I’ll explain it.

GDP works

Add up every hair cut, glass of water, pint of beer, bicycle tyre, bank account fee, pet insurance policy, bus journey, electricity bill, contact lens, tank of petrol, dentist appointment, pay packet, business investment, rent bill, and much much more, and you get a country’s GDP.

If you want to compare one country with another you adjust for the difference in how much things cost in each: that’s called PPP (“purchasing power parity”) or PPS (“purchasing power standards”). If you want to compare a country today with itself in the past, you also adjust for the difference in how much things cost: that’s called real terms or constant prices.

And if you make some adjustments for how well the GDP is shared within a country, you get inequality-adjusted GDP. Well, you would, if someone had invented it: I’m sure that The Indigo Prize will get many such suggestions.

But an inequality-adjusted GDP, or a sustainable GDP, or a fair-trade GDP are like the web-connected thermostats that many of us mock. They are complicated, exciting, new, fresh, and just not very important. They are what you get if you try and solve a problem with technology without asking the right people what the problem was.

GDP is a simple idea. The details are hard, but we’ve got good at them in the past 70 years or so. Most importantly, it works. Famously, the human development index correlates almost perfectly with it.

And when you think about it, the correlation shouldn’t be a surprise. People and societies prioritise the things that really matter to them. The more money they have, the more that they can do, and the further down their list of priorities they can get.

So GDP is a great measure of what really matters – as long as we trust people to spend their money on what matters to them. I do.


GDP is like toilets

What’s really lacking from our current measures of GDP is the same as what’s lacking with our current toilets. There are too many places where you can’t find a good one.

Today two-thirds of people have access to a toilet. It’s a remarkable achievement, but it’s not good enough. The unglamorous task of getting toilets to the remaining third of humanity matters more than almost anything else. Try Rose George's book Adventures in the World of Human Waste if you need convincing. You'll be convinced in the first chapter.

It’s the same with GDP. Today, the majority of people in the world have access to a national GDP measure. But far too few know how their local economy, and thus their wider community’s wellbeing, is changing.

For years I’ve built free tools that give people a slightly better idea of how their economy is doing. People in Wales can see how their economy came to perform as well as Estonia’s. People in Greater Manchester can see how their economy came to perform as well as Spain’s. People in South Yorkshire can see how their economy performs about as well as Portugal's.

And yet we know that these numbers aren’t good enough. They are available far too slowly; the best data we have for South Yorkshire's GDP today is from 2015. We will get 2016's estimates in December 2017. We also don’t collect enough data on consumption and production locally, we don’t look hard enough at what things people buy, and we don’t measure how much those things cost in different places. So our local measures of GDP don't take into account local inflation.

The ONS know this: its RSTI (Regional Short Term Indicators) project is trying to fix it, and in December 2018 England will get its first ever timely estimates of regional GVA. Still not quite GDP, but closer.

We need to go further, in more places, and all over the world. We need to make this a priority, because we have seen what happens when we cannot produce measurements that are relevant to the communities that people live in: they stop listening.

Fixing GDP

Fixing GDP is like fixing toilets. We need more of the same, not something new and fancy.

If Iceland can measure real GDP for its 330,000 people every quarter, and if Estonia can measure real GDP for its 1.3m people every quarter, then it’s not good enough that much larger parts of the UK, and many other parts of the world, have much worse data.

I’ll end with just one of the many reasons why I think that this is important.

Scotland calculates its own GDP figures and debates them vigorously. My home region of Yorkshire, with an equal population, doesn’t calculate its own GDP, and is rightly uninterested in the weak proxies that are available.

This matters enormously. GDP, the favourite measure of economists, isn’t relevant to the people of Yorkshire. It is certainly not relevant to the people of Bradford or Barnsley. And so, since everyone lives in a place not a country, UK GDP figures are not relevant to most of the UK.

People can feel this. They correctly feel that their lives are not reflected in public debates. This influences the trust that they have in economists, and in those politicians that rely on economists' arguments and data.

The UK has had two extremely important referendums in recent years. In the first, Scotland took the option recommended by most economists, to remain in the UK. In the second, Scotland again took the option recommended by most economists, to remain in the EU. But England, especially areas like mine in Yorkshire – those areas most poorly informed by the data collected by our national economists – took the option that most economists did not recommend. We voted to leave the EU.

If economists want people to listen to them again, they should dump plans for a new measure of well-being. To return to my analogy, they should stop dreaming about internet-connected thermostats and get on with building more toilets. They should make sure that never again do they talk about economic collapse in Greece while celebrating the UK's success, unaware that South Yorkshire's economy was collapsing nearly as quickly.

 Economists should use the methods that we already have to make GDP relevant to more of the people of Britain, and then spread this to more of the world. If the goal of economic measures is to inform people better about their current situation, then providing them with local GDPs will achieve much more than providing them with a national inequality-adjusted GDP, a national sustainable GDP, or a national fair-trade GDP. But as a suggestion, it’s not likely to win any prizes.

Sadly, this essay did not win the Indigo Prize.

Tom Forth runs a software company called imactivate and is an associate at ODILeeds. He tweets as @thomasforth. This post first appeared on his blog.

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America's cities can't police their way out of this crisis

Police deployed tear gas during anti-racism demonstrations in Los Angeles over the weekend. (Mario Tama/Getty Images)

As protesters took to the streets across the United States over the weekend to express their anger at police killings of unarmed black Americans, it was hard to miss the hypocrisy coming from local authorities – including the otherwise progressive, left-leaning officials who are in power in most major American cities. 

Many US mayors and their police chiefs had issued public statements over the past week that seemed – only briefly, as it turned out – to signal a meaningful shift in the extent to which the Black Lives Matters movement is being taken seriously by those who are in a position to enact reforms. 

The sheer depravity of the most recent high-profile killing had left little room for equivocation. George Floyd, 46, died last Monday under the knee of white Minneapolis police officer Derek Chauvin, while three additional officers helped to hold Floyd down, doing nothing to aid him as he begged for them to stop and eventually lost consciousness. The officers had been attempting to arrest Floyd on suspicion of having used a counterfeit $20 bill at a deli. All four have since been fired, and Chauvin was arrested Friday on charges of third-degree murder and second-degree manslaughter. 

“The lack of compassion, use of excessive force, or going beyond the scope of the law, doesn’t just tarnish our badge—it tears at the very fabric of race relations in this country,” Los Angeles Police Chief Michel Moore told the Washington Post in response to the Floyd case. Meanwhile Moore’s boss, Los Angeles Mayor Eric Garcetti, on Friday claimed that he understood why his city, which is no stranger to police brutality, was protesting. “We absolutely need as a nation, certainly as a city, to voice our outrage, it’s our patriotic duty to not only stand up for George Floyd but for everybody who has been killed unnecessarily, who’s been murdered for the structural racism that we have in our country,” Garcetti said. 

Normally, US police chiefs and mayors tend to ask citizens to withhold judgment on these types of cases until full investigations can be completed. But a 10-minute video recording of Floyd’s killing had made what happened plain. Police chiefs across the country – and even the nation’s largest police union, which is notorious for defending officer abuses – similarly condemned the actions of the Minneapolis officers, in a rare show of moral clarity that, combined with the arrest of Chauvin, offered at least a glimmer of hope that this time things might be different. 

As the events of the weekend have since shown, that glimmer was all too fleeting. 

In city after city over the past three days, US mayors and their police chiefs made a series of the same decisions – starting with the deployment of large, heavily armed riot units – that ultimately escalated violent confrontations between officers and protesters. Images widely shared on social media Saturday and Sunday nights made it clear that members of law enforcement were often initiating the worst of the violence, and appeared to treat protesters as enemy combatants, rather than citizens they were sworn to protect. 


In New York City, two police SUVs were seen plowing into a crowd of protesters, while elsewhere an officer was recorded pulling down a young protester’s coronavirus mask in order to pepper spray his face

In Louisville, the city where Breonna Taylor, a 26-year-old black woman was fatally shot by police on 13 March, state police in riot gear were captured confiscating and destroying protesters’ supplies

In Minneapolis, forces opened fire with nonlethal rounds on residential streets, much to the shock of homeowners standing on their own front porches. 

Images of police pushing or shoving peaceful protesters were almost too numerous to count, including, in Salt Lake City, an elderly man with a cane

In many places, police also targeted journalists who were covering the protests, firing at clearly identifiable media crews with rubber bullets, injuring and even arresting reporters

Some protesters did commit acts of vandalism and looting, and the leaders of cities where that happened generally responded in the same ways. 

First, they blamed “outside agitators” for the worst protester behaviour, a claim that harkens all the way back to the civil rights era and for which the evidence is murky at best

Next, they enacted sudden curfews with little to no warning, which gave law enforcement an excuse to make mass arrests, in some cases violently. 

In a pair of widely criticized moves, Garcetti of Los Angeles closed the city’s Covid-19 testing centers and suspended the entire mass transit system Saturday evening, stranding essential workers on their way home from daytime shifts. Late Sunday night in Chicago, the city’s public school system halted its free meal distribution service for low-income children, citing “the evolving nature of activity across the city”.  

Governors in at least 12 US states, in coordination with city leaders, have since called in National Guard troops to “help”. 

At this point it’s clear that the leaders of America’s cities are in desperate need of a radically different playbook to respond to these protests. A heavily armed, militarised response to long-simmering anger toward the heavily armed, militarised approach to American policing is more than ironic – it’s ineffective. Granting police officers wider latitude to make arrests via curfews also seems destined to increase the chances of precisely the tragic, racially biased outcomes to which the protesters are reacting. 

There are other options. In places such as Flint, Michigan, and Camden, New Jersey – both poor cities home to large black populations – local law enforcement officials chose to put down their weapons and march alongside protesters, rather than face off against them. In the case of Camden, that the city was able to avoid violent clashes is in no small part related to the fact that it took the drastic step of disbanding its former police department altogether several years ago, replacing it with an entirely new structure. 

America’s cities are in crisis, in more ways than one. It’s not a coincidence that the country has tipped into chaos following months of emotionally draining stay-at-home orders and job losses that now top 40 million. Low-income Americans of colour have borne a disproportionate share of the pandemic’s ravages, and public health officials are already worried about the potential for protests to become Covid-19 super-spreading events.

All of this has of course been spurred on by the US president, who in addition to calling Sunday for mayors and governors to “get tough” on protesters, has made emboldening white nationalists his signature. Notably, Trump didn’t call on officials to get tough on the heavily armed white protesters who stormed the Michigan Capitol building over coronavirus stay-at-home orders just a few weeks ago. 

US mayors and their police chiefs have publicly claimed that they do understand – agree with, even – the anger currently spilling out onto their streets. But as long as they continue to respond to that anger by deploying large numbers of armed and armored law enforcement personnel who do not actually live in the cities they serve, who appear to be more outraged by property damage and verbal insults than by the killings of black Americans at the hands of their peers, and who are enmeshed in a dangerously violent and racist policing culture that perceives itself to be the real victim, it is hard to see how this crisis will improve anytime soon. 

Sommer Mathis is the editor of CityMetric.