Big Ideas, Big Dreams - Katherine Trebeck
Economic Spotlight Series
This is the second in my six-part economic spotlight series: ‘Big Ideas, Big Dreams’. The series shines a light on the people who have inspired me and my work in the hope that their big ideas might also inspire you, your work and your big dreams for yourself and the world.
You can read about the series here and check out the first article all about Kate Raworth’s big idea for a Doughnut Economy.
The second spotlight in the series is on Katherine Treback and one of her big ideas, which is how we can measure what really matters in a mature economy.
Economic thinker: Katherine Trebeck
Katherine Trebeck is a political economist and founder of the Wellbeing Economy Alliance. She’s an advocate for a global shift to a wellbeing economy, one that is in service of people and planet, echoed by Kate Raworth’s Doughnut Economics.
Katherine has to be one of the most accessible economic thinkers I’ve ever come across. If you get a chance to listen to her, I’d highly recommend you give it a go. She’s able to communicate her big ideas in a way that is so relatable. With these talents of economic thinking and relatability, her ideas have been shared and spread across so many different groups, communities and governments. She’s the ideal person to lead the Wellbeing Economy Alliance, given how well she can get people involved and contributing to the idea of a wellbeing economy, helping each of us work out what this means in theory and practice.
Big idea: Measure what matters in a mature economy
No-one can be narrowed down to one idea, but the one I want to focus on is Katherine’s challenge to think beyond a singular, blunt measure to track our economic progress. She calls on us to think about what really matters: growth for its own sake, or true development. One of her intellectual heroes is Manfred Max-Neef, a Chilean economist. A quote from him that resonates with me is, “growth is not the same as development, and development does not necessarily require growth.”
Trebeck calls out the limitations of measuring GDP (gross domestic product) in an economy that is already developed, or ‘grown up’. Many developed economies have high GDP, but scratch the surface of that growth, and there are some terrible outcomes, like poor health and poverty for whole communities in the population, or huge loss in biodiversity of the land. Clearly then, GDP can’t tell us a reliable story about the real richness of the economy.
A quick recap of GDP: Almost a century ago, when GDP was conceptualised by Kuznets in the US, it was in the context of the Great Depression. Policy makers were looking for ways to measure how the economy was fairing in some of the toughest conditions they’d ever witnessed. Kuznets was at pains to point out, right from those earliest days of GDP measurement, that it was a very limited measure and needed to be viewed in the context of other measures too.
However, those warnings were largely unheaded and over the decades since, almost entirely neglected. GDP measures economic transactions in an economy, whether they’re good, bad or plain ugly. GDP views all these transactions, dollar for dollar, with equal value:
People choosing to eat out at a new restaurant in their neighbourhood because it’s supplied only by locally sourced ingredients
The purchase of a new washing machine because the broken part required to fix the old one is no longer available
The hiring of new prison officers because the prison population has grown significantly
Looking at these three simple examples, you will have your own thoughts about which transactions reflect positive economic development, worthy of celebrating, and which do not. The problem with GDP is that it shows us the price of everything but the value of nothing.
Beyond GDP: Trebeck suggests that other measures, beyond GDP, track true progress in a developed economy and can serve us better. One of her favourites is the measure of ‘how many girls cycle to school each day’. At first glance, it might seem like a strange measure, something out of an idyllic storybook, La La-Land even. But pause for a moment and think about what has to be true in a society for that measure to be high and growing.
Girls are going to school every day (often lagging behind boys school attendance)
Children live close to their school and community
It’s safe enough for children to cycle around their local area
Families have the resources for their children to learn to cycle and have a bike
Children get regular, daily exercise
If we start to measure differently, we might get more of the outcomes we truly value, rather than a clumsy proxy that can hide a host of outcomes, many of which we would rather go without.
Why it matters
At both the macro (country) and micro (business) levels of the economy, we can take Trebeck’s ideas on board. A country’s focus on GDP is a bit like a business’s focus on profit. They’re important, but they’re not enough on their own: necessary but not sufficient.
What we measure is what gets our focus, whether it’s our time, attention, money or energy. How do we take the time to think about what we value and use that to inform what we actually want to measure and focus on?
These ideas are filtering through the macro and the micro levels already. Whether it’s at a government policy level or our own organisation, it’s inevitable that each of us will become more familiar with how to broaden out what we measure and what matters.
At the macro level, over half of all OECD countries now have a wellbeing framework in place to help shape and measure broader economic outcomes. Aotearoa New Zealand was the first country in the world to formally adopt this idea with the Wellbeing Budget in 2019 and each year since.
At the micro level, changes are also underway with boards looking at their organisation’s impact beyond financial returns. Mark Carney led the Taskforce on Climate-related Financial Disclosures (TCFD), who created climate disclosure standards for board reporting. Their standards have been mandated in seven countries already, with Aotearoa New Zealand being the first to sign up. No longer is profit the only thing that matters, but the impact and response to climate risks must also now be taken into account. There’s also a growing number of what Katherine calls “pro-social” businesses. They’re regular, for-profit companies, but they’re thinking about their profit with social purpose in mind. They’re considering the impact their business has on the community it operates within, its customers, its employees and supply chain.
How might this influence you and your work?
Whatever your work, whether you’re working at a government level or in a business, what you measure matters. It’s a good time now to take a fresh look to see where you could dive deeper or go broader than you have before. What opportunities could you create so you’re truly measuring what matters?
Here are some questions to help you get started:
What is your organisation focusing on?
Does that focus reflect what matters most?
How does ‘what matters most’ change when you consider your:
Personal values?
Shareholders?
Customers?
Employees?
Communities you operate within?
Supply chain?
Other stakeholders?
Natural environment?
What are you tracking in the work you do?
What are you neglecting to measure?
What is the risk of that?
What would you measure if you weren’t afraid of the story it might tell?
What could you try next to refresh what you measure?
Here’s how it impacted me and my work
Katherine Trebeck’s work has inspired me enormously in my work. Her book ‘The Economics of Arrival’ was published in 2019, the same year I became self-employed and started my own small business.
One thing that put me off starting my own business was safeguarding against the worst version of myself. The one that is ego-driven, wants success in its narrowest form with status, money and acclaim. Katherine’s ideas have shown me that economies and businesses can be a force for good, for people and the planet, if they’re brave enough to focus on what truly matters, not narrowed down to what our ego might be happy with.
I work with organisations who want to offer more than short term financial success. They see that financial sustainability is necessary but not sufficient if they want long term viability.
Katherine talks about how no-one can do this work alone to create a wellbeing economy and measure what matters, but we can each do our bit. I’ve taken that to heart and worked out how I can best contribute using what I know and do best. I’ve chosen to create a better future of work through developing workforce strategy and flexible workplaces, both important areas of focus if we’re going to arrive at a wellbeing economy.
I also monitor more than just financial performance in my small business. For example, when I train people to manage a flexible team, I measure the impact of the training so I can see the difference it has made to them and the people in their teams to for more flexible teams that are healthy and productive.
So what now?
What has Katherine Trebeck’s work got you thinking about? Will you finish reading this and move onto the next thing on your to-do list? We are all busy and there is always so much to do, so I completely understand that choice. No judgement from me there!
Or will you pause for a moment and make a decision to come back and give this some more thought? Maybe you could ask some of the earlier questions of your team and other colleagues to get you started.
I hope you do find the time to come back to this. Today, tomorrow or sometime soon.
Working towards a wellbeing economy by matching our measures with what really matters is another big idea that fuels my big dream for the world.
What about you?