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Skip to 0 minutes and 5 secondsSo let's talk about economic growth. Economic growth is important in all economies, but it's not everything. We can see that when jobs move abroad or when regeneration projects take place and people are displaced, they don't just want to be better off economically, but they also want to flourish in some important ways. And when that doesn't happen, what happens is that people feel that there is a lack of voice, that they're not being heard, they're not being responded to. And we've seen lots of examples of that recently. We can call this if you like, the democratic deficit. That means focusing on GDP growth to the expense of other things in life that are really important.

Skip to 0 minutes and 46 secondsWhat we need to think about now is how do we deal with people's disillusionment, with their political anger, with their sense that they have been left behind. For the very first time, in the G20 countries of the world, people are beginning to realise that their children might actually be worse off than they themselves have been, and this creates a sense of disillusionment, of lack of hope, of lack of aspiration. And this in itself is something that makes people feel less prosperous.

Skip to 1 minute and 16 secondsSo people who are critics of the position I've just laid out, often say, what you have to realise is that economic growth trickles down, that if we can get some economic growth, then even those at the bottom will do well. Sometimes this is explained using a different metaphor, the idea is that all boats will float up as economic growth raises the water level, if you like, of GDP. But actually what we see in societies is that this is not the case, that things do not trickle down to the poorest because inequalities, differences in the political economy, that's the way resources are distributed mean that not everybody benefits from the growth that comes in to any social or economic situation.

The Democratic Deficit

In this video, Professor Henrietta Moore explains the concept of the democratic deficit, and asks how the way we think about the economy may be linked to the growth of populism and anti-establishment feeling.

The democratic deficit comes from a focus on GDP growth at the expense of other important things within a societal context. It means an increasingly small portion of the economy determine a huge amount about the way things are. This emphasis on GDP is causing a democratic deficit, as people feel less in control of the important part of their lives.

We have been following an economic model that takes power away from people in their everyday lives. When the size of the economy is the only thing that matters, decisions are made on the basis of GDP growth, not what people actually want. Despite countries being richer than ever, too many people are being left behind. Too many livelihoods have been sacrificed for national GDP levels. Prosperity is promised, but insecurity, desperation, and in-work poverty grows.

When economic growth is prioritised over peoples lives, it creates disillusion and anger with politics. Do you think recent political vibrations are due to economic hardship?

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This video is from the free online course:

Global Prosperity Beyond GDP

UCL (University College London)