Modern Mining August 2025

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We really need to move away from our GDP obsession By Dr Ross Harvey, director of research and programmes at Good Governance Africa (GGA)

We start accounting differently for our exploitation of nature.

Dr Ross Harvey, director of research and programmes at Good Governance Africa (GGA)

I am trained in neoclassical economics. That sounds like a confession now, almost like being at an Alcoholics Anonymous. No judgement here, then. But having this training meant that I probably imbibed the view that GDP growth – the endless expansion of the size of our economies, measured as the total value of goods and services sold in a country in any given year – was an inevitable good. In other words, as long as a country’s GDP growth rate exceeded its population growth rate, all would be well. The conventional wisdom was that if one had fast enough GDP growth, employment creation would follow, average incomes would rise, and poverty and inequality would be diminished The problem is that jobless growth has been the story of many countries over the last thirty years, including South Africa. And this points to the need for moving away from GDP as a measure of a country’s wellbeing. Multidimensional poverty, or the Human Development Index score are just two options among many. But even those might not get us away entirely

from destroying our environment. In the two decades since I graduated, I’ve worried increasingly about something economists call ‘negative externalities’. These are environmental and social costs created in the process of production that are literally external to individual firms’ financial statements. They are externalised – offloaded by factories onto local communities and ecologies who can least afford it. Technically, these externalities are the divergence between social costs and private returns. The firm (let’s use Apple as an example) reports profits from selling its iPhones. But the costs to the local communities from all the minerals and metals mined to forge that iPhone are not recorded anywhere except in the misery of those who have to drink poisoned water or work those mines for local militias. And when we buy those phones – I confess to owning one – we don’t ask where everything in the supply chain came from. We don’t wonder about the energy used to produce it, the carbon emitted in distributing it across the world, the trees that were

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