Book

Human-Centred Economics: The Living Standards of Nations

This book engages in a fundamental reflection regarding the chronic underperformance of economies with respect to social inclusion, environmental sustainability and human and systemic resilience. It argues that macroeconomics itself requires structural reform and rebalancing in a century facing the prospect of further inequality and disruption from artificial intelligence and machine learning, climate change and other shifts and shocks.

The essential principle the book posits is that the living standards of median households deserve at least as much direct policy attention and cultivation by economists and policymakers as the overall wealth, or productive output, of nations. Broad progress in the lived experience of people, rather than GDP growth, depends on the strength of both markets of exchange and institutions in such areas as labour and social protection, financial and corporate governance, competition and rents, infrastructure and basic necessities, environmental protection, anti-corruption, and education and skilling.

The book integrates these and other key institutional dimensions of the social contract into the heart of macroeconomic theory on a co-equal basis with the traditional factors of production of the aggregate production function. Extensive comparative data are presented demonstrating that nearly every country has considerable policy space to narrow its social “welfare gap”—its underperformance on key aspects of household living standards relative to the frontier of leading outcomes and enabling policy practices of peer countries—and that doing so can often also help to reduce its output gap, or underperformance on growth. Major corresponding reforms of the international economic architecture are proposed to refocus them on supporting societies and the biosphere in this journey—a “Roosevelt Consensus” to replace the still reigning Washington Consensus—including a tripling of international development and climate finance from 2024 to 2030.