03/11/2016 04:55 am ET Updated Mar 11, 2017

It's not the Economic Growth model, it's you

By Märtha Rehnberg & Emil Stigsgaard Fuglsang, members of the St. Gallen Symposium's global Leaders of Tomorrow community

The economic growth model demands more sophistication than we award it

Dear economic and political leaders,
The term "economy" is originally Greek, and means household management. As a global leader, you share responsibility for the proper management of the household that is our planet, but the majority of you are currently doing a poor job. Under your management, our household is gradually deteriorating because of man-made climate change, and we are leaving an enormous bill for our next residents. When you discuss economic growth, you therefore must accept that we are not growing. Rather, we are shrinking the ability of our household to support the existence of generations to come. Take a pause, and consider the practical and moral implications of this.

Most often, we debate whether to abandon or stick to the economic growth model. The answer, however, lies elsewhere: We need to stop focusing on the model, and start focusing on its users - you, our global leaders. Many economic activities create externalities that can be harmful to third parties. It is your responsibility to ensure the existence of a sophisticated market, in which externalities are priced correctly, and no damage is left unsanctioned. You and our bureaucracies are failing completely at measuring and sanctioning the destruction of common resources, and for this reason, you do not understand the real costs of carbon-based economic activity. In other words, our use of the economic growth model is like a game of blindfolded destruction derby: unsophisticated, stupid, ultimately doomed, but fun while it lasts...

So how do we stop the madness? The key to enriching the growth model with its necessary nuances may be closer than you think. At your disposal is an advanced institutional system, extensive bureaucracies, and data that grows exponentially by the day. Your instruments are already completing complex tasks such as tax collection, accounting, and credit rating to sustain and integrate open market economies. The Financial Crisis took most by surprise in 2008, but within years, not decades, extensive measures had been taken to stabilize the system. You have the muscle power to monitor, analyze and regulate economic transactions on a global scale. You can do the same with economic externalities. When you account for the real cost-side of the growth model, the consequences of our actions will be inconveniently clear, and change will come about. Most radical innovations come from constraint, and once we gain the insights to understand the state of the household, human ingenuity will bring about solutions as always.

Our proposition implies that you as leaders evolve from the simple and unsophisticated users of the model you are today. The first 'super users' of the economic growth model will be those of you that transform it from a primitive concept to an operational framework, based on science and data, and supported by even stronger institutions. Your audacity as leaders will be rewarded by a generation of young people that, like in so many other cases, already understand the technology better than their parents do.

Growth - The good, the bad, and the ugly will be debated in the light of the 46th St. Gallen Symposium (11-13 May 2016).