Measuring Success: Off The Decrepit Track

“Not everything that can be counted counts, and not everything that counts can be counted.“

  Albert Einstein

Perhaps catalysed by the collapse of Western-style capitalism and with memories of a similar ‘micro-quake ‘ occuring in Asia in the past, there is a widespread call to implement a universally-recognised index of a nation’s health to replace the old and seemingly-decrepit Gross National Product (GNP).

First developed and established by United States and United Kingdom economists in the Depression years of the 1930’s, the United Nations System of National Accounts (U.N.S.N.A.) was intended to measure levels of employment only.

With the advent of war on a global scale, however, all belligerent nations eventually demanded to know the quantity of each bolt, bullet and bomb being manufactured. This led to a part of the U.N. measure, G.D.P., being blown out of all proportion, according to critics.

The U.N.S.N.A. has been extolled by the U.N. Department of Economic and Social Affairs Statistics Division as “…a coherent, consistent and integrated set of macroeconomic accounts, balance sheets and tables based on a set of internationally agreed concepts, definitions, classifications and accounting rules. It provides a comprehensive accounting framework within which economic data can be compiled and presented in a format that is designed for purposes of economic analysis, decision-making and policy-making.”

Former New Zealand M.P. (and renowned maverick, at that), Marilyn Waring – one of G.D.P.’s most persistent and vociferous detractors – describes in more digestible terms as “… the internationally-recognised system for measuring and recording the values that economic theorists have observed.”

Ms Waring has two main objections to the universal adherence to the U.S.N.A. in general and the adulation of G.D.P. in particular.
 
Firstly, that it takes no account of numerous valuable assets and activities such as rivers and forests (not under harnessed for gain), caring for one’s own children, food and vegetables husbanded by one’s family and hunting, fishing and trapping one’s own food.
 
In many (if not most) countries, the ‘working’ population – that is, those engaged in financially-remunerative activities – is remarkably small; Canada, for instance, has just over half of its poulace is “gainfully employed”. These are within the “production boundary” – areas measured or counted in national accounts.

What, then, of children, retirees, the disabled, stay-at-home parents, the unemployed and the sick people, students and people in training programs, unpaid caregivers and other volunteers. And what are those “gainfully employed” (probably working only eight to ten hours each day) doing for the remainder of their leisure time?

The U.N.S.N.A and its defenders (under heavy siege following the Wall Street wipeouts) has no convincing answers to such irritating and uncomfortable questions.

Secondly, it blithely leaps into areas of irrationality and unreason in placing consumption and depletion of resources such as oil and wood as income while acts of maintaining or expandiing resources are given either no value or accounted as debits!

The reverence given to G.D.P., particularly by grandstanding politicians, associates every issue with the question “Will it hurt the economy.” It and they value only the ‘growth’ produced by employing people to cut down trees or sell more gas, valuing the exploitation of the Earth whilst submerging the benefits of sustaining the Earth over the long-term.

The world has also come to view exploitation of aboriginal peoples and their lands, free trade in nations with significant shortages of essentials, the construction of more and larger prisons as preferable to reducing rates of imprisonment and the provision of skeletal social amenties and assistance as not only acceptable but near mandatory.
 
Iniquitous income distribution is, for the most part also either downplayed to vanishing point or overlooked entirely.

Such stark limitations of the U.N.S.N.A. and its G.D.P. in particular GDP as a measure of well-being in our country leads Waring (and others) to ask who the U.N.S.N.A. is meant to benefit. If it is to be used as a tool, then “As a tool for whom? The tool is certainly not meant to be used for women, the environment, or the poor?”

Better yardsticks are out there – measures of mental and physical health, opportunities and relationships and not solely the size of savings and investment accounts – and are to be found in the unlikeliest of places, such as Nova Scotia (the Genuine Progress Index) and Bhutan (General Happiness Product).