Magazine article Alternatives Journal

New Beans to Count: Researchers Apply an Innovative Set of Biophysical and Social Indicators to Rank 180 Countries

Magazine article Alternatives Journal

New Beans to Count: Researchers Apply an Innovative Set of Biophysical and Social Indicators to Rank 180 Countries

Article excerpt

BEFORE HE BECAME prime minister, Justin Trudeau remarked in an interview with Maclean's magazine, "There are a lot of people out there, environmental thinkers like Herman Daly and others, who talk about the fact that maybe economic growth within a finite system is not either possible or even desirable." Trudeau is referring to our society's obsession with measuring how well we're doing based on economic growth, and how this doesn't really do our country justice.

For example, the work of a stay-at-home-parent is tough, and often thankless. And, using the lens of gross domestic product to measure the progress of a country, this work is also invisible. To show up in the national tally of useful activity, parents need to find jobs and send their children to daycare.

Gross domestic product (GDP) Is an indicator of economic activity--of money changing hands. If you buy a beer or a new bicycle, this adds to GDP. If the provincial government invests in education, this also adds to GDP. Most people would argue these are good things. However, if there is an oil spill from a Kinder Morgan pipeline, any government clean-up cost also adds to GDP. If more couples get divorced and incur costly legal fees, then this adds to GDP. Even the $5.3 billion that will be spent rebuilding Fort McMurray will boost Canada's GDP, according to the Conference Board of Canada, although few would call this economic progress. The problem is that GDP does not distinguish between "good" and "bad" economic activities. It treats both the same.

And yet at the same time, many forms of socially beneficial activity, like household and volunteer work (including child-rearing), are not counted towards GDP because no money changes hands.

Many economists and other social scientists are critical of using GDP as a measure of national progress. Even Simon Kuznets, the creator of the national tallying system that led to GDP famously warned: "the welfare of a nation can scarcely be inferred from a measurement of national income." More recently, a commission chaired by Nobel Prize-winning economist Joseph Stiglitz concluded that the system of national accounts should shift Its emphasis from measuring economic production to measuring people's wellbeing in the context of sustainability.

Why is this change important? Pursuing GDP growth as a national policy goal has two main problems. The first is environmental. As the economy grows, we use more resources and produce more wastes. Up to a point this is not a problem, but we're now living in a world where the scale of economic activity is interfering with critical earth-system processes. A major study published in the journal Science attempted to define the "safe operating space" for humanity on this planet. The authors identified nine planetary boundaries related to key earth-system processes. They concluded that humanity is currently surpassing at least four of these critical boundaries--those related to climate change, biodiversity loss, land use change, and blogeochemical flows (nitrogen and phosphorous). The authors warned that transgressing one or more of the boundaries could lead to catastrophic changes at the continental to planetary scale.

The second reason to question growth is social. Data on happiness and life satisfaction are now widely available from surveys such as the Gallup World Poll and World Values Survey. In these surveys, people are asked to rate their level of life satisfaction on a numerical scale (from 0 to 10 for example). If we look at these data over time in wealthy countries like Canada, we find that although GDP per capita has more than tripled since 1950, people have not become any happier. If we compare data across countries, the picture Is a bit more complex. Happiness and life satisfaction do tend to increase with income, but only up to a point. Richard Layard shows in his book Happiness: Lessons from a New Science, first published in 2005, that beyond an average income of about $20,000 (US) a year, additional money does not buy additional happiness. …

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