Like the seasons, as each trimester ends mathematical minds across the globe rush to crush numbers calculating how their local economies fared. Is it growing? Shrinking?
A simplicity we strive for in life: an equation gives us a big number we can use to guide our decisions going forward… after all numbers don’t lie!
Right?
Well, when we choose what to count then the answer may just be a lie. Or fake news!
To do the math for Gross Domestic Product we add what was produced in a country or region: what was made in factories, dug out from mines, grown in commercial farms.
Or we add everything that was purchased on the other side – – in theory it should be the same result. Things just have to have a cash value, and a legal one, to be added.
Only this beautiful equation is no longer a metric, it has become a goal in itself and a dangerous one because of what it leads us to prioritize.
What stay-at-home parents do to raise the next generation of productive workers, the ones that will pay for our retirement, doesn’t count. The street vendor doesn’t count either because he or she is not an established commercial enterprise. Drug dealers and smugglers move billions in production, wholesale and retail while providing jobs – – not saying these are good jobs – – for millions of people. That doesn’t count either.
Just leaving out informal and illegal ventures already makes for a pretty fictitious number in many places but on top of that many costs are never subtracted. How much does poverty cost a society? What is the cost of pollution, all those car and factory emissions that blacken city walls and people’s lungs? How much do we pay to live with tons of waste, from packages to designing products that don’t last so people can buy more, all piling up in landfills, or killing our oceans?
(And there are spin masters suggesting more consumption to increase recycling…)
Even the dear cost of crime and violence, all those productive lives lost are just a tear, not a guiding light for economic policy.
Oh, wait.
If a place is bombed the material losses may be counted, but rebuilding and the sale and production of weapons adds a lot more to some economy somewhere.
Adding to GDP things like weaponry and car production means we incentivize those industries; and leaving out other things like quality of water, quality of infrastructure, non-commercial cultural expression or even health means these become unimportant from an economic policy point of view.
A hydroelectric dam may displace entire populations that can become beggars and homeless and a cost to society and municipalities but while the energy created is seen as contributing to the economy, other consequences are not counted. The loss of a subsistence economy is not deducted; it lacks a market price and therefore doesn’t exist even if it was a food source for families. The loss of wildlife, natural cycles of reproduction, land fertilization, erosion – none of this subtracts from GDP. Even our agricultural production has lost its focus on feeding and clothing to target (short-term) financial returns alone.
We are using cash value as a yardstick for life and that endangers wellbeing, the environment and ultimately life on earth.
As we learn in the Hitchhikers Guide to the Galaxy, the meaning of life is 42. We like simple, unquestionable answers; a number is a number, an irrefutable truth but if we guide our society by calculating randomly chosen numbers, we will get 42.
No yardstick will be perfect and guiding decisions by one measure alone seems silly and dangerous. If we need to use metrics and acronyms to help our brains decide what to do, there are options out there we can use together to form a slightly better picture of a nation or region.
Can we look beyond GDP please? Even markets will fare better if we re-prioritize and keep the planet functioning.
My future grandkids thank you.
(If you love your metrics, here are a few links of many, an alphabet soup of indicators that add a bit of flavor to countries’ economic portraits: HDI , GINI, WHR , HPI )
Cecilia Tornaghi 