I’m reading Sacred Economics, by Charles Eisenstein (you will likely hear about this more than once, it being a longish tome of nearly 500 pages) and I’ve run across an interesting discussion of our Gross Domestic Product (GDP). Now I’ve known for years that GDP is a flawed measure of economic growth, in that really bad things like car crashes, epidemics, and oil spills all generate economic activity and thus contribute to GDP. GDP is basically a measure of transactions—of money flowing through the economy. Anything that increases the flow is good for the GDP, and anything that decreases the flow is bad. Eisenstein makes this very concrete and clear:
If I babysit your children for free, economists don’t count it as a service or add it to GDP. It cannot be used to pay a financial debt; nor can I go to the supermarket and say, “I watched my neighbors’ kids this morning, so please give me food.” But if I open a day care center and charge you money, I have created a “service.” GDP rises and, according to economists, society has become wealthier….
The same is true if I cut down a forest and sell the timber. While it is standing and inaccessible, it is not a good. It only becomes “good” when I build a logging road, hire labor, cut it down, and transport it to a buyer…. Or I can find a traditional society that uses herbs and shamanic techniques for healing, destroy their culture and make them dependent on pharmaceutical medicine that they must purchase, evict them from their land so they cannot be subsistence farmers and must buy food, and clear the land and hire them on a banana plantation—and I have made the world richer.
To continue to grow, more and more things must be monetized. Every time I pay someone to do something I used to do myself, that’s good for GDP. If I quit shoveling my elderly neighbor’s walk and they have to hire someone, it’s good for GDP.
There’s something seriously wrong when the fractionalization and breakdown of community is good for GDP. I like the idea of a Gross National Happiness (GNH) measure instead. The GNH is used in Bhutan, and in addition to economic wellness it also includes measures for environmental, physical, mental, workplace, social, and political wellness. Imagine using all those things in the measure of your country, instead of just money transactions. Imagine living in a country that really cares about its people and the environment.
I will be interested to see where Eisenstein goes with this. I’ve just finished the “problem” portion of the book and am moving into solutions. I don’t see Gross National Happiness in the index, but I will keep you posted. Here is a clue to where we may be headed:
“From each according to his abilities, to each according to his needs.”