It’s the economy, stupid

To get the change we want, adopting GPI is a great first step

Karl Marx. Maybe there should be three Xs after his name, because I’m sure I’ve lost (or gained) a lot of readers already.

Marx is known for his emphasis on the economy as being the basis of how a society functions. Although his political works are highly contestable, they drive home the important point that since the economy encompasses so much, we should base our arguments around it when trying to bring about large-scale change.

As many people know, we need to reform the economic mantra that more production and more consumption equals a healthier society. Many different types of communities are using this argument to question leaders of government, pressuring them to address high-priority issues such as climate change and poverty.

One crucial thing that we should pressure the government for is the adoption of an alternative economic indicator, such as the Genuine Progress Indicator (GPI).

Currently, we measure the progress of our economy with the Gross Domestic Product (GDP) formula, but this is a dead end when trying to gauge the realities of the health of our society. It doesn’t take into account the negative impacts of consumerism, such as environmental degradation, crime rates and poverty rates. Additionally, it doesn’t account for certain positives, such as volunteer work or un-paid domestic work efforts.

Thirty-two years ago, the designers of the GDP, Simon Küznets and John Maynard Keynes, warned about using it to measure the welfare of a nation. In Küznets’ words, “the welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP … goals for ‘more’ growth should specify of what and for what.”

The GPI does exactly this and it can very well be the answer to large-scale change. It has been praised by economists, a variety of high-profile policy think tanks and even the scientific community. There are hundreds of different variations of GPI, most of which focus on different specifics under the GPI tree, ranging from free-time indicators, to oilsands impacts, to poverty and even to suicide rates.

It takes into account the same personal consumption data as GDP, but also considers other values as well. It considers factors such as income allocation and household and volunteer work, but then also subtracts variables like the costs of pollution and crime.

Because it accounts for so many variable economic factors, the benefits of using a GPI method of economic analysis are nearly endless.

One example of its benefits is that it would help curb the negative behaviour of major corporations, who tend to get away with a lot due to their political clout. The top 200 corporations in the world control nearly 30 per cent of the world’s GDP.

Because of these corporations’ positive impact upon GDP measurements, governments can always defend them by utilizing GDP data. This is particularly the case with the Alberta tarsands. But if we measure the work of tarsands companies in GPI terms, these companies will have to account for greenhouse gas emissions, wildlife destruction, as well as the societal degradation of native communities in the area. Most importantly, it will better inform the public about the reality of the tarsands.

GPI is not a radical movement away from capitalism. No proletarian revolution is required to put it into use. But adopting it is an essential first step in getting the change we need in our world today.

How can we expect to see change if our government doesn’t have a way to measure it accurately?

So read more into it. Then when you’re debating politics, you can pull out this argument.

The economy is everything and here’s a feasible way we can start with change.

Matt Austman is a politics student at the University of Winnipeg. This article is the second part of a look at the drawbacks of the GDP economic indicator. Check out the first article at www.uniter.ca/view/1951.

Published in Volume 64, Number 13 of The Uniter (November 26, 2009)

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