This article was first published by the Canadian Centre for Policy Alternatives:
ccpa@policyalternatives.ca in The CCPA Monitor. Permission to reproduce
it is granted as long as this credit accompanies the article. The CCPA can
be reached at: ccpa@policyalternatives.ca
Measuring Well-Being in Canada
Natural Disasters, crime, illness "good" for the economy
When natural disasters are said to be "good" for the economy,
its time to review what good means.
Just after Christmas 1999, France was hit by two storms. Winds gusting
to 200 kilometers per hour killed 91 people, cut electricity off from over
three million people and left 360 million trees "ripped from their
roots or snapped in half". Damage is estimated at $11.8 billion dollars.
Insurance will cover around $4.7 billion, the Government will contribute
$2.5 billion and the remaining costs will be carried somehow by unfortunate
citizens. The vast amount of materials and labour needed to rebuild will
stimulate economic activity. As Denis Kessler, vice president France's equivalent
to Canada's Business Council on National Issues, noted: "This disaster
will be mostly positive in terms of Gross Domestic Product"
Gross Domestic Product (GDP), is the sum total of all the money exchanged
in a territory during a year. Since the measure was established after the
Second World War, GDP growth has come to dominant the goals of public policy.
The faster GDP rises, the better off we are supposed to be. If rising GDP
is good and the wind storms made the GDP rise, logic has it that the storms
were good for France?
The same logic was expressed following the Great Ice Storm that crippled
Quebec and Eastern Ontario in 1998 and numerous other disasters. Are we
to conclude from this evidence that we should cultivate disaster when the
economy needs a boost? It could be an amusing theme if it were not for the
widespread misfortunes which the same accounting regularly records as progress.
When pollution makes people sick, the cost of their medical care is
added to the GDP. The costs of replacing stolen property, purchasing security
equipment, trying people in courts and putting them in jail all contribute
to a higher GDP. Could it be that sickness and crime are not addressed at
their roots because of the economic 'stimulation' they provide?
GDP first gained prominence in the mid 1940s through a publication titled
"The British National Income and How to Pay for the War." Britain
adopted the measure and the authors were latter commissioned to produce
the "System of National Accounts" now used by all the members
of the United Nations. GDP helps identify where money is flowing for taxation
and other purposes, but we have to watch out for "good" disasters.
Joe Jordan, the MP for Leeds-Grenville in Eastern Ontario says: "Running
society attending only to GDP is like driving a bus looking only at the
speedometer." GDP has its place, but there are other details needed
to measure well-being. GDP attributes no value to unpaid work in homes and
communities yet we are poorer when this work stops. GDP also ignores the
effects of pollution and the state of natural resources. The failure of
the East Coast Fishery illustrates the trouble with such oversight. According
to its contribution to GDP the fishery was getting better and better and
better in the years leading up to its collapse. If we had had a measure
that considered the declining fish population, the people involved could
have taken steps to correct the decline before it became perilous.
Improving how we measure progress is the purpose of the Canada Well-Being
Measurement Act" which Mr. Jordan introduced in the House of Commons
in early Spring 2000. Conceived during a 1997 election debate with Green
Party Candidate Dr. Peter Bevan-Baker, the Act calls for an inquiry into
what Canadians feel indicates well-being. How do we distinguish what is
good from what is bad in our lives? What would indicate that the prospects
for our children's lives are improving, or, at least, being maintained?
Given public input to keep the measures relevant to people's experience,
Canada enjoys some of the leading edge expertise in measuring well-being.
Statistics Canada is world renown for gathering information on many aspects
of Canadian society. The GPI Atlantic project in Nova Scotia is developing
Genuine Progress Index measures for such factors as: voluntary and unpaid
work, underemployment, leisure time, forests, fish stocks and soil fertility,
air and water quality, greenhouse gas emissions, income distribution, durability
of goods, health care, education and the costs of crime among others. They
are discovering that a lot of information is already available that can
be assembled into reportable forms. Once indexed, changes in the measure
can be assessed for the costs or benefits that the changes cause in the
community.
Other groups involved include the Pembina Institute for Appropriate
Development, the Centre for the Study of Living Standards, Canadian Policy
Research Networks, and the Atkinson Charitable Foundation. Many government
departments have measuring projects related to their mandates and numerous
communities across Canada are engaged in identifying what is important to
their members and how to measure changes in those factors.
Ron Colman of GPI Atlantic says the message emerging from his work is
so simple that it was hard to acknowledge: "What we count and what
we measure signifies what we value." When all we count is money, talk
about environment and social cohesion does not produce action. When we legitimize
other factors by measuring and reporting on them in our core measure of
progress, they become visible. Visibility enables anyone to see how policies
and actions affect the measures. Increased awareness of causes and effects
will naturally incline decision makers to consider how their decisions might
affect the measures and the management process will evolve to seek well-being
in the broader context.
In the field of public health, the practical benefits of an expanded
measuring system are striking. At present the focus is on illness. How many
people are sick with what ailments? Consequently the health care budget
is spent on treating illness and costs spiral upwards. Another approach
would be to measure and report on the determinants of health; the social,
environmental and economic factors which make people more or less likely
to get sick. "Almost by definition, a focus on health determinants
in our core measure of progress will shift attention from treatment to prevention"
says Mr. Colman. Since an ounce of prevention tends to be worth a pound
of cure we might expect expanded measures in the health field to lead toward
a healthier population at less cost.
The human family is going through a stage that in many ways parallels
the maturation of an individual. Teenagers are usually thrilled with the
remarkable capabilities that come with becoming adults. It is a period for
rapid growth. The transformation from small, dependent people to large,
capable ones brings with it responsibility for the effects of the actions
they take with their new strengths.
Throughout this century, civilization has gained skills and powers that
we have never had before. We have been growing rapidly, and like a young
person proud of growing muscles we marvel at our growth. Humans are no longer
an insignificant presence on the Earth. We now affect practically everything
that exists here; not always with positive results. It is time to take responsibility
for the consequences of our actions.
The most compelling evidence that it is time to acknowledge our collective
maturity is the change in what limits economic activity. Throughout history
the amount of fish we took depended on how much time and equipment we invested
in fishing. Fish harvest is no longer limited by how much is invested, it
is limited by the number of fish in the water. The same can be said for
the trees in our forests, and the time is rapidly approaching where the
availability of fresh water, petroleum and soil fertility will be based
more on supply than investment.
A major step toward responsibility is to be aware of the impacts of
our actions. The "Canada Well-Being Measurement Act" aims to establish
a measuring system which will make visible the changes taking place in our
world. By watching those changes we will be better able to deal with them.
Measuring the rate at which a baby grows is a good indicator of the
baby's health. The same measure, however, is of little use in assessing
the well-being of an adult. We urgently need a measuring system suitable
for assessing the true well-being of a mature economy. To continue measuring
"progress" in a way that counts the costs of crime, resource depletion,
and the devastating effects of global warming as positive factors would
be the height of folly.
The GDP perpetuates an increasingly dangerous illusion. It blinds us
to the pearls of pursuing unconstrained economic growth. It lulls us into
complacency. Surely the time has come to expand our criteria for economic
well-being to reflect the awesome challenges that now confront us. Only
then will we be galvanized into developing a sustainable economy - one that
is compatible with the limits of Earth's bounty and the resilience of human
communities.
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Mike Nickerson coordinates Inviting Debate and the 7th Generation Initiative.
If you would like to help establish a GPI for Canada see "Ways
you can help".
Questions and comments are welcome.
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Last Update: March 23, 2000
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