This article originally titled "To Measure is Human" by Jamie
Linton was published in the Ottawa Citizen Friday, May 5, 2000 .
If you reproduce this please mention the author and the Ottawa Citizen.
The GDP is not God
Over 2,500 years ago the Greek philosopher, Pythagoras, came up with
the doctrine that there is no objective truth and everything is relative
to human evaluation. "Man is the measure of all things," he said.
We have been measuring all things ever since.
We measure time, distance, weight, size, speed and the various dimensions
of objects. But it seems the most common measurements we make are related
to price. As a society, we excel in measuring the economic value of things.
Substances such as water and air that have always been considered free
goods are now being "commodified." The economic costs of things
like pollution and noise are calculated and factored into policy decisions.
Things that were formerly considered beyond measure, such as the value of
wildlife, are now being "monetized." The economic worth of whole
countries is compared, often with that of an individual. Everybody knows,
for instance, that the fortune of Bill Gates exceeds the income of the twenty
or thirty poorest nations, depending on the current value of his stock portfolio.
Another big thinker who weighed in on the question of measurement was
the 19th century mathematician Lord Kelvin. "When you can measure what
you are speaking about, and express it in numbers, " he said, "you
know something about it." However, "when you cannot measure it,
when you cannot express it in numbers, your knowledge is of a meager and
unsatisfactory kind."
Lord Kelvin had a point. But we may have reached the stage with some
measurements where exactly the opposite is true. There are some things that,
by expressing them in numbers, may diminish rather than increase our understanding.
A good example of this is Gross Domestic Product, or GDP.
GDP is a measure of the total value of all goods and services produced
in a country. In our society, the GDP has become the measure of all things.
GDP is understood as the measure of the economic strength of a country.
Per capita GDP is the most commonly used measure of the wealth and well-being
of a country's citizens. Concepts such as "productivity" are expressed
as a ratio of labour costs to GDP.
This measurement has become so entrenched that almost any public policy
initiative can be defended as long as it is shown to increase the country's
GDP. Cutting social programs, reducing taxes for the rich, providing subsidies
for corporations - these moves have typically been justified by claiming
that they enhance economic growth and hence increase the GDP.
And yet the GDP doesn't tell us anything about the distribution of wealth
in a country. In fact some of the countries with the highest GDP per capita
also have the greatest disparities of income in the world. Nor does it say
anything about the nature of economic activity. For example, whenever there
is a car accident, the policing costs as well as the costs of cleaning up
and medical care are added to the GDP. When a violent storm causes property
damage, the cost of replacement by the insurance industry increases the
GDP. Whenever people are tried in courts and put in jail, the GDP rises.
Whenever we use up stocks of raw materials - such as Atlantic codfish in
the 1980s - the loss is counted as a gain in GDP.
As a measurement of well-being, Gross Domestic Product is grossly deficient.
It can be argued that an increasing portion of the GDP reflects society's
growing problems rather than peoples' well being. "Running society
attending only to GDP" says Joe Jordan, Member of Parliament for Leeds-Grenville,
"is like driving a bus looking only at the speedometer."
Jordan has introduced a Private Members' Bill in the House of Commons
titled The Canada Well-Being Measurement Act. In Jordan's words it aims
"to establish a measuring system that distinguishes activities which
benefit people and ecosystems from activities which result in and from the
degradation of our circumstances." Introduced on April 5, the bill
is supported by many of Jordan's parliamentary colleagues and Jordan has
received encouragement from Finance Minister Paul Martin and Environment
Minister David Anderson.
Jordan's research shows that much progress has already been made developing
alternative indexes of economic performance as well as indicators of social
and environmental well-being in Canada. His proposed Act calls for the Standing
Committee on the Environment to study these and recommend the adoption of
appropriate indicators. Selected indicators would then be reported annually,
"analyzing and evaluating the current well-being of the people, communities
and ecosystems in Canada" If Jordan can obtain all-party agreement,
there is a chance his bill will receive second reading after the House resumes
sitting in May.
An initiative like this deserves our attention. It may be only human
to measure, but we should at least be measuring things that contribute to
our well being rather than our confusion.
Questions and comments are welcome.
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