A System Tune-Up
for the Coming Era
Powerful new tools are available to deal with unemployment and climate
change. Joe Jordan, is committed to bringing them to public attention. If
we choose to use these tools, we can turn the tide of events and put hope
back into the future.
The plan has two parts.
The first is to acknowledge that pollution, unemployment and resource
depletion are problems and to include them in our assessment of progress.
At present, GDP (Gross Domestic Product) is used to measure progress. It
is a tally of all the money spent in a year. GDP is a poor measure of well-being
since it makes no distinction between desirable expenditures like food and
education and 'regrettable' ones like burglar alarms and the treatment of
pollution related disease.
The "7th Generation Bill", which Mr. Jordan is working on
as a Member of the Canadian Parliament, proposes an improved measure of
well-being. It will account for depletion of natural resources and subtract
'regrettable' expenditures. It will also acknowledge contributions to well-being
for which no money is paid. Homemaking, child and elder care and voluntary
community activity all improve our well-being. When they are not recognized,
as when GDP ignores them, they are depreciated. The result is fewer of these
services provided less enthusiastically.
Improving our measure of well-being would be like getting new eyes with
which to see as we steer our way into the future.
The second step:
Once we have accepted the broader range of costs and benefits that affect
well-being, subtle shifts in our governing process will help immensely.
It is popular to resent taxes, yet few of us object to the education,
health care, fire protection and other services they pay for. However, the
system needs a tune up. Even though Canada has acknowledged the serious
dangers of climate change, billions of our tax dollars are used to subsidize
the very processes which deliver carbon fuels and make it easy for us to
pollute with them. Any effort to address climate change without reassessing
the employment of our tax money in this way is like running an air conditioner
while the furnace is blazing. Better that we should use tax power to encourage
solar energy where every step taken reduces the need to use polluting fuels.
Taxes are a powerful tool. Besides raising money for public services,
it is well known that when something is taxed, we get less of it. Taxing
employment (income tax) makes it more expensive to hire people, which results
in fewer jobs. If we taxed pollution, polluting activity would cost more
and we would do less of it. Doesn't it make more sense to tax things we
don't want rather than taxing the things we do want? Tax shifting, as this
is called, can put more money into people's pockets and actively discourage
the release of dozens of pollutants that are proven to cause problems. In
the revised system, we would be encouraged to avoid the pollution taxes.
Companies would compete to provide non-polluting alternatives and real progress
would be made.
Full cost accounting is where the costs of diminished resource supplies,
pollution and unemployment are included when calculating the cost of producing
goods and services. If prices included these external costs, we could, in
our millions, help solve critical problems by shopping for bargains. Because
nature doesn't charge for supplying resources and absorbing waste, there
are no real prices to fill the accounting columns. The social costs of unemployment
are even harder to assign to particular products. With tax shifting, however,
we need only identify the value that citizens put on health, the environment
and dependable social relations. The tax tool can then be applied accordingly
and problems would be discouraged and solutions given the advantage.
An expanded measure of well-being along with a slow but steady shift
in the source of tax revenues can go a long way toward securing the future.
The "7th Generation Bill" aims to focus public concern on this
opportunity. You can help make it happen.
More details are available. Write for a free copy of Measuring Well-Being.
From: Joe Jordan, MP, House of Commons, Ottawa, K1A 0A6. Postage to the
House of Commons is free in Canada.
This article was written by Mike Nickerson
Questions and comments are welcome.
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Last Update: May 11, 2002
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