We need progress on Genuine Progress

We need progress on Genuine Progress

Dr. Trevor Hancock

27 March 2018

701 words

While from a public health perspective there was much that was welcome in the BC Government’s recent Throne Speech, there was an important omission. The agreement between the NDP and the Green’s in 2017 included this clear commitment: “Develop a genuine progress indicator for British Columbia covering a range of indicators”. This was to be “developed in consultation with business and industry, communities, not-for-profit organizations and individuals”.

As far as I can tell there has been little or no action thus far, although I am told the government is working on it. This may sound like a minor and somewhat esoteric issue, but in fact it is absolutely fundamental to re-orienting our society and economy to one that is fit for purpose in the 21st century: human-centred, socially just and ecologically sustainable.

Currently our main indicator of social progress is Gross Domestic Product (GDP) – despite the fact that one of its key architects, Simon Kuznets, warned the US Congress back in 1934 that “the welfare of a nation can scarcely be inferred from a measure of national income”. The GDP measures ‘marketed economic activity’; basically, the goods and services that we buy and sell. Among its many failings, two stand out: It fails to discriminate between expenditures that improve society and those that harm it, and it fails to count many activities that improve society.

Good ways to increase GDP include encouraging smoking – the economic activity of the tobacco industry and the economic activity of the health care needed to treat its victims all add to GDP; burning down buildings, starting wars or having oil spills. Just think of all the GDP that would be added in clean-up costs if one of Rachel Notley’s tankers spilt its cargo of bitumen off our coast.

Secondly, GDP ignores many things we do that make life better, because no money changes hands. Volunteer activity is not counted, yet, Statistics Canada reports that in 2013, 44 percent of Canadians volunteered. Moreover, on average volunteers contributed 3 hours each a week.

At the average hourly wage of $22.85 in 2013, this translates into $44.7 billion not included in GDP. But that is just the monetary value; StatsCan also tells us that volunteering “contributes to ‘social cohesion’ or ‘social capital’ . . . by increasing social trust, reciprocity and sense of belonging in communities”. But in their obsession with GDP, our economic decision-makers ignore all that.

Which is why we need a better measure of progress, such as the Genuine Progress Indicator (GPI). A 2013 article in Ecological Economics by some of the world’s leading ecological economists explained that the GPI starts with much the same data as the GDP “but adjusts them using 24 different components, including income distribution, environmental costs, and negative activities like crime and pollution, among others”. GPI also “adds positive components left out of GDP, including the benefits of volunteering and household work”.

The GPI gives us a dramatically different assessment of our social wellbeing and progress – or lack of it. The authors looked at the global GPI and that of 17 countries (comprising more than half the world’s population) across five continents over a 50 year span from 1950 to 2003. They found that global GPI peaked in 1978, and that “Life Satisfaction in almost all countries has also not improved significantly since 1975”. Moreover, while the GPI per person increases along with GDP at lower levels of GDP per person, it does not increase beyond about $7,000 GDP per person – about the level of China in 2003.

In other words, beyond a certain and rather modest level of GDP per person, any gains in GDP are offset – or even more than offset – by increasing social and environmental harm. Moreover, further increases of GDP do not make us more satisfied with our lives. Thus they conclude “GDP growth is no longer an appropriate national policy goal”.

But we don’t know whether or not we are making progress in BC – although the evidence suggests we are not – because we don’t have the GPI in place. The government should live up to its commitment, make this a priority and get the consultation underway; we need to make progress on measuring genuine progress.

© Trevor Hancock, 2018

 

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