Oliver Bruce
Ever seen the news when the government releases its figures for the economic activity over the last year or quarter? Ever wondered what it all meant? Or why, even though we seem to be making “progress”, often it has little impact on our lives in our community?
The Origins of our Success
At present, we measure how we are doing economically as a country with something called the Gross Domestic Product (GDP). It was first created during the Second World War as a way of measuring productivity, and has been in place ever since as a way of measuring the size and growth of economies. It is formulated as being the total amount of spending (both governmental and private as well as investment) and exports of a country minus the imports.
Why might we be heading in the wrong direction?
If a woman was to get breast cancer, does that sit with you as being a good or bad thing? If we use the GDP to measure our “progress”, you will find that the cost of the chemotherapy, drugs, surgery, hospital visits, fuel to get to the hospital etc. are all contributing to the GDP of a country, that would not have been spent if she hadn’t got sick. This illustration reveals the dilemma: not all economic growth is actually contributing to the wellbeing of those in society. In fact, most undesirable factors (oil spills, unsustainable native forestry etc) are considered to be beneficial to the economy. And where does that lead us?
Where might we go from here?
In the mid 1980’s it was identified that we needed to look at the way we were measuring progress. Thanks to the work of people like NZer Marilyn Waring and Professor Herman Daly in the field of uneconomic development (identifying that some economic activity creates a decline in human wellbeing) there have been several attempts at creating newer, more realistic looks at how to measure our economic gains and impact. One such measure called the Genuine Progress Indicator (GPI) was formulated to take into account such things as crime and income distribution, and balance these measures with that of economic activity.
Why is GPI better?
This means that the picture that is presented of our ‘progress’ directly correlates to the issues that determine our standard of living (such as how safe we are). It’s a far more holistic representation of what is going on both economically, socially and environmentally - which is integral in shifting how we measure our progress, and our subsequent actions, towards causing positive change. Sustainable development is a concept based on the balance of these three pillars’: economic, social and environmental development.
Why is how we measure things so important?
Decisions made by policymakers (governments, councils and the like) are based upon wanting to progress and work towards a better quality of life. As the saying goes, “when you have a hammer in your hand, every problem starts looking like a nail”. When you have a measurement as narrowly focussed as that of the GDP, the decisions made will often not have the intended effects. It is not a simple matter to explain, and the answers are not black and white. What is important is that we recognise that what we have isn’t serving us, and that we need to work towards implementing better methods of analysis so that we can accurately aim towards a better world.
LEARN MORE
- For a more in depth explanation on the Genuine Progress Indicator visit Converge website
- Read the Wikipedia entry on GDP
- For more information on the other methods of measuring progress, and environmental impact, look at the Redefining Progress website
- Check out work by Marilyn Waring, including her book “Counting for Nothing” and her documentary “Who’s Counting?” For more information on the theories of uneconomic development (Remember this woman was in government at age 23!) Read about her on wikipedia
- The magazine Adbusters explains the problem well
- The documentary “The Corporation” explains the problem faced with the institution of the multinational corporation. A fantastic film that explains more about the problems of not valuing that which cannot be quantified. This can be borrowed FREE from the Global Education Centre library. Contact eva@globaled.org.nz for details.
TAKE ACTION:
- Tell people.
- If you are at university, ask the economic professors about the questions.
- Read more.
- Make a film for the Media that Matters festival
To tell you the truth, one of the most difficult things about this is that there are few concrete actions that can directly impact this. The process of change requires first for us to realise what we are doing, then actively seek to help change the course of the field of economics towards that of a more holisitic discipline…in other words do the same thing to economics that has affected nearly every other academic discipline = Postmodernist thought.
But yeah, it’s not as simple as that. If you have any ideas let me know, I am happy to hear what any of you suggest — comment in the forum…






The draconian terms of the structural adjustment programmes often include the elimination of tariffs on imports, the forced privatisation of state owned assets, the removal of subsidies to local producers, the reduction of crop diversity and the forced export of crops to a small number of foreign buyers. These policies often lead to much poverty and injustice.
On the contrary I would be more worried if big business and their lobbyists weren’t afraid of the Green agenda.