The Common Good
November-December 1996

Counting the Cost

by Mark Walden | November-December 1996

A new measure of economic growth

In a presidential election year, voters are always urged to consider whether or not they are better off today than four years ago. The dubious implication is that the president is necessarily responsible for any change. Misleading as the question may actually be, it does raise the issue of what being "better off" means.

It's usually understood economically-the protests of people of faith notwithstanding-and the economists, politicians, and pundits routinely misrepresent growth or decline of the Gross Domestic Product (GDP) as an accurate measure of our economic well-being. The GDP records the dollar value of all our purchases of goods and services. It tells us how much money we've spent, but says nothing about how we've spent that money-on revitalizing our neighborhoods, or dumping nuclear waste. It doesn't even say whose money we've spent-whether we've earned it, borrowed it from overseas, or taken it from our grandkids. These shortcomings make the GDP a grossly inadequate indicator of economic health.

As an alternative, a San Francisco-based public policy group called Redefining Progress has proposed a more accurate measure of our economic performance-one that incorporates not only how much we've spent, but how we've spent it. The GPI, or Genuine Progress Indicator, subtracts environmental and social costs, including pollution, family breakdown, car accidents, ozone depletion, lost leisure time, and so forth. It also adds the value of unpaid work in the home and in the community, vital contributions ignored by traditional economic yardsticks.

The new indicator reveals the GDP as not just inadequate, but downright deceptive. While the gross domestic product has risen steadily for years, the GPI began falling in the early 1970s. And its decline has only accelerated. Most economists acknowledge the shortcomings of the GDP when confronted with the stark contrast between its growth and the decline of broader measures of well-being. Yet the GDP remains the standard measure, even though it contradicts better indicators and people's concrete life experience.

The new measuring tool suggests the startling conclusion that conventional GDP growth has become uneconomic-more costly than beneficial-and that further maximization of the GDP will only cause further harm. The GDP is a one-way sign pointing in the wrong economic and political direction.

TURNING AROUND will not be easy, and adherents to the GDP will protest loudly. But doing so makes common sense. When growth in the GDP results from painful ironies-such as more money spent on tobacco and its advertising and additional dollars spent to treat the resulting health problems; or more money spent on divorce lawsuits and government funds expended on social services to broken families-it becomes apparent we need another economic measure.

Effective policy making can only occur if indicators informing policy decisions take into account the costs of litigation, pollution, and destruction of the social fabric as well as the benefits of volunteerism, parenting, and other unpaid work. Such accounting, besides producing better public policy, would reflect a much more biblical understanding of what life is about-concern for the well-being of the community and its God-given natural resources, and awareness that life is more than mere consumption.

For Christians, the test of policy is how well it fits the spirit and teaching of the faith. Christianity teaches concern for the poor, stewardship of creation, responsibility for one's actions, and the importance of family and community. Our present system teaches welfare dependency for the poor (if they have even that to depend on); destruction of creation, to whatever extent the law allows (or beyond, if profits exceed the costs of fines); corporate responsibility only to shareholders; and the sacrifice of family and community to layoffs, unemployment, overwork, and whatever else it takes to increase the GDP. We can avoid much of this by wiser use of taxes as incentives, and by more accurately and honestly measuring the costs and benefits of what we do.

The biblical message is about improving people's lives by turning their whole orientation around: Repent, and turn to God. Isn't it time we turn our indicators and tax policies around-repenting of those that blind us to the harm we've done and continue to do-and begin moving toward a healthier, more just, and sustainable economy?

MARK WALDEN works with Redefining Progress and lives in Chicago.

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