Michael Gurstein
Wed, 13 Oct 1999 06:14:37 -0700
> > GLOBE AND MAIL COLUMN - March 12, 1999[GLOBE 21] > > THE GROSS NATIONAL PROBLEM > > by Silver Donald Cameron > > One of our great hidden plagues is bogus accounting - measurements and > tallies which are not only misleading but downright damaging. > > When an arts group obtains a grant, that's a &"cost&" to government. Yet > the festival made possible by the grant yields tax revenues - income taxes, > entertainment taxes, sales taxes so on -- which often amount to two or > three times the amount of the grant. The grant proves to be a rather > brilliant investment which returns 200% or 300% within six months. But > nobody notices, because the subsidies go out through one agency while the > revenues come in through others. Similarly, eliminating the &"cost&" of > the Cape Breton coal mines also eliminates the industry's substantial > revenues, leaving a large social cost still to be paid. Ultimately the > public purse is emptier, not fuller. > > Bogus accounting calculates costs or benefits but not both, and often omits > important factors altogether. The worst example is the Gross Domestic > Product -- an important element in our gross national problems -- which > simply tallies up the value of all goods and services exchanged for money. > Crime, war, pollution, tobacco smoking, house fires, car accidents - they > all represent &"progress&" as defined by the GDP. > > On the other side of the ledger, a healthy environment, a caring community > and stable families literally count for nothing. Trees and fish increase > GDP when they are harvested and processed, but the forests and fisheries > themselves are assigned no value. Yet when the fisheries collapse and the > forests vanish, the social and economic loss is staggering. For the GDP, > the &"cost&" of oil is merely the cost of pumping it out of the ground; > the intrinsic value of an irreplaceable resource never enters the > calculation. That's like selling off your house board by board and > recording the proceeds as income. > > We wouldn't run our households this way. How can we run our country this > way? Or our world? > > Happily, GPI Atlantic of Hackett's Cove, NS, a non-profit research group > funded by Statistics Canada and the Nova Scotia Departments of Economic > Development and Environment, is constructing an alternative. Unlike the > GDP, the Genuine Progress Index measures development in terms of > sustainability, and incorporates the difficult questions of value which are > ignored by the religion of economic growth. > > The GPI pilot project is directed by Dr. Ronald Colman, an economist. Its > basic approach is &"full-cost accounting,&" which translates social and > environmental benefits and costs into monetary terms, and assigns negative > value to negative things. The GPI recognizes four forms of capital: > natural, human, social and &"produced&" capital. &"A depletion of any form > of capital,&" says Colman, &"imperils the future flow of services, and > re-investment in all four forms of capital is necessary for economic > health.&" > > Colman lists four clusters of underlying values which together describe > sustainable development: security of the person, equity (among living > people, and also between generations), environmental quality, and &"other > human and social values,&" including freedom, knowledge and &"the social > caring capacity of a community.&" The GPI thus deducts the costs of crime > and pollution, but includes such assets as the intrinsic value of > unprocessed natural resources and the economic value of parenting, > housework, and community service. Even the early results are arresting. In > a 1998 report, GPI evaluated volunteer work in Nova Scotia at nearly $1.9 > billion a year -- as much as the whole Atlantic Groundfish Strategy. Last > month, it reported a decline of 7.2% (a $60 million loss) between 1987 and > 1997, attributable largely to growing time pressures resulting from > downsizing and cutbacks. > > The GPI acknowledges realities which elude traditional economic > measurements. Although a crime wave may boost the sales of security > systems, crime makes life worse, not better. California lettuce can be > competitively priced in Nova Scotia, Colman notes, only if one ignores > &"the true costs of transportation, the cost of greenhouse gas and other > emissions from refrigerated trucks and warehouse, soil erosion from > monoculture growing methods, the health effects of pesticide residues, the > loss of local jobs, the loss of potential local inputs into production.&" > Those are real costs, and sooner or later all of us will have to pay them. > > The GPI &"is not rocket science,&" says Colman. &"It is street-sense > economics.&" As Robert Kennedy once remarked, the GDP &"measures everything > except that which makes life worthwhile.&" The GPI, by contrast, measures > our advances toward a future we might genuinely wish to inhabit. The > agencies which fund it have shown an uncommon level of common sense. > > - 30 - > > Silver Donald Cameron lives in Isle Madame, Cape Breton. His most recent > book is The Living Beach. The web site of GPI Atlantic is at > www.gpiatlantic.org. > Silver Donald Cameron > D'Escousse, NS B0E 1K0 > (902)226-3165 fax (902)226-1904 > > Home page: http://islemadame.com/sdc/ > Weekly columns: http://www.onelist.com/subscribe/sdcns > Summer rentals: http://cyberrentals.com/CAN/CameCAN.html > > THE LIVING BEACH (Macmillan Canada, 1998) > * Winner of the Evelyn Richardson Award , and now in paperback > >