Dear Mark:
This is getting to be a lengthy E Mail, but I am becoming convinced by my
own experience that continuing to repost and add to a thread has a learning
and historical value. Of course it is nice to read my mail in paragragh
bits of pithy quotes, intelligent rebuttals, and clever opinions. And yes,
it is a bit of drag to re-read or skim a lengthy post such as this and
update myself on what I have read before, but repitition is a form of
learning. So readers be warned, I am going to repost a lengthy post from
another list - you may have read it - or not, it is worth reading again or
for the first time and then to review the comments that have already been
posted to this thread. This post specifically, though in great detail
answers Mark's question, "This may be late and off-topic, but it would be
interesting to see whether it is possible (it may have already been done, I
don't know) to
>produce a variant of the current international GDP accounting system where,
as Mr Milne bluntly and correctly puts it, manufactured things are assets
and human potential is a liability.
Respectfully,
Thomas Lunde
The repost:
---------- Forwarded message ----------
Date: Thu, 31 Dec 1998 17:35:32 +0000
From: Janet M. Eaton <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED]
Subject: MAI-Math: Is there an alternative? Ron Colman-GPI Atlantic
===================================================
This paper was delivered by Dr. Ronald Colman, Director of the
GPI Atlantic Project in Nova Scotia, at the MAI Inquiry held in
Halifax, Nova Scotia, November 28, 1998.
Ronald Colman's GPI Atlantic is showing what's wrong with our
current measures of progress and what we can do about it through his
work on the Genuine Progress Index!! In this paper he shows how
GDP/MAI type mathematics, which is the math that is the foundation
of every Economics 101 text, is a math that misleads policy makers,
rewards environmental destruction, elevates materialism to the
primary social ethic, and, for the first time since the Industrial
Revolution, makes it highly likely that the next generation will be
worse off than the present one. He goes on to show that there
is a better way!!
GPI Atlantic is a non-profit research group that is currently
constructing an index of sustainable development for Nova Scotia, a
Genuine Progress Index, that measures the value of our natural
resources, of unpaid work, of equity, of human and social capital, in
addition to market statistics. And it subtracts rather than adds the
costs of crime, toxic pollution and other activities that detract
from well-being.
By integrating social, economic and environmental variables into a
comprehensive set of accounts, it becomes possible to find out
whether welfare is actually being enhanced or diminished by current
economic policy. It can send more accurate signals to policy makers
and help them identify measures that can contribute to genuine
progress, well-being and prosperity.
Ron Colman and the team of advisors and researchers he has assembled
are examining 20 social, economic, and environmental indicators,
selected in consultation with Statistics Canada. Ron is quick to
recognize and note that GPI Atlantic is building on the pioneering
work of Redefining Progress in California, of the World Resources
Institute, and of other leaders in sustainable development
accounting. His greatest hope for the project is that it will
result in an actual tool for the practical use of policy makers.. .
Statistics Canada has designated this project as a pilot for the
rest of the country -meaning Nova Scotia has a chance to take the
lead in creating a new economy for the 21st century that will
genuinely reflect the social, spiritual, environmental, and
human values of our society.
For a description of the project, complete background papers,
and news releases see the GPI Atlantic Website address:
www.gpiatlantic.org
Ron Colman can be reached at
[EMAIL PROTECTED]
The following paper is not on the GPI website so you may wish to
save it in your files.
All the best,
Janet Eaton,
Advisory Council, GPI -Atlantic.
[EMAIL PROTECTED]
=================================================
MAI INQUIRY, HALIFAX, 28 November, 1998
MAI MATHEMATICS: IS THERE AN ALTERNATIVE?
Ronald Colman, Ph.D, Director, GPI Atlantic
Thank you for coming here today to listen to us. We have learned so
much from you over many years. We appreciate that you are now here to
hear us.
Why is the MAI so important to some? We must begin by acknowledging
that according to a certain kind of mathematics it is very
attractive. It can be shown to increase production, to expand trade,
to lower production costs, and to keep inflation low.
It is the same mathematics that measures economic strength and social
well-being according to GDP growth rates, and that focuses tremendous
attention on related market statistics like interest rate changes,
currency exchange value fluctuations, and gains and losses on the
Toronto Stock Exchange.
It is the same mathematics where the numbers go up the more fish and
timber are sent to market, that counts the depletion of natural
resources as economic gain.
It is the same mathematics where the numbers go up the more crime,
the more toxic spills, the more divorce, the more gambling, the more
car accidents there are, because all these generate economic
activity which adds to growth. It is a mathematics that makes no
distinctions between economic activities that contribute to or
detract from welfare.
It is the same mathematics that ignores growing inequality, the value
of unpaid work - including voluntary work, household production and
child-rearing, overwhelmingly performed by women throughout the
world, and the value of leisure time. All are omitted from the
equation in GDP / MAI mathematics.
It is the same mathematics that 20 years ago hailed GDP growth rates
in Brazil as an "economic miracle," while half the country got
poorer, and infant mortality rates sky-rocketed.
And it is the same mathematics that today holds Chile up as a model
for the developing world, because its economy is growing and it is
paying back its loans to the IMF, while its forests are being cut
down, its fish stocks depleted, its rural population sprayed with
toxins long banned in Canada, and its inequality growing.
Interestingly, if you or I used this kind of mathematics on our
income tax forms, Revenue Canada alarm bells would sound and we
would be hauled in for interrogation. Imagine a factory owner
counting the sale of his machinery and capital equipment as profit,
the way our national accounts count the sale of our natural capital
assets as economic gain!
Yet that is the mathematics, selectively counting, measuring and
valuing only the quantity of market production, that justifies the
MAI, because it increases production at low cost. It is a mathematics
that makes no distinction: · whether foreign investment protects or
destroys the resources of the host country; · whether investment is
in clinics or casinos, in schools or gun-running; · whether
investors use child-labour or sweatshops or adhere to safety
standards or poison their workers by violating environmental
regulations; · whether the investment feeds people or undermines the
food security of the host country by converting self-sufficient
farms to cotton plantations or shrimp farms or sugar and cocoa
plantations for consumption at western dinner tables; · whether
security, equity and environmental quality are enhanced or
diminished.
It is a mathematics, in short, that omits long-terms costs and
benefits completely from the equation. It is a mathematics,
unfortunately, that is still taught in our classrooms, and that is
the foundation of every Economics 101 text. It is a mathematics that
misleads policy makers, rewards environmental destruction, elevates
materialism to the primary social ethic, and, for the first time
since the Industrial Revolution, makes it highly likely that the
next generation will be worse off than the present one.
There is a Better Way of Counting
Here in Nova Scotia we are engaged in a modest project to count some
of the important factors omitted from GDP / MAI mathematics, and to
include them in the equation.
GPI Atlantic is a non-profit research group that is currently
constructing an index of sustainable development for Nova Scotia, a
Genuine Progress Index, that measures the value of our natural
resources, of unpaid work, of equity, of human and social capital, in
addition to market statistics. And it subtracts rather than adds the
costs of crime, toxic pollution and other activities that detract
from well-being.
By integrating social, economic and environmental variables into a
comprehensive set of accounts, it becomes possible to find out
whether welfare is actually being enhanced or diminished by current
economic policy. It can send more accurate signals to policy makers
and help them identify measures that can contribute to genuine
progress, well-being and prosperity. It can let citizens know how we
are really doing as a society, and how we can live sustainably so
that future generations will not be worse off because of our
actions.
Counting some of those missing numbers can actually change the policy
agenda. If our natural resources have no value in our accounting
system, we will not give policy priority to supporting sustainable
timber harvesting. While we measure the quantity of market production
but not investments in human and social capital, we will continue to
give tax breaks to business, and view education and health as costs
that need to be cut. Our current system of selective mathematics
actually determines what makes into the policy arena.
If I tell a class of students that they should devote great effort to
their research paper, that they will learn a lot from it, that it
will hone their research skills, that it is the most important part
of the course, and that it is worth 5% of the final grade, then the
students may be forgiven for putting all their effort into the exam
instead. What we count signifies what we actually value far more
potently than what we say.
No one today argues publicly for a degraded environment, for greater
inequality, for more crime or less job security. But we can talk
ourselves blue in the face and profess adherence to all the right
principles. Until we officially count and measure them in our core
accounts, they will not be seen as having real value, and they will
never make it to the top of the policy agenda.
The time is more than ripe to change our accounting system and to
adopt a more genuine and comprehensive measure of progress. And there
is probably no region in the country that is more fertile ground for
this change than the Atlantic provinces, for three basic reasons:
· No one in this region needs convincing that counting natural
resource depletion as growth can be economically disastrous. Maybe in
British Columbia enough people still believe that resources are
forever. But here we have actually seen the loss of a resource come
full circle back into the economy as a catastrophic cost. Through
TAGS, through 40,000 unemployed fishermen, we are now actually paying
the price in hard cash for failing to value our fisheries as a
capital asset.
What policy-maker, of whatever political stripe, would not welcome an
early warning system that allows a timely, graduated response to a
depreciating asset before we are faced with another crisis? The
question is not theoretical. A year ago, the National Round Table on
Environment and Economy warned that our Maritime wood lots could be
on the verge of a collapse, analogous to the period preceding the
collapse of the cod fishery.
· Secondly, there is no illusion here that conventional economic
mathematics has ever really worked for this region, at least in the
last 100 years. There is perhaps a greater openness here to an
alternative system that values our true assets than in a region like
Upper Canada that is more firmly yoked to the TSE, the Bank of
Canada, to company headquarters and to the other institutions of
blind growth.
· Thirdly, for some reason, the materialist juggernaut has not
irrevocably paved this region over, at least not yet. Community
values are still remarkably strong. There is still a gentleness,
straightforwardness, generosity, and willingness to help our
neighbours that has not yet succumbed to greed and egoism. Visitors
feel it. Locals who leave for greener economic pastures often return
after some years, drawn back by a mysterious magnet that has more to
do with quality of life than quantity of possessions.
But we are not immune. Small community schools are being replaced by
massive private-public partnered crowd control enclosures. From a
fraction of the national average 30 years ago, crime rates are rising
fast to meet national standards. Government-supported gambling is
eroding the social fabric. Free trade brings Walmarts to replace
small local stores. And yet, we still have a narrow window of
opportunity. It is still possible here, I am convinced, to garner
overwhelming public support for an index of genuine progress that
reminds people of their true values.
Cutting Through MAI Math
This local project can, I think, contribute to the MAI debate,
because even a small move towards fuller cost accounting, that
begins to consider social and environmental variables in the
equation, can demonstrate how spurious MAI math really is. For
example, the math of globalization shows that transporting goods
over vast distances can keep prices lower than producing those goods
at home. Sobey's can sell a California lettuce for less than it
costs a local farmer to grow one.
But what is missing at the checkout register? That price excludes
energy subsidies, the true costs of transportation, the cost of
greenhouse gas and other emissions from refrigerated trucks and
warehouses, 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.
When all that has no value, when it is not counted at the checkout
register, then the California lettuce looks very attractive. It
appears cheap to the consumer, profitable to the producer, and it
creates enough intermediate economic activity to keep the growth
figures climbing. Sadly, all the hidden and forgotten costs will be
paid, many of them by the next generation.
Cynics might say that people will always go for the lowest price, the
greatest personal convenience, the best bargain. That is the MAI
logo. But I don't think so. I am convinced that if Nova Scotians
know all the numbers in the equation, and not just a selective few,
they will naturally incline to wise choices.
We recently spent $112 million on the 45-kilometre Cobequid by-pass
on Highway 104. That $112 million could have closed the poverty gap
for 25,000 of the 46,000 Nova Scotia children who live in poverty.
Would Nova Scotian motorists be willing to drive a few kilometres an
hour slower on the old road or take a few extra minutes on their
journey to help eliminate child poverty in the province? If they
knew those few extra numbers, currently invisible, I'm convinced the
answer would be a resounding "Yes."
Not only that, eradicating child poverty would be a good economic
investment for the province. Numerous studies show that child poverty
is directly correlated with poor health, premature death, and poor
educational attainment, which translate directly into higher social
costs and poor workplace productivity down the road, and which come
back to the economy as costs as surely as the depletion of the
fishery.
This is not rocket science. It is street-sense economics. Ordinary
Nova Scotians can understand it, and respond with wisdom and
compassion.
I may be hopelessly naïve. But I do believe that even those most
firmly convinced of the value of MAI-type agreements would see the
equation differently if just a few extra numbers were added to the
accounts.
I recently read an interview with the Chief Executive Office of
Philip Morris, who earns a tidy $4 million a year. Using the
selective MAI / GDP type mathematics that is confirmed by all we're
taught and read in the press, that man looks "rich." His apparent
wealth is envied and emulated, he may receive honorary degrees from
universities he supports, or may head the local United Way, like the
President of Imperial Tobacco in Montreal. Not only rich, but a
respected citizen!
Even if we discount the social costs of what he produces and sells -
(Personally I can't do that, because I feel a pain in my heart every
morning when I see the 13 and 14-year-old schoolgirls puffing away on
the street corner as they wait for the school bus, or when I read
that the number of teenagers who smoke regularly has tripled in
recent years) - but even if we can't expect the Philip Morris CEO to
count these costs, there are others he can not so easily ignore.
In the interview he reveals that he arrives at the office at 6am
every morning, and leaves at 10pm. He works weekends. "What else do
you do, aside from work?" asks the interviewer. "Sleep," he replies.
An impoverished lifestyle, methinks. No time to listen to music, to
read a book, to play with children, to walk in the woods. (And how
easy it must be to cut down a forest when there is no time to enjoy
the trees and trails.)
Even the CEO of Philip Morris must understand the meaning of a few
extra numbers - the costs of overwork, the health effects of stress,
no time with family. If his account books reflected just the value of
time and health, in addition to sales and profits, I don't believe he
would remain unmoved.
Thirty years ago, almost to the day, just before he was assassinated,
Robert Kennedy said: Too much and too long, we seem to have
surrendered community excellence and community values in the mere
accumulation of material things..The GNP counts air pollution and
cigarette advertising and ambulances to clear our highways of
carnage..Yet the gross national product does not allow for the health
of our children, the quality of their education, or the joy of their
play..It measures neither our wit nor our courage; neither our wisdom
nor our learning; neither our compassion or our devotion to our
country; it measures everything, in short, except that which makes
life worthwhile.
Of course, it would be a much more direct path to a decent society if
policy-makers recognized fundamental human, social and environmental
qualities as having intrinsic value in their own right, and if these
values were considered in all policy decisions. But until then, and
while money and economic criteria still dominate the policy arena,
and the consumer ethic guides the behaviour of ordinary citizens, a
genuine progress index at least can demonstrate convincingly that
these non-material values are also the living basis of true wealth
and well-being.
There is no doubt that if the full social, economic and environmental
costs of the MAI were included in the equation, we would see through
the simplistic, narrow, spurious mathematics of the globalization
dogma in an instant, and begin investing in genuine security,
humanity, community strength and ecological resilience, that are the
actual basis of wealth and prosperity, and, at a more profound level,
that give life meaning and make life worthwhile.
---end---
-----Original Message-----
From: Mark Measday <[EMAIL PROTECTED]>
To: Victor Milne <[EMAIL PROTECTED]>
Cc: Ed Weick <[EMAIL PROTECTED]>; Futurework
<[EMAIL PROTECTED]>
Date: December 30, 1998 3:54 PM
Subject: Re: The end of work?
>This may be late and off-topic, but it would be interesting to see
>whether it is possible (it may have already been done, I don't know) to
>produce a variant of the current international GDP accounting system
>where, as Mr Milne bluntly and correctly puts it, manufactured things
>are assets and human potential is a liability. I suppose the problem is
>that noone is going to believe that a nation or society producing
>excellent evocative poetry is more advanced than one capable of chemical
>or nuclear warfare. Attempting to cross the public street outside, in a
>practical manner, I find my path obstructed by large numbers of
>manufactured but hardly used objects, mostly shiny BMWs, whilst the
>public facilities available crumble. However, if the good denizens of
>London believe they must have an uptodate German-manufactured automobile
>to establish their seriousness in the job market, that is what they will
>believe. Would it be possible for the futurework list to cooperate to
>provide an alternative GDP function, allowing these poor harassed
>commuters who take the subway to work, as the road infrastructure is too
>poor to allow the use of their expensive machine, to become rich by some
>variant of the Roman public virtue argument? I know I dream, but you
>never know.
>
>Mark Measday
>
>Victor Milne wrote:
>
>> I am inclined to agree with Thomas in the interchange below. I don't
>> have any figures. However, I think this is what happens in the
>> introduction of a new technology such as railways and the internal
>> combustion engine: The technology is genuinely labor-saving, and so
>> everyone wants to have it or has to have it to stay abreast of
>> business competitors. There is thus a large amount of work created to
>> fill the demand for the new technology. Moreover, with a very broad
>> technology it takes a while to discover all the uses; i.e., to create
>> demands that were not there before. Ultimately the technology is
>> mature. Virtually every potential user has acquired it. When you are
>> only replacing old wornout units rather than selling to new markets,
>> the workforce producing this technology has to be scaled back. It is
>> then that we discover that relative to the population level the
>> once-new technology has destroyed more jobs than it has created. I
>> think too that computer technology is like none other that went before
>> because of the very generality and breadth of its application. It is
>> displacing people at throughout the employment spectrum. A lot of
>> middle managers fell to its onslaught some time ago because it so
>> increased productivity in data gathering and organization and
>> interpretation. Bank tellers are vanishing, and supermarket cashiers
>> will soon join them--how many hundreds of thousands, or millions, of
>> people are employed in these jobs just in North America? What jobs
>> will be created for these people in the brave new world of increased
>> employment through technology that traditional economists believe in?
>> Name one new job brought in by computer technology that a displaced
>> welder or cashier could transfer to. If you can name such a job, then
>> estimate its numbers relative to the vanished jobs. And computers are
>> not the end of the new technologies. In a recent talk Rifkin said he
>> believes that the 21st century will be the era of biotechnology. In
>> his book he does hint without giving any details that the number of
>> workers in food production may be slashed still further, and food
>> production will move to a factory setting. To fill in some possible
>> details (some may think I've read too much science fiction) I have no
>> difficulty in envisioning factories as highly automated as oil
>> refineries (i.e., very few employees relative to an immense output) in
>> which genetically engineered yeasts are grown and processed to produce
>> passable imitations of virtually any food you can imagine--steak, corn
>> on the cob, potatoes. Of course there would remain work worth doing
>> such as nursing and educating children. The question is who is willing
>> to fund it? As was pointed out in a paper on the CCPA website, under
>> our present distorted system of accounting, the production and sale of
>> a golf ball is counted as an addition to the GNP (recorded on the plus
>> side of the ledger) while the education of a child is counted as a
>> rather large reduction in the GNP (recorded on the minus side of the
>> ledger). Until this is changed, there will be not be many worthwhile
>> jobs for people to find. Victor Milne FIGHT THE BASTARDS! An
>> anti-neoconservative website
>> at http://www3.sympatico.ca/pat-vic/pat-vic/ LONESOME ACRES RIDING
>> STABLE
>> at http://www3.sympatico.ca/pat-vic/
>>
>> -----Original Message-----
>> From: Ed Weick <[EMAIL PROTECTED]>
>> To: Futurework <[EMAIL PROTECTED]>
>> Date: November 22, 1998 4:25 PM
>> Subject: Re: The end of work?
>>
>> Ed Wrote:
>>
>> Thomas Lunde:
>>
>> Your thesis of growth from original idea
>> to larger employment is well buttressed
>> by several historical examples.
>> However, the computer has the potential
>> in speed and computing power to
>> seriously eliminate things that we
>> humans do.
>>
>> Weick:
>>
>> I don't think so. Though I don't have
>> numbers on this, I would be willing to
>> bet that the microchip has created far
>> more work than it has displaced. A
>> whole complex multinational industry has
>> been created around it. Granted,
>> however, that most of the people who
>> were displaced would not have picked up
>> the newly created jobs.
>>
>> While it is true that the rate of
>> unemployment in the industrial world is
>> now higher than it was before the
>> computer, I would suggest that this is
>> not because of the computer. It is
>> probably due to factors such as slowed
>> growth after the destruction of world
>> war II was repaired and the decline in
>> some of the more traditional sectors of
>> the economy, such as mining, agriculture
>> and fishing. Other probable factors are
>> rigidities in the wage structure in the
>> case of Europe, the end of the Cold War,
>> migrations from poor parts of the world
>> where unemployment is usually not
>> measured to wealthy parts whre it is
>> measured, etc.
>>
>> Thomas:
>>
>> And so your exponential growth idea can
>> just as easily be applied to an
>> invention that negates our usefulness in
>> the production of things and eliminates
>> the need for our participation in the
>> creation of things.
>>
>> Weick:
>>
>> I wasn't refering to "exponential
>> growth". What I was talking about was
>> surges of growth following a major
>> innovation - the idea first formulated
>> by Schumpeter. While blowing away some
>> industries, it creates whole new ones.
>> Even the new industries grow old and are
>> in turn displaced by something new. The
>> growth process is not exponential. It's
>> jerky and uneven. Fast at times, slow
>> at others, and at times even negative.
>> While the general trend for the past two
>> hundred years has been upward, it could
>> hardly be characterized as being
>> exponentially upward.
>>
>> <snip>
>>
>
>
>--
>
>________________________________________________________
>
>Josmarian SA [EMAIL PROTECTED][EMAIL PROTECTED]
>UK tel/fax: 0044.181.747.9167
>French tel/fax:0033.450.20.94.92
>Swiss tel/fax: 0041.22.733.01.13
>
>L'aiuola che ci fa tanto feroci. Divina Commedia, Paradiso, XXII, 151
>_________________________________________________________
>
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