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That is the
challenge. How to distribute the incredible wealth of our
economy. The communists/socialists had an ideology for a time when
goods could potentially be free, but had no viable economic system to get to
that state. The "capitalists" seem to have solved the production problem
but have no ideology of what to do next, of how to distribute goods when they
are plentiful.
Arthur
Oddly enough, though, the very amount of wastage
involved in the mutually neutralising or out-and-out desctructive transactions
may suggest that there is a great excess productivity lurking in the economy,
'excess' in the sense that were our resources well-directed and well-used, we
could easily provide for all societal needs, with resources left over for
profound investments, and 'even' the building of an interesting culture (along
the lines that Ray is urging).
Lawry
In much
the same way if the negative externalities (and social costs of all
sorts) were factored into our GDP we would find that our economy is
much less robust than it presently seems.
arthur
This is reminding of Hernando de Soto's
remarkable book and theses, that 3rd world countries have large grey
market economies, not measured by GNP/GDP. He argues that if these grey
market transactions were legalized or recognized legally, that the
economies of these countries would be seen as much more robust that they
presently seem.
Cheers,
Lawry
The possibility that GNP may be overstated, as in my previous
posting, is only one of its alleged sins. Many people wondered what else
it may be hiding and what it reall tells you. A strong
condemnation of using GNP or GDP as an indicator of societal progress
appeared in Atlantic Magazine in October 1995 under the title "If the
GDP is Up, Why is America Down?". It was authored by Clifford
Cobb, Ted Halstead, and Jonathan Rowe. Here is a sample paragraph:
The GDP is simply a gross measure of market activity, of money
changing hands. It makes no distinction whatsoever between the
desirable and the undesirable, or costs and gain. On top of that, it
looks only at the portion of reality that economists choose to
acknowledge--the part involved in monetary transactions. The crucial
economic functions performed in the household and volunteer sectors go
entirely unreckoned. As a result the GDP not only masks the breakdown
of the social structure and the natural habitat upon which the
economy--and life itself--ultimately depend; worse, it actually
portrays such breakdown as economic gain. I've had to refresh myself on the meaningfulness of national
accounting measures recently in connection with a project I'm working
on. Here's what I wrote on the idea, espoused by many people, that
GNP should be extended into "full cost accounting". It's based on
Herman Daly. So if it's wrong, blame him.
"The usual measure for national product (GNP) consists of two
elements. One is product that must be used to replace or
replenish machines and equipment that have been used to produce the
national product, or “depreciation”. When the latter is
subtracted from national product one is left with the other element,
the product that is available for the current purposes of investment
and consumption. This is termed “Net National Product
(NNP)”. The problem, however, according to proponents of
full-cost accounting, is that depreciation estimates and other
“costs”, as conventionally measured by national accountants, are
understated and hence NNP is overstated, giving a false impression of
available product.
To move to a full-cost accounting system, two adjustments
would have to be made. One is simply to extend the principle of
depreciation to cover consumption of natural capital stocks depleted
through production. The other is to subtract expenditures necessary to
defend society from the unwanted side effects of production and
consumption.
The concept of consuming natural capital is easily
understood, especially in an economy dependent on non-renewable
resources, but even in one dependent on renewable resources that are
over-exploited, such as cod in Newfoundland. Once the resources
are gone, they are gone. They cannot be replaced, and if enough
of them are used too quickly, an economic decline is
unavoidable. Defensive expenditures, on the other hand, are
essentially unwanted by-products of the production and use of national
product. They can include the over-exploitation of
envi-ronmental resources in the general course of economic growth, the
costs associated with urbanization (pollution, crowding, commuting
etc.), and the costs of unhealthy consumption and behavioral
patterns.
Instances of putting full cost accounting into practice are
rare. Statistics Canada has worked on the development of a new
component of the national accounts that will integrate environmental
factors into the traditional Canadian System of National
Accounts. These new accounts would provide data on the physical
quantities and monetary values of Canada's natural resource stocks; on
the depletion and uses of these resources; on waste emissions to the
environment; and on environmental protection expenditures."
Ed
Ed Weick
577 Melbourne Ave.
Ottawa, ON, K2A
1W7
Canada
Phone (613) 728 4630
Fax
(613) 728 9382
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