A quote caught my eye the other day: “Gross National Product measures everything, except that which makes life worthwhile.” — Robert Kennedy.
I agree with this on so many levels. Acknowledging that I am no economist, for me the market value of all products and services produced in one year by Canada has very little to do with my quality of life, and perhaps has more to do with encroaching upon it.
GNP or Gross Domestic Product calculations both include a sum of consumption, investment, government spending, and net exports. I don’t care to get into a discussion about foreign ownership so I will simply refer to GDP for simplicity.
In terms of consumption, we keep being told to buy more, yet I don’t see how this can help us, except with a false sense of reality and increased GDP. We have lost the ability to differentiate between need and want, and are now applauded by marketers and our governments for our addiction to spending. We are lauded until the house of cards falls down, and then someone says, “Well, they should have known that they couldn’t afford all of those things on their income.”
Investment captures spending on new houses, and, new business investment in equipment or facilities.
Regarding the first, new housing developments are being thrown up across the country at breakneck speeds. While this definitely improves the GDP, I hesitate to say that these cookie-cutter houses add to the charm of a neighbourhood and aren’t built as solidly as older construction. The cost of building these new “developments” on some of Canada’s most fertile land in southern Ontario is completely ignored by GDP.
New mines are hailed by GDP calculations, while those who live in the area, or thought they owned the land through treaty rights, might have something else to say about this. Their claims on the land are seemingly less important than the rush toward progress.
Investing in a new power plant also increases the GDP, but then what happens when the project isn’t completed?
With a nice segue there, I’ll move right into government spending, which includes new investment, public servants’ salaries, and military spending. Even though it increases GDP, can most of us say that an increase in military spending or in politicians’ salaries is going to make our lives incrementally better?
Net exports are the last part of the equation. While an increase to exports is nice, GDP doesn’t factor in the hardships to the domestic market when prices offered to the export market are lower than what locals pay (read electricity as one example.)
Imports are subtracted from exports, as they are already covered in consumption and investment. However, I feel like I should go out on a limb here and say that a great majority of the imports we are getting from across seas will undoubtedly end up in our landfills within a couple years (dollar stores be damned) and the irony is that we may even pay to have our garbage problems, including recycled goods, sent back to those same countries later on.
A few more thoughts that strike me are that home-cooked dinners typically don’t add as much to the GDP as buying fast food and pre-packaged dinners, and adding insult to injury, the obesity crisis adds to health-care costs -which also help the GDP.
Friendship, sunsets, hugs, compassion, forgiveness, love, and community all add nothing to the GDP.
The GDP rises with increased electricity bills, but it doesn’t factor in senior citizens sitting in the dark and cold not turning on their lights and furnaces until a certain time, in order to not be gouged on their fixed incomes. It doesn’t reflect the effect of moving funds in education away from the arts to other more “important” areas. (Who needs creativity anyhow? Oh, wait — isn’t creativity the foundation of innovation that is supposed to propel us forward as a country?)
In review, GDP measures our industrial output, but neglects to mention the harmful effects of industrial by-products and waste affecting the environment. Similar to not taking into account Mother Nature’s health, while the GDP benefits from moms and dads both heading to work, it doesn’t look at the overall decline in the “health” of the family unit.
With less time spent with aging parents and children as the dual-incomers head to the office earlier and stay longer — that’s OK, just remember to buy them a present, because that will add to the GDP.