I discussed a new report on the future of GDP as a measure of prosperity on Times Radio at 11.20 last night.
The report is excellent. The Oxfam website notes in its introduction to the report:
A staggering sixty-five per cent of women's working hours are unpaid every week and excluded from official measures of economic activity, an Oxfam report has found. Radical Pathways Beyond GDP highlights how unpaid care - which accounts for forty-five per cent of all adults' working hours each week globally - is excluded from gross domestic product (GDP) calculations.
The discussion paper looks at how the over-reliance on GDP warps governments' priorities. Women carry out the majority of unpaid care - nearly 90 billion hours a week.
There is a growing consensus among policymakers and institutions that GDP is no longer fit for purpose as the primary indicator of economic and social progress. By excluding many factors that contribute to the overall health of the economy and wider society, the metric steers policymakers towards priorities that are fuelling inequality, gender and racial injustice and climate breakdown. The report argues that transformative alternatives to GDP are urgently required and that narrowly defined growth should never be a primary objective or end goal.
The report considers many of the weaknesses of GDP and represents a real attempt to boost the narrative around this issue. I may not agree with it on every detail, but I welcome it.
I was able to quote Robert Kennedy in what I said last night. He said in 1968, shortly before he was assassinated:
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 does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.
He was right.
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A quote from Clement Attlee:
Charity is a cold, grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim.
This is good to see Richard.
Carnegie UK have also published some work on UK GDP –
https://carnegieuktrust.org.uk/publications/growing-pains-commentary-on-the-strengths-and-limitations-of-gross-domestic-product/
https://carnegieuktrust.org.uk/publications/gross-domestic-wellbeing-gdwe-an-alternative-measure-of-social-progress/#:~:text=Gross%20Domestic%20Wellbeing%20(GDWe):%20an%20alternative%20measure%20of%20social%20progress,-Download&text=Gross%20Domestic%20Wellbeing%20(GDWe)%E2%84%A2,a%20measure%20of%20social%20progress.
Thanks
Probably one of the most damaging weapons in the neoliberal arsenal.
Kennedy was right
I think the first paragraph of Kennedy’s speech is just as relevant Richard
” Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children’
Agreed
I wsa making some of thsoe points too – especially about the lack of freedom women have to move without harrassment, which goes uncounted in GDP.
This is really important. As I mentioned the other day, clearing up storm damage raises GDP but encouraging storms in order to raise GDP would be ridiculous.
In the (unlikely) event that we avoid recession it will not make us “better off” because the number does not reflect that spending has switched from things that make us happy to the essentials for survival.
Richard, you will know this better than me, but is GDP a good number to use to forecast tax receipts? It might be its only use!
It is not useful for that: given it does not include many tax bases whiulst some parts of it are amde up it is pretty useless for that purpose.
As far as I know its only use was to help governments manage their economies in WW2 in ways not previously known.
After a major earthquake there is always a spike in Japan’s GDP.
May I offer this conjectural musing?
GDP only counts what is selected to measure in the economy (largely provided by ideologically driven, and profoundly inadequate economists). What is selected is thus led principally by neoliberal economists who observe economic activity through a special distorting lens; as a private, and largely corporate activity. I suggest, as a matter of custom and precedent that a smaller proportion of the total economically effective activity in the public sector is selected for measurement in GDP, than in the private sector, or is warranted by its economic impact simply because of selection bias.
Think of problems, such as labour availability and health. The effects of Covid have reduced the pool of Labour available in the UK economy (through Brexit, withdrawal from the labour market, or even long-covid), and this is now seriously impinging on GDP and wages; but the health of the community, and the maintenance of a healthy labour force through NHS activity (as a measurable economic benefit in ensuring the availability of labour for use, which is an outcome of NHS activity; we may call it ‘output’) is not measured; although the absence of the NHS would have a very damaging effect on labour availability (indeed that narrower public health activity which is currently measured by GDP should rather be considered a by-product of NHS activity).
Alternatively, look back into this dark corner of a ‘private’ free market’; perhaps the only one, that is free at the point of use. We stopped children working in coal mines in 1842, and now do not allow children to work. Yet there are children who are obliged to care for parents or siblings in very difficult and often straitened family circumstances. The activity provided, if supplied by a private company in the care sector (directly or indirectly in goods or services) would count as part of GDP. Provided free by children? It just disappears altogether; rather like the children themselves, or the public support they need.
Another problem is the idea that GDP measures a countries “wealth” and that the higher the GDP the more the country can afford to do. So you hear people say things like “We will have to grow the economy (meaning increase GDP) before we can afford to spend more on the NHS.” The mere fact that government spending is part of GDP shows that there must be something wrong with that idea.
Agreed
On the early morning news this a.m. I was hearing about stubbornly low productivity levels in the UK.
It’s no wonder they appear to be low if we are not counting women’s caring input and shows you the effects of the decisions we make over what we count and do not count.
Needs more work – obviously.
Thank you for signposting this report, which I found thought-provoking. Particularly in view of the veneration of “growth” in some quarters which makes people fearful of switching away from fossil fuels, or allowing human populations to decrease. Since much growth would turn out to be a move of activity from one part of the economy (informal and currently uncounted) to another (counted) if the measure properly measured all activity of value, economies would appear to be much less driven by growth.
Your Kennedy quote is excellent, another which is apposite is “not everything that counts can be counted, not everything that can be counted counts” (various attributions). How do you put a number to things that count but can’t be counted? That is important because having a single number to track the economy has been found to be useful, and replacing GDP by a better measure requires that new parameter to be quickly estimated from available data, consistently across different countries.
In fact my only concern is the way the report labels the discussion as relevant primarily to feminist and decolonial thinking, making it something less likely to be taken seriously as a wider issue that could improve economic comparisons and planning.
Thanks
Richard Douthwaite made the point that the West of Ireland has a very low GDP basically people were not doing things for money so the quality of life wasnt bad
Maybe later in his life.
It was grim in earlier years.
On NewsNight last night, we had Katy Charabortty, Head of Policy at Oxfam was interviewed along with a journalist , Gillian Tett, Chair of the Financial Times editorial board who had qualified as an Anthropologist. I was expecting the usual confrontation but was pleasantly surprised. Ms Tete said this a moment in history to rethink. There was a lot of overlap.
Encouraging
To my surprise there was in my Times Radio interview as well. Not total, but more than expected.
Yes, I was pleasantly surprised, and I think it took the interviewer by surprise.
Nowadays it is expected that they have an oh-so-predictable agenda to adhere to, which makes it very entertaining when they struggle to retain traction for it!
Gillian Tett and the FT as a whole are much more challenging of today’s capitalism than one might expect. Almost left wing at times! Tett’s books are worth reading as are Rana Faroohar’s, another FT alumni. I’d add to them, John Burn’s Murdochs’s data analyses.
As for GDP, the more you learn about it, the more you realise how dysfunctional it is as a measure of any kind of real progress. Carnegie are very good and have been on the case for a while. They are also talking to the Doughnut team as the Wellbeing measurement framework is complementary to Doughnut.
I recall Steve Keen saying ;
“Exponential economic growth is toxic to biological systems.”.
I would add…”Life itself”.
50 years after The Club of Rome’s “Limits to Growth”, “Growth” remains the priority of mainstream political parties. The irony is it’s seen as essential to support the greening of our economy!
Not to take anything away from the report, I’m nevertheless puzzled by the claim that women in the UK provide “nearly 90 billion hours a week” of unpaid care. Even if every one of the nearly 34 million females in the country (of all ages) worked for every one of the 168 hours in a week, that still comes to less than 6 billion hours. I wonder if it should really say 900 million hours, equivalent to 30 million females providing 30 hours of care per week (not saying that’s the actual statistic, just that it seems a more likely figure.) On the other hand, I confess I haven’t read the full report, so maybe I’m missing something?
It does seem a lot…
I know some who might though…
That is a great catch.
The claim in the Oxfam report is footnoted (10) to an ILO report but infuriatingly they don’t say which of its 500+ pages gives that number.
https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_633135.pdf
The nearest I get is the claim (based on 1997 and 2012 data, page 374 of the ILO report) that UK women spend on average 261 or 229 minutes per day on unpaid work. And for UK men it is 127 and 113 minutes per day. Not all unpaid work is necessarily care work.
30 million women working four hours per day is about 840 million hours per week. Not 90 billion.
90 billion hours per week, divided by the whole population of around 70 million, is about 1300 hours per day per person. Or about 180 hours per day for every single person in the country.
I wonder if they meant hours per year not per week.
It is still a large number and the error does not undermine the main point that a very significant fraction of work – and particularly women’s work – goes uncounted, but it seems to be wrong by about two orders of magnitude, which by any standards is a whopper.
Thanks, and agreed re the conclusion
GDP and GB (Great Britain) are obviously inter-twined. What does GB currently stand for? It should be obvious it currently stands for Greatly Brain-Washed by the Greatly Greedy producing the Greatly Gormless to deliver a Greatly Backward country when what it should be doing is striving to create a Greatly Balanced country.
Who instills the concept of balance in children? Usually a primary carer or carers by being there to love and care for them whilst also teaching them what morality is all about (continuously balancing the needs of self with those of others). How can they do this when they are working full time either because they are having to or put career before their children? How can they also do this satisfactorily if their children have physical and/or mental health problems (or indeed they themselves) and can’t get the healthcare on a timely basis to address them? A great deal has to been done in GB to reassess what GDP truly needs to cover!