Fortunately, Much of the Most Difficult Work (rethinking economic growth) Has Been Done

Sociobiology and neuro-economics, for example, are often posing and making exciting new research hypothesis and findings. Economist Erin D. Beinhocker writes in The Origin of Wealth: Evolution, Complexity and the Radical Remaking of Economics:

What is wealth? How it is created? How can it be increased?…New answers to these fundamental questions are beginning to emerge….from biologist, physicists, evolutionary theorists, computer scientists, anthropologists, psychologists, and cognitive scientists…..Modern science, in particular evolutionary theory and the theory of complex adaptive systems, provides us with a radically new perspective…

And, for the rethinking of textbook concepts–necessary, but overwhelmingly arcane to most people–the French government recently appointed two winners of the Nobel Prize in economics to head its Commission on the Measurement of Economic Performance and Social Progress.  (http://www.stiglitz-sen-fitoussi.fr/en/index.htm)

The Commission’s findings and recommendations, released in 2009, seemed radical to some people, but came as no surprise to most experts.  Historian Gar Alperovitz, for example, wrote in The Nation (“The New Economy Movement,” June 13, 2011):

As many scholars have demonstrated, the gross national product indicator is profoundly misleading: for instance, both work that generates pollution and work that cleans it up are registered as positive in the GNP, although the net real-world economic gain is zero, and there is a huge waste of labor on both sides of the effort. Precisely how to develop a “dashboard” of indicators that measure genuine economic gain, environmental destruction, even human happiness is one of NEI’s high priorities. Another is a detailed econometric model of how a very large economic system can move away from growth as its central objective. Related to both are earlier and ongoing Great Transition studies by the Tellus Institute, a think tank concerned with sustainability.

Unfortunately, mainstream media and academics in the U.S. quickly rejected such work as unnecessary, not useful, and “too French.”

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Comments

Mayu says:

The Report commissioned by the French government, the hard work done by some of the most brilliant minds in economics, seems to have suffered from terrible timing.
The report itself was written and published between 2008 and 2009, during the most severe period of the global recession. That France even had the motivation to request such a report is surprising.
Perhaps if the United States was experiencing great prosperity, the Report would have had a different reception here. However, towards the end of 2009, the nation was still experiencing the effects of economic decline while simultaneously debating another gargantuan topic: health care reform.
It may be that the United States sought to cope with perceived inadequate standards of living through better health care, rather than through a new measure of economic growth.
Regardless, our blind faith in GDP continues, and the political pugilism that resulted from the health care debate in the U.S. has revealed the difficulty of reform on any subject. It may be that this is a project and movement that will mature over a long period and come into fruition much later.

Joel L. Swerdlow, Ph.D. says:

Good points. (We will have to wait for the recovery (!!!) to see if blaming so much on the Great Recession was justified.)
BTW, why do you find French sponsorship of the Report surprising? French policies (and politics), for example, do an effective job of protecting their small farms and subsidizing long vacations for office workers. Both of these are GNP-inhibiting, happiness promoting goals.
That being said, even though most of the top economists working on their report were Americans, maybe we will not take such a report seriously until it is “made in America.”

Mayu says:

I’m actually not very familiar with French politics or policies, but I was surprised because when the Recession hit, it seemed as if everyone was focused more on the accuracy of predicting economic ups and downs, and less focused on taking sustainability and standards of living into account.
Maybe this was especially so in the United States, but it seemed as if we had an image of most people “scraping by,” which placed more basic services provided by the government ahead of other, perhaps more philosophical questions like reevaluating the GDP.
This can be seen in the correlation between economic growth and climate legislation. Notes a piece by the Center for American Progress: “The first Clean Air Act, Clean Water Act, Endangered Species Act, and Resource Conservation and Recovery Act (hazardous waste disposal) were all enacted when unemployment was 6 percent or lower. Unemployment is 50 percent higher now [in 2010]. Only four major environmental laws were enacted with annual unemployment over 7 percent, and none with unemployment greater than 7.5 percent” (Daniel J. Weiss, “Anatomy of a Senate Climate Bill Death,” 2010).

Joel L. Swerdlow, Ph.D. says:

“Reevaluating the GDP” as a “philosophical question”?
As this book proceeds, I hope to prove it is far more than philosophical–it is necessary for our survival and our happiness.

Thoughts?

Sorry, the comments are closed.