Waking up from our illusions

"How much of this is real? How much of the economic growth of the past 60 years? Of the wealth and comfort, the salaries and pensions that older people accept as normal, even necessary? How much of it is an illusion, created by levels of borrowing – financial and ecological – that cannot be sustained? [...] To sustain the illusion, we have inflicted more damage since 1950 to the planet's living systems than we achieved in the preceding 100,000 years."

- George Monbiot, Out of the Ashes.

Monbiot again is making the case that the church ought to have been making all along (and in some cases, is making). Material prosperity is not the route to the good life; the more stuff we accumulate, the more anxiety crowds out our joy, the more social bonds are weakened, the more the living spaces of the planet are degraded. Of course, a certain basic level of material well-being is required, the scriptures acknowledge as much - "if we have food and clothing, we will be content" (1 Timothy 6.8) - but our society has long surpassed the foolishness of the rich farmer Jesus warned about in Luke 12.13-21. We are missing the plot, messing about with the shallows of life while the depths remain unplumbed. Personally, we could be plunging into more through having less stuff to worry about, and collectively we could be pursuing things that are better than growth.

Go and read Monbiot. Then listen to Jesus tell us how to be truly alive:

He said to his disciples, "Therefore I tell you, do not worry about your life, what you will eat, or about your body, what you will wear. For life is more than food, and the body more than clothing. Consider the ravens: they neither sow nor reap, they have neither storehouse nor barn, and yet God feeds them. Of how much more value are you than the birds! And can any of you by worrying add a single hour to your span of life? If then you are not able to do so small a thing as that, why do you worry about the rest? Consider the lilies, how they grow: they neither toil nor spin; yet I tell you, even Solomon in all his glory was not clothed like one of these. But if God so clothes the grass of the field, which is alive today and tomorrow is thrown into the oven, how much more will he clothe you—you of little faith! And do not keep striving for what you are to eat and what you are to drink, and do not keep worrying. For it is the nations of the world that strive after all these things, and your Father knows that you need them. Instead, strive for his kingdom, and these things will be given to you as well. Do not be afraid, little flock, for it is your Father’s good pleasure to give you the kingdom. Sell your possessions, and give alms. Make purses for yourselves that do not wear out, an unfailing treasure in heaven, where no thief comes near and no moth destroys. For where your treasure is, there your heart will be also."

- Luke 12.22-34 (NRSV).

Beyond GDP: policy by numbers

David Cameron has announced that he wants UK policy to be directed more by a measure of its citizens' general well-being than national GDP alone.

This is an important development.

The problems with basing government policy on GDP (as most nations do) are manifold. A war, an increase in the divorce rate or a natural disaster can each increase GDP, illustrating the fact that human economic activity is not identical with human flourishing. Of course, there is a basic level of material well-being required for a good life: nourishing and reliable food, safe water, shelter from the elements, somewhere comfortable to sleep, access to human relationships and perhaps a few other things (a dram of whisky from time to time, perhaps). But the bigger picture on which we base our social policy has to be bigger than just GDP. Yet in our obsession with measurement, we end up measuring GDP because it is so easily measured.

What can be counted, counts. That is at the heart of why GDP sends us up the wrong policy paths. Measuring what is easily measurable, we find we end up prioritising quantity over quality. The economy may be growing, but are our lives any better as a result?

There are various attempts at alternative indices. The UN supports the Human Development Index (HDI), a measure that relates per capita GDP to both life expectancy and education in order to suggest a more rounded picture of flourishing. This has the advantage of being still quite measureable, but still has GDP has a very significant component of the index, despite the fact that numerous studies (as well as traditional wisdom from many cultures) point out that beyond a certain level of material well-being, the benefits of extra personal wealth suffer from rapidly diminishing marginal returns. It also lacks any account of the ecological cost of the development in question, which could be (and often is) being gained at the expense of future generations.

Another measure is the Happy Planet Index (HPI), which focuses on the relation of life expectancy, subjective level of well-being and ecological footprint, thus claiming to measure how efficiently human well-being is delivered per unit of ecological impact. This approach gives a very different list of national rankings to the HDI (for instance, the USA comes 114th out of 143 countries studied, between Madagascar and Nigeria). Including ecological footprint sinks pretty much all the "developed" countries. For comparison, here are recent rankings of GDP per capita and here are recent HDI rankings.

Yet relying so heavily on self-reported levels of satisfaction (while trendy) has its drawbacks, as can be noted via the observation that the inhabitants of Huxley's Brave New World would have scored off the charts, and from counting the suspicious number of totalitarian, autocratic, repressive and/or highly corrupt societies that make it into the HPI top twenty.

And so while I am actually a big supporter of moving away from GDP-obsessed policies, I am ambivalent about the apparent necessity of replacing it with another number. Measurements are not irrelevant, and evidence-based policy making is a step forward in many areas. If we must have metrics, by all means let us develop better ones than GDP. But let the numbers be our servants, not our masters, since so much that is of the highest importance in the life of a society cannot easily be measured in numbers. Quality is not always reducible into quantities.

Humane economics: prosperity vs growth

"It's a story about us, people, being persuaded to spend money we don't have on things we don't need to create impressions that won't last on people we don't care about." Back here, I mentioned Tim Jackson and his idea of "prosperity without growth". He speaks more sense here, linking economics, ecology and human flourishing in ways that go beyond the many faults of our current GDP obsession.

Prosperity without growth

"Here is the story of [...] our consumer society. It is a story of us being encouraged, persuaded perhaps, to spend money we don't have on things we don't need to create impressions that won't last on people we don't care about - or worse still, who don't care about us. [...] It's a pathological system."

- Tim Jackson, 2010 Deakin lecture.

How can our economy continue to expand on a finite planet? Tim Jackson is author of Prosperity without growth: economics for a finite planet. A longish report with a similar title that I assume is related to the book can be downloaded for free from here. I haven't read much on this topic and haven't yet read Jackson's argument to know whether it is plausible, but unless we can wake up from the dream of endless growth (which turns out to be a nightmare), then we're toast.

"The economy is a wholly owned subsidiary of the environment, not the other way around." - Gaylord Nelson.
H/T Matt Moffitt.