15 May 2013

Economic growth is not a valid goal

In April the British Government's new Chief Scientific Adviser, Sir Mark Walport, set out his priorities his first major public speech since taking office. His 'five key themes' for scientific advice in government are:
1. Ensuring that scientific knowledge translates to economic growth;
2. Strengthening infrastructure resilience for the engineered world of transport, energy, the built environment and telecommunications and also the natural world;
3. Underpinning policy with evidence;
4. Harnessing science for emergencies; and
5. Providing advocacy and leadership for science. Source
It's the first that causes me most concern (as it does George Monbiot). It reflects and amplifies the widespread view that economic growth is an end in itself. But economic growth, especially as measured by Gross Domestic Product (or GDP per capita), is not an end in itself. It is an indicator of economic activity. As a measure of well-being it is deeply flawed. It does not distinguish between helpful and harmful economic activity. It puts no value on any activity that bypasses the monetary economy. So it ignores leisure time, the environment, crime, health, and other things that are meaningful to natural persons. Crucially too, it ignores how the economic output it purports to measure is distributed within society.
The more than minimal fraud is in measuring social progress all but exclusively by the volume of producer-influenced production, the increase in GDP. J K Galbraith, 'The Economics of Innocent Fraud', Penguin Books, 2004.
This identification of societal well-being has permeated the thinking of our politicians, officials and now, it seems, our top scientists. We are just not in the habit of formulating policy goals in terms of outcomes that are meaningful to ordinary people. So, by default (or by conscious fraud), GDP per capita has become the de facto indicator of social well-being. We need to think urgently about changing this.

No comments: