Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Caveat: I am not an economist, though I've read a fair amount of critique by dissident economists... anyway I keep feeling that all these discussions miss what I might call the "real point". They focus on jobs, employment, and that oughta-be-discredited holy grail of "Growth" (hello? it's a finite planet, folks), as measured by the oughta-be-even-more-discredited metric of GDP. And by these metrics (taken wholly from within the context of markets and finance) they attempt to decide whether one country's pol/econ system is "better" or "worse" than another.

If I were looking to figure out "what's wrong with," or what's right with, a polity, I would start with different metrics. Life expectancy would be a big one -- if a country's average life expectancy is declining, that seems like a bad indicator. I would be interested in the percentage of people who had paying jobs, but I would be even more interested in the distribution of those jobs and the pay scales -- i.e. does "employment" mean scraping a living together by holding down 3 part-time jobs with no benefits, while spending 20 percent of one's meagre salary on the expenses of running a car to shuttle between the 3 jobs? or does it mean a secure job with an adequate paycheck, with a reasonable commute at a manageable expense? If the average income of Country X is Y, is that because there are ten multi-millionaires making a zillion bucks an hour while everyone else is making minimum wage? i.e. what's the Gini factor -- what percentage of the country's wealth is owned or controlled by what percentage of the people? Geographical mobility (freedom of physical relocation) is possibly a good thing, but how much class mobility is there? what are the odds that a child born poor will remain in the poverty class for life?

Other metrics I would like to examine would be literacy, quality of education (how competitive are the young people of Country X with their counterparts worldwide), number of years of education completed by the average person; investment in technological/intellectual innovation vs investment in litigious intelprop defence of existing tech/concepts; infant mortality and morbidity; nutrition (or malnutrition); percentage of homeless people; number of personal bankruptcies per capita per annum and reasons for same; average personal savings; average age of retirement; size and weight of the "black economy," i.e. organised crime, drugs, arms, prostitution; percentage of the population that bothers to vote; percentage of national wealth derived from destructive vs constructive commerce (what percentage of industrial sector is dedicated to arms production and sales, etc). And of course I would want to see an energy/toxicity audit: is Country X poisoning its people with industrial toxins? what is its contribution of greenhouse gases? how wasteful is its energy usage pattern and how vulnerable is it to rising fossil fuel prices in future?

My point -- sorry to be typically long-winded -- is that Country X could have a booming economy with nearly full employment, massive growth, a "flexible" labour force, and all the rest (i.e. it could look "good" according to the limited metrics being discussed) and yet be a zone of misery, disease, premature death, illiteracy, a permanent underclass, near-slave labour, etc., with a dependence on cheap fossil fuel so complete that it will likely fall apart when prices rise. There's an underlying assumption that if "the economy" is doing well, the people are doing well and the future looks bright. I think this assumption needs to be deconstructed and fast -- esp in the light of the WB/IMF's spectacular successes over the last 20 years in immiserating whole populations in the name of "saving" their economies -- and of Bill Gates' recent comments on the beauty of the Chinese labour market. Economies can be made to "do well" (ostensibly and for a limited time) by asset-stripping, looting, immiseration of workers, and unsustainable resource extraction. I wonder, at first glance, is the EU being criticised for not doing these things?

I would even suggest that the maximally "efficient" economy will inevitably be one which inflicts gross human suffering and environmental damage, so long as we continue to define "efficiency" as the maximisation of growth and profit extraction. Many criticisms of the EU seem to focus on "inefficiencies" which imho reflect a superior quality of life for real, living human beings. Which leads me to an essential question: what is "an economy" for, if not to maximise the happiness of the people who participate in it? If the purpose of "an economy" is solely to concentrate wealth in the hands of a small elite at the expense of the majority (this seems to be what neolib capitalism is best at), then can we distinguish such a system from good ol' feudalism?

None of this solves the concrete issues of tax revenue, public service provision, etc. being discussed. I'm ducking those issues for the moment. But it does raise (for me) serious concerns about the direction of public discourse in our era. Quality of life, it seems to me, should always trump economic indicators when assessing the success of a polity. Otherwise we fall into the same mindset that fuelled the crash programmes of industrialisation in China and the USSR during the Communist years: quality of life is irrelevant, what we want is Productivity and lots of it...

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Thu Jun 23rd, 2005 at 10:02:38 AM EST
Yup, and that's a whole other kettle of fish. Currently I'm trying to understand what the criticisms are. Slicing and dicing them is my next project.

The basis of the comparisons is one of the  things I want to look at in a little detail. It's pretty widely accepted that GDP is a bad way of comparing economies since it pretty much rewards wasteful and destructive activities.

See Blair's speech today in another diary. He almost explicitly repeats the assumption that an economy with good metrics will be good socially.

by Colman (colman at eurotrib.com) on Thu Jun 23rd, 2005 at 10:40:22 AM EST
[ Parent ]
I first became interested in "bad metrics" in a rigorously quantitative way by reading Daly and Cobb, who suggested a fairly elaborate, thought-out alternative to GDP for measuring national well-being.  I think several proposals along these lines have been floated, including  a brief attempt by the King of Nepal to establish a National Happiness Index...

More food for thought from Gar Alperovitz... on the idea that "wealth should benefit the community directly."

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Thu Jun 23rd, 2005 at 12:32:27 PM EST
[ Parent ]


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