Media Clipping — June 18,1999, The Daily News, Halifax

Measure of Success

By Ronald Colman, Special to the Daily News

First of two parts

We've got it all wrong

There is no more pervasive and dangerous illusion in our society than the equation of economic growth with well being and prosperity all of us—politicians, economists, journalists, the general public—are hooked on the materialist myth "more is better."

When our economy is growing rapidly, it is called robust, dynamic, strong, and healthy. Anaemic growth signals recession and even depression. If people spend less, "consumer confidence" is "weak." Increased car sales signal a "buoyant recovery" The more we produce and spend, the more the GDP grows and, by implication, the "better off" we are.

This was not the intention of those who created the GDR Simon Kuznets, its principal architect, warned 40 years ago: "The welfare of a nation can scarcely be inferred from a measurement of national income ... Goals for 'more' growth should specify of what and for what." Our growth statistics were never meant to be used as a measure of progress, as they are today

Are we better off as a result of decades of continuous economic growth? Certainly we have bigger houses and more cars, appliances, and homeentertainment equipment.

We are also less peaceful and secure, three times more likely to be victims of crime than our parents a generation ago. Average unemployment rates have risen each decade. Our jobs are more insecure. Our debt levels are higher. Real incomes are declining. Child poverty is increasing. Economists predict that, for the first time since the Industrial Revolution, the next generation will be worse off than the current one.

Blind growth has undermined our naturalresource wealth, produced pollution, and changed the climate in a way that threatens the planet.

A recent U.S. poll found 72 per cent of Americans had more possessions than their parents, but less than half said they were happier than their parents.

NATURAL RESOURCES DEVALUED

Activities that degrade our quality of life, such as crime, pollution, and addictive gambling, make the economy grow. The more fish we sell, and the more trees we cut down, the more the economy grows. We assign no value to the natural resources on which our economic wealth is ultimately based, and we count their depletion as gain in our growth statistics. This is like a factory owner selling off his machinery and counting it as profit, with no regard to the reduced flow of goods and services in the future.

Growth is simply a quantitative increase in the physical scale of the economy and tells us nothing about our well being.

We all want a safer and more peaceful society with less crime, a clean environment and healthy natural resources, greater economic security and less poverty better physical health, more free time, and stronger communities. We want to become wiser, freer, and more caring.

But we will never leave our children a better legacy until we cut through the myth that "more'' means "better," and until we stop gauging our economic "improvement" by how fast the economy is growing.

THE U.S. GROWTH MODEL

In Canada, we are enamoured with the "dynamic" American economy and its rapid growth rates. But how often do we ask, as Simon Kuznets counsels, what is driving that growth?

One of the fastest growing sectors of the American economy is imprisonment, at an annual growth rate of 6.2 per cent per year throughout the 1990s. One in every 150 Americans is behind bars, the highest rate in the world along with Russia, compared with one in 900 Canadians and one in 1,600 Nova Scotians.

But having a more peaceful society and spending less on prisons, burglar alarms, and security systems actually shows up as disadvantage in our GDP and growth statistics. The booming U.S. security industry adds $40 billion a year to the economy with most sales now going to schools. Is this our model of a "robust" and "healthy" economy?

Gambling is another rapid growth industry—a $50billionayear business in the U.S.

Divorce adds $20 billion a year to the U.S. economy Car crashes add another $57 billion. Prozac sales have quadrupled since 1990 to more than $3 billion—a sign of progress?

Toxic pollution, sickness, stress, and war all make the economy grow. The Exxon Valdez contributed far more to the U.S. economy by spilling its oil than if it had delivered the oil safely to port, because all the cleanup costs, lawsuits, and media coverage added to the growth statistics.

GROWTH AND INEQUALITY

Measuring well being by growth rates does not tell us how many people have been left behind by the growth spurt of the l990s.

The richest one per cent of American households owns 40 per cent of the national wealth, while the net worth of middleclass families has fallen steadily through the l990s due to rising indebtedness.

In Canada, neither GDP nor in equality have grown as rapidly as in the U.S. But despite the economic recovery of the l990s, child poverty has increased by 60 per cent since the House of Commons unanimously vowed to eliminate it in 1939. Here in Nova Scotia, real income after taxes and transfers has fallen by 24 per cent for the poorest 40 per cent of Nova Scotian families since 1990. There is no guarantee the tide of economic growth lifts all boats.

Measuring progress by the sum total of economic activity is like a policeman who counts his contribution by adding up all the street activity he observes. The lady walking her dog, the thief stealing the car, the children playing on the corner, the thug hitting someone with a lead pipe—all are recorded equally

Like the policeman's log, our growth statistics make no distinction between economic activity that contributes to wellbeing and that which causes harm. We expect more of our policeman, and we should expect no less of our leadership.

But surely it is argued, growth is necessary to create jobs. We'll explore that assumption tomorrow. See: Part two: A Better Measure

Dr. Ronald Colman was professor of political science at Saint Mary's University from 1993 to 1997. He is now director of GPI Atlantic, a non-profit research group that is constructing an index of sustainable development for Nova Scotia.

Copyright © 1999, Ronald Colman

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