GDP growth no measure of how well we are doing.

(this piece first appeared in The Herald on 12 May 2017)

I don’t eat much sugar at all. In my experience, sugar and starch cause me to become fat and lazy. So I drink bitter coffee by day, red wine at night and water when I train. So I’m personally not too stressed about government’s plans to tax the consumption of sugar in the same way it taxes cigarettes and alcohol. Selfish of me perhaps? (for the record though, I don’t think the amount of sugar I put in my tea, or how many hours I spend watching TV or whether I spend enough time in gym are the business of government at all.)

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Bitter morning coffee at “Cafe Blend”

I think what interests me more is the game playing out as the sugar industry attempts, through the media, to argue the case against introducing such a tax. I recall that the initial attempts by the makers of fizzy cool drinks was to rubbish any of the science that has growingly begun to link increased carbohydrate intake with a number of ailments including diabetes, heart disease and even cancer. The merits of that discussion we will leave to another, perhaps more scientifically oriented, writer.

What I notice though, is that the sugar industry’s PR campaign has now shifted to how many jobs will be lost and the general impact that this new tax will have on the economy. The latest headline reading “Sugar Tax – blow to GDP!”… or something like that. And this is what I would like to talk about here today. Not Sugar, not tax, but our community’s continued focus on GDP growth as a measure of whether we are doing well or not. We seem do descend into a collective state of panic when Treasury projects a 0% growth rate. We seem all to be in awe of Indonesia or Ghana when it reports GDP growth of 7 or 8%. But if that GDP growth has occurred as a result of the economic activity resulting from the logging of thousand year old forests, or the activity of building roads and rail to move logs from the 1000 year old forest to the Port that was built for no reason other than parking big ships that will move these logs across the ocean, then can such 7 or 8% growth really be good for any country?

Because GDP growth, at the end of the day, is a simple measure of how much money has been spent in economy. So … to use cigarettes as an example. If a farm is bought to plant tobacco, that transaction is counted as part of the GDP, so it the cost of ploughing the field and planting the tobacco seed, harvesting, drying, transporting, rolling into cigarettes in huge factories, advertising, marketing….. all part of GDP, but also all the medical costs of people dying of lung cancer or buying twisps or patches in an attempt to free themselves from nicotine addiction. Each and every transaction in the value chain is counted in the calculation of the GDP figure. So perhaps the question that you and I need to ask is: “Is it automatically good for us just because it makes up part of the GDP figure?” (Because I suppose, if everyone suddenly stopped smoking cigarettes, those people who used to smoke would spend their money on something else and therefore still show up in the GDP figures.)

I am arguing that we need to develop of ourselves a more sophisticated measure of whether or not something is good for our community than the measure of GDP growth. A measure that reflects on the value that is added by the purchases we make with the money circulating though the economy. A measure that can distinguish the value difference between money spent on a bottle of imported whiskey or the planting of a fruit tree. (Both of similar value but one of lasting contribution to the well-being of the community). A measure that helps us decide whether or not it’s good for our community to build a new supermall outside of town, or a nuclear plant at Thyspunt or a new Chinese motor vehicle assembly plant at Coega. You see, what I am introducing is the question of how do we quantify the “qualitative”. We all know through life experience that some things, some experiences, some places are better than others. We all know this, but find it very difficult to argue or prove. We know that it is better to see our economy directed to spend money of the “better stuff”, but we also know that it is so difficult to adjudicate between two parties that claim that their stuff is better, that we just tend to abandon the whole concept of quality and focus more on what we can, without doubt, quantify, and that ladies and gentlemen, is why we have this obsession with GDP growth! Not because it is useful measure of if we are doing the right stuff or not, but quite simply because it can be quantified in such a way that invites very little dispute. But this is where you and I come in. We have a duty as individuals to be vocal and outspoken about what we as individuals view to be the “better stuff”. What is your favourite building? Your favourite place to view the sunset? Your favourite street vista? Make it an issue. We don’t need consensus in order for it to be reality.

Perhaps quality cannot be quantified, but that does not mean that it’s not real?

Author: buildingfreedomtoday

The World can be a better place.... But how? Taking the debate beyond the political, beyond the theoretical into the real economy, into the physical and spatial dimension where cities, landscapes and livelihoods take form.

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