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by Alan Durning

Today, March 18, 2008 is the fortieth anniversary of one of Robert F. Kennedy's most famous speeches, given just months before his assassination.

In it, RFK performed a rhetorical evisceration of our national economic report card, Gross National Product. You can watch a great new video of his remarks, prepared by the Glaser Progress Foundation. He said:

"Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. . . . Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans."

His words have circulated in the writings of economic critics ever since. Yet Washington, DC has done essentially nothing to correct the flawed accounts, until now. There's now a chance for action.

Last week, US Senator Byron Dorgan held hearings on GDP accounting and declared his intention to improve it. (GNP has given way to GDP in public discourse, but there are no important differences between them.) His timing couldn't be better. Outside of Washington, economists and statisticians have been quietly elaborating methods for giving the nation a better tally of its prosperity. A National Academy of Sciences panel, for example, has laid out an exhaustive, sober, and detailed plan for issuing regular reports on several "satellite accounts" in tandem with the monetary tally of GDP. The present administration stopped the Department of Commerce from adopting the improved methods.

A new president, supported perhaps by Senator Dorgan and like-minded leaders, will have the opportunity to seize the challenge RFK threw down four decades ago. The implications could be broader than you'd imagine. For example, whether we're in a recession or not depends entirely on what our system of national accounts includes and excludes.

Imagine the news stories that might follow if satellite accounts were published along with GDP figures: "GDP up; parents' time with kids plummets." "GDP flat; education surges." "GDP and resource depletion both soar."

A decade of such headlines might refocus our national attention. It might spur us to organize our society to win on measures more meaningful than gross production: things like the health of our families, the strength of our communities, and the integrity of our natural heritage.

A few hours of hearings on Capitol Hill might not seem like much. But it was at least a small watershed. In his testimony at the hearing, Dr. Steven Landefeld, who runs the Department of Commerce bureau that tracks GDP, mentioned that in his thirteen years in that role he has never before been asked before a Congressional committee to discuss his agency's work. Not once. Until last week.

Somewhere, Robert F. Kennedy is smiling.

See original story: Worldchanging.com  
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Comment by: auntiegrav (auntiegrav) (Oct-27-2008)   
Thanks for this article, David.

Our measurements sometimes shouldn't be measured. It seems that every time something gets put into law or a spreadsheet, it involves exploiting the margins of the sheet to suck money into the middle of someone's profit curve. Gross Success Product or Human Decency Product might be better measured by how many high school graduates stay within 200 miles of their hometown, how many hours someone works to put food on the table, but only if the latter includes the farmer growing the food...no more of this "non-farm" employment or "non-farm" income. Farmers are Americans, too.

I read about a study which evaluated workplace productivity, and the companies which focused on maximizing time off had the highest worker utilization rate (productivity) vs. all of the Deming-type efficiency models which whipped people through 'programs' and 'training' and 'discipline'.

Less is More.
  
Comment by:  Wavehunter (William Coffin) (Oct-17-2008)   Web site

Right! GDP/GNP affect policy, yet what they are based on makes very little sense. From an environmental angle, if I chop down a tree and turn it into matches to sell, that has a positive effect on GDP but a negative one upon the earth.

But even in strictly economic terms it makes little sense: if my PC dies and I fix it myself, the GDP is $0; if I pay someone $100 to fix it, the GDP is $100. There's a numerical but no practical difference between the two actions, and the economy has not benefited by the transfer of $100 from me to the PC repair person.

This sort of false accounting is what gave so many a mistaken air of optimism before the recent crash. They believed the figures, and some still do. But when the market value of a company changes by 8% in a day, the fact is that neither the 'before' nor the 'after' figure reflect that company's true value.
  
Comment by:  PT (David Alexander) (Oct-17-2008)   Web site

I also ran into a Happy Planet Index (HPI) and a Genuine Progress Indicator (GPI). I may write more about this topic... as you have put your finger on it, the re-positioning of our basic value systems is THE long-term answer to the environment crisis. Satisfied, engaged people are able to control birth rate and consumption - if we had a far higher HPI, GPI and/or HDI, these current environmental problems would not be taking place. Right?
  
Comment by:  Wavehunter (William Coffin) (Oct-17-2008)   Web site

A timely idea trawled up from the past. I read recently that the destruction of the rainforests is already costing the world much more than the destruction of the financial system, but because so many of us have been conditioned to share the false values of the stock exchange we have largely ignored this.

We already have the Human Development Index which may be a step forward. How many news organisations reported that the USA recently dropped four places in a world ranking by HDI?

  
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