Genuine Progress (& economists)

Tom Condit tomcondit at igc.apc.org
Fri Oct 13 05:03:40 MDT 1995


I haven't seen the October _Atlantic Monthly_ yet, but apparently
the cover story is from a San Francisco "think tank" called
Redefining Progress, and is about the contrast between what is
measured as progress and prosperity in conventional economic
terms versus what can be defined as progress in any real human
terms.

Suppose, says the San Francisco _Chronicle_ article on Redefining
Progress,

"A burglar ransacks your home, so you buy a $2,000 security
system. Cleaning up the mess, you trip over a drawer, break your
leg and spend $2,000 at the hospital. You become so depressed and
irritable your spouse pays a lawyer $6,000 to sue you for
divorce.

"Congratulations. You've just added $10,000 to the nation's gross
domestic product--the official gauge of the nation's economic
well-being. GDP measures the monetary output of the nation's
goods and services."

Redefining Progress has devised something called the Genuine
Progress Indicator.  They say that war increases GDP, but "leaves
a nation poorer in most respects. The same goes for cutting down
trees and auto accidents that stimulate car sales."

The GPI starts with official figures for personal consumption and
adds the value of unpaid housework and volunteer work, then
subtracts estimated cost of crime, pollution, environmental
damage, loss of leisure time, medical and repair bills from auto
accidents, commuter costs, etc.

By this measure, the Genuine Progress Index peaked in 1969 and is
now below its 1950 level.

I haven't seen the actual article yet, so I don't know how to
evaluate it, but I find the response of Stanford University
economist Michael Boskin absolutely fascinating.  Boskin says all
these things are hard to measure, and you don't know whether the
net impact is positive or negative.

"For example, he noted that long commute times--counted as a
negative in the Genuine Progress Indicator--may not cost workers
as much as they used to because so many drivers have cellular
phones."

I can see it now.  There you are, making the 40-mile commute from
Concord, California into San Francisco for your 3 a.m. shift at
the bakery.  But, hey, your time's not wasted!  Everything's
still shut down in the U.S. of A., but you can get on the "cell
phone" to your broker in London and do a few productive stock
market transactions as you cruise along.

Now it's true that most economists don't live in the never-never
land typical of Stanford University, but it does make you more
aware of why they call them dismal scientists.

Tom Condit

Tom Condit
<tomcondit at igc.apc.org>
1801-A Cedar Street
Berkeley, California 94703
510-845-7251


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