[Marxism] [pen-l] Is It Time to Abandon GDP?

Ralph Johansen mdriscollrj at charter.net
Sun Nov 6 12:21:48 MST 2016

More appropriately, isn't it time to abandon the nation-state as the 
primary unit of analysis? Transnational corporations [TNCs], as they 
have accrued concentration, centralization, flexibility, wealth and 
power have more and more used the nation-state as an instrument of 
aggrandizement and have escaped reporting obligations and other 
responsibilities to the constituents of national bodies. TNCs look to 
the nation-state to stabilize the playing field for increased 
accumulation and global reach - for purposes of disciplining labor, 
providing infrastructure at no cost to the TNCs, subduing competition, 
colluding in treaties which further eviscerate nation-states' capacity 
to regulate and restrain TNCs to the benefit of their inhabitants, 
including health, welfare, safety and environmental considerations.

TNCs minimize or eliminate completely tax obligations to their countries 
of formal residence through lavish concessions for favoring states with 
their presence, transfer pricing, parking profits in island tax havens, 
other forms of deceitful accounting in the course of mergers and 
acquisitions, double book-keeping, and all the benefits to them of 
offshoring. TNCs manipulate the value-chain to the detriment of everyone 
else. All exacerbated by their drastic restraints on labor mobility. And 
needless to say, TNCs generate an ever-increasing share of global revenue.

Aside from international organizations like the IMF, World Bank, ILO and 
UN institutions, where might there be any effective alternative source 
of data on the actual existence and extent of revenues accrued by TNCs, 
as well as the onerous drain on externalities? And these international 
organizations exist largely at the pleasure of TNCs with no 
accountability to the rest of us, have no enforceable reporting 
requirements, deriving much if not all of of their data from 
nation-states and figure-fudging financial institutions. Measuring 
national income at best only provides an index after profit-taking and 
claims on resources and environment, of what's left to the states for 
tax revenue and for the 99%. Then there's the planet of slums, where 
increasing numbers of us globally are not included in what statistics 
may exist.

In short, we have no idea how bad things really are. Moreover. we don't 
need another capital-apologist like Simon Kuznets to obfuscate for us, 
suffocate us in yet another capital-serving legislative blizzard and 
kick the can down the road.

Louis Proyect wrote

Is It Time to Abandon GDP?

by Edoardo Campanella

Like many great inventions, gross domestic product has been used in ways 
that its creators never intended and might not approve. Given that it 
misses so much that contributes to human wellbeing – and excludes even 
more – why do we continue to rely on it as our primary welfare indicator?

NOV 4, 2016 20

MILAN – In a year of populist discontent across the West and narrowing 
prospects for major emerging economies, the future may end up being 
shaped in an unlikely setting: the world’s statistical offices. Among 
ordinary people and specialists alike, there seems to be an increasingly 
powerful sense of dissatisfaction not only with the pace of economic 
growth, but with how that growth is defined and measured. There are two 
reasons for this. First, aggregate economic growth in the developed 
world has brought little, if any, benefit to the vast majority of 
citizens in recent decades – a trend that has been particularly 
pronounced against the backdrop of the 2008 global financial crisis. As 
Nobel laureate Joseph Stiglitz reminds us, “in the ‘recovery” of 
2009-2010, the top 1% of US income earners captured 93% of the income 

But second, and arguably more important, defining welfare solely in 
terms of what can be measured by markets misses much of what contributes 
to – or detracts from – human wellbeing. In 1968, Robert Kennedy, 
campaigning for the presidency of the United States, lamented that this 
approach “measures everything except that which makes life worthwhile.” 
It says nothing, for example, about environmental quality, the cohesion 
of communities, or the stability of individual and group identities – 
all of which clearly influence wellbeing. Such shortcomings not only 
stoke suspicion of “experts” who tell us that we should be happier than 
we are; they also prevent the experts themselves from accounting for 
welfare effects implied by economic dynamism and innovation. As Barry 
Eichengreen of the University of California at Berkeley points out, the 
United States’ recent slowdown in productivity growth has been 
attributed to “the stagnation of technology.” But this seems 
“implausible,” he says, given the “radical technological advances in 
robotics, artificial intelligence, biotechnology, and materials design 
going on all around us.”

Not surprisingly, such considerations have invited increased conceptual 
scrutiny of gross domestic product, which in less than a century has 
emerged as the worldwide king of welfare indicators. Indeed, GDP serves 
as far more than a gauge of economic growth, material progress, and 
human wellbeing. It determines countries’ status and access to exclusive 
clubs, from the OECD to the G8 and the G20, thereby affecting the 
balance of global power. It steers international capital flows, signals 
swings in standards of living across countries, and decides the fate of 
political leaders. Of course, no welfare indicator can capture all the 
dimensions of life, and much of what people value may never be amenable 
to quantification. Nonetheless, many Project Syndicate commentators make 
a compelling case that GDP is ripe for refinement, if not replacement.


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