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

Joseph Green jgreen at communistvoice.org
Wed Nov 9 11:05:49 MST 2016

Thanks, Patrick, for a significant description of the movement.

Patrick Bond wrote:

>      Here in South Africa, a very talented colleague from University of 
> Pretoria - Lorenzo Fioramonti (cc line) - makes a convincing case in two 
> recent works from Zed Books that GDP needs to be scrapped.
>      I'm very sympathetic, but I do think that tactically, our comrades 
> fighting 'extractivism' might try to adjust GDP in the short term, by 
> adding an economic argument (to their ecological, political, social, 
> spiritual arguments) against mining and oil/gas drilling. The tactical 
> point would be to calculate the net losses from non-renewable resource 
> depletion, to show net losses from extraction ... but this is highly 
> controversial as it might (unless we work hard at the arguments) 
> degenerate into 'neoliberalising nature' by making markets out of 
> environmental valuation...

Your work and those of others showing the losses involved is an important 
correction to the orthodox economic discussion. And comparing the losses to 
the GDP may give some idea of the magnitude of the problem.

But I don't see why this requires creating an overall corrected GDP; such a 
figure becomes subject to the problems of the original GDP. And there is the 
danger that the correction itself becomes arbitrary. For example, what should 
the loss figure for mining and depleted resources be: the amount the depleted 
resources are sold for? The amount needed to restore the land from which the 
resources were ripped?  Is a figure used for the lives of workers who die?

The result is many figures for the corrected GDP. Furthermore, the  GDP 
doesn't include many things of economic importance, but for that matter it 
ignores things that should be added as well as things that should be 
subtracted. For example, education appears only as the expense of the 
educational system. The misery of lack of educational cuts doesn't appear, 
nor the tremendous positive value of the education either.

Indeed,  the abilities and consciousness that develop among the masses is an 
important economic factor, but it can hardly be quantified in a way that is a 
correction for the GDP. But if we ignore these things, the only conclusion 
can be that the world is doomed, because the corrected GDP is always 
declining sharply.

I fear that if the idea of a corrected GDP is taken too seriously, it will do 
more harm to the activists and environmentalists then to the polluters. The 
probem is that it will distract from a scientific way of considering the 
problem and it will obscure the difference between the militant environmental 
movement and various neo-liberal agencies that talk green. It will distract 
from the need to consider the needed  planning and reconstruction, which must 
take place in a way that is different from the past and which the working 
class must link with the class struggle against the capitalist interests.
> http://www.triplecrisis.com/can-natural-capital-accounting-come-of-age-in-africa-part-1/

This article points out that

>"The head-in-sand, ostrich-mimicking economists and financial
>journalists who use GDP without correction probably aren´t even
> aware that the figure does not include resource depletion,
> unpaid women´s and community work, pollution, loss of farmland and
> wetlands, family breakdown and crime. There are many substitutes
> for GDP, and one-the Genuine Progress Indicator-shows 
>a substantially lower level of world welfare, around $36 trillion using GDP
>compared to less than $10 trillion using GPI in 2005, once 
>these corrections are made."

This points to many key issues ignored by the GDP, and it's important to do 
this. But the very existence of many substitutes for the GDP suggests that 
the figures are arbitrary. And the financial figure doesn't really give an 
idea of what resources are available to deal with the problems facing us, or 
how likely present resources are to be cut down by climate change.

> http://www.triplecrisis.com/can-natural-capital-accounting-come-of-age-in-africa-part-2/

This article discusses concretely some of the ways the issue has come up. It 
talks about "natural capital accounting" and cites the Gaborone Declaration 
for Sustainability in Africa, which is a program in which 10 African 
countries take part. But the governments involved in the Gaborone Declaration 
and the militant environmental movement have very different interests, and it 
would be helpful if the movement had theoretical tools that go beyond 
"natural capital accounting".

 After describing various corrections that should be made to the GDP, the 
article says:

>Why do these depressing counting exercises? One reason is to make
>the case for "ecological debt" in courts of law. For example, of Nigeria´s
>recent $11.5 billion claim against Shell for a 2011 oil spill, more than
>half is meant to compensate fisherfolk. The liability owed to
>silicosis-afflicted mineworker victims of Anglo American and other
>gold mining houses may reach $900 million. ... "

The fight against the marauding corporations is important, although I would 
think that the movement would have to apply constant pressure to ensure that 
any settlement is actually used by the governments for proper purposes. (A 
key interest of the movement in these claims, as you describe it, is to stop 
the harmful activities, while the local bourgeoisie wants the money.) But 
this doesn't require aggregating everything into a corrected GDP. 

A passage in the the article points out some problems that come up:

>To be sure, there is a danger that natural capital accounting will become,
>instead, a "fee" for pollution; the damage continues, but with an ongoing
>payment. The strategy known as "Payment for Ecosystem Services,"
>promoted by the more neoliberal of "green economy" advocates,
>represents this sort of parallel danger: commodifying the environment.
>An example of an unworkable "neoliberalised nature" strategy to address
>climate change is carbon trading, yet South African Treasury bureaucrats
>last month endorsed a policy move in that direction-which climate justice 
>activists are opposing.

>The distinction between counting for damage control (a fine and ban) and
>counting for market-making (a fee) should be made. As Vandava Shiva put it,
>"We should use natural capital as a red light to destruction, not as a green

This passage shows the difference between what the movement want, and what 
the governments want. This is very important. It also identifies carbon 
trading (one of the World Bank and IMF's favorite things, along with the 
carbon tax) with "commodifying the environment".

One problem, however, is that the system of "natural capital accounting" as 
described in the Gaborone Declaration is itself the theoretical base for 
commodifying nature. "Natural capital accounting" is being developed in 
partnership with the World Bank and its WAVES program of "Wealth Accounting 
and the Valuation of Ecosystem Services". 
(https://www.wavespartnership.org/en/about-us) The World Bank dresses this up 
in flowery rhetoric, which the Gaborone Declaration also does. But the 
militant environment movement is involved instead in struggle against 
"extractivism" and definite corporate environmental threats. 

The theoretical conceptions behind "natural capital accounting" will 
eventually have their effect on people's orientation. When one is dealing 
with banning various activities, some of these questions can be brushed 
aside.  However, while certain things should be altogether banned, the 
defense of the environment doesn't consist only of banning things. It will 
also require overall economic and environmental planning. Just about all 
economic activities impinge on the environment. They need to be regulated and 
controlled and planned to defend the environment, and this must be done in a 
new way. We need control and planning for the sake of all people, not just 
the privileged handful; moreover unless the masses are intimately involved in 
enforcing this planning, it won't be implemented very well.  And the 
recognition  of this helps create vigilance towards the governments and 
recognition of what's wrong with the  World Bank's view of environmentalism 
and what needs to be done.

At present, most of the movement is either divided on the question of how to 
deal with the control of the economy, or avoids it (perhaps through 
advocating a carbon tax, such as is done in Washington state). And there is 
limited recognition of the nature of the different environmental trends.  A 
militant movement has been built, uniting people of different views by 
concentrating on those activities that should be banned. This movement is one 
of the inspiring parts of the environmental struggle. But sooner or later, it 
also has to look more deeply into what is needed to fight neoliberalism, and 
to transform the economy (both industrial and agricultural) in way that 
protects the environment while satisfying the needs of the people. I think 
that not only debunking the GDP, but showing the limited nature of any 
corrected figure, might help people think more concretely about the need to 
get beyond neoliberalism and the commodification of nature.

Keep up the fight!

Joseph Green

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