Friday 19 April 2019

Brendan Keenan: The definition of progress is sometimes a matter of opinion

This is a good time to consider what is growth and how mere arithmetic has been turned into an ideal in itself

Brendan Keenan

Brendan Keenan

IT IS a fact that, if we could calculate its value, drug dealing would be added to GDP -- the figure which measures the total output of the economy.

Curious, but still a fact. Gross domestic product has no morals; it is mere arithmetic.

But has GDP become more than arithmetic, and turned into an ideal in itself? That is one thesis behind a new publication from Social Justice Ireland, the ginger group run by the indefatigable Fr Sean Healy and Sr Brigid Reynolds.

It has to be said their timing is pretty good. It is the end of the first full year of recession and the start of a new one when, while the recession may technically end, not much good news is expected. A good moment, surely, to consider, as Social Justice suggests, what really constitutes progress and how should it be measured?

A large part of the problem is that the definition of progress is a matter of opinion. There are indeed those who argue that economic growth is the only thing which matters, but they are a minority in Ireland, as in most European countries. The majority, though, have differing views on what does matter.

The debate has been poisoned by the nature of the economic growth during the bubble years -- as if that were the only kind we had had. It was David Begg, now president of Congress, who pointed out at the time that, while GDP was rising fast, GDP per person was not. Like a real bubble, the economy was stretching, but not growing.

There are good reasons why governments like rising GDP of any kind -- mainly that tax revenues grow as well. Of course, policy should focus on genuine growth based on increased productivity. The question in this series of essays is how we should regard even that kind of growth.

It is a good deal more contentious to say, as the SJI press release does in bold type, that Ireland's problems could have been averted if policies were focused "on the common good, on building a better future for the people of the country, rather than focusing, principally, on generating economic growth".

I am very glad to see -- though not surprised -- that Fr Healy and Sr Reynolds understand the delicate, dying, art of putting commas in the right places. Sticking them between "principally" makes the choice less black and white, but still begs a lot of questions.

It is an old dream: made famous by Eamon de Valera's musings on an ideal society that would value material goods as a basis for right living. He has been laughed at for saying this ever since, but then, at the time, there were not enough material goods in Ireland for any kind of living for everyone. Now that there are -- and let's hope there will continue to be -- it is a thought which deserves to be taken seriously.

A major complication has arisen since Mr de Valera's time -- carbon emissions and the threat of global warming. This suggests that there may be a physical limit to economic growth as we have known it. But that is an entirely different problem.

It seems unfortunate that the two ideas have got so mixed up together -- largely because they tend to be of great concern to the same kind of people. This series of essays, like so much else, blithely equates low carbon emissions and depredations of the environment with the good society.

This doubtful proposition finds its apogee in a thing called the 'Happy Planet Index' from the New Economics Foundation in London. Whereas Hong Kong and the USA top conventional indices of economic efficiency, the Happy Planet measure is headed by Costa Rica, and Latin American countries in general score well.

Costa Rica is a pretty well-run place, but its average annual income is $10,000 per person. That is not poverty, but few would be content with any society that could conceivably be constructed on €200 per week per person.

Even utterly pessimistic estimates of the true size of the Irish economy would put income per head at $25,000 per person, and it probably is a good deal higher. The "pursuit of growth" has given us the power to make all kinds of choices about the kind of society we want.

Regular readers will know that I am a stern critic of the state of Irish society. For this, I am often assailed in emails for something called "Thatcherite" ideas.

It's the way I tell them.

I suspect that my notions of the good society are not that different from those of Fr Healy and Sr Reynolds. It is just that I put more of the blame for the failure to achieve them on the company they have been keeping in the salons of social partnership, than on the providers of material goods.

'Beyond GDP: What is Progress and How Should it be Measured?' published by Social Justice Ireland, €12.50

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