GDP — a measure of the capitalist elite’s greed and the plunder of our planet
I was a senior in high school when I got interested in politics and economics, and I took the first books on these topics from our bookshelves back home at a very still-identity-forming age. Not until then had I read convincing arguments as to why it is a mistake to include only the gross domestic product (GDP) data when comparing different national economies and societies. The introduction of GDP post-1945 as an indicator of the output of an economy was a radical new development once. GDP describes the total value of all products and services produced within a country in the course of a year. However, it was a controversial indicator from the start, amongst others because it only captures transactions that have a market price and does not distinguish between beneficial and detrimental costs to society. To this very day, I can still remember the two illustrative examples in a study I read.
In the first one, our hero is sitting in his room on a hot summer day. If he opens the window, his room cools down and he can be comfortable again — however, there is another option for him: he can turn on the air conditioner, the room cools down and his comfort recovers just as much. There is a big difference between these two choices from an ecological point of view, though: opening the window does not consume coal and gas energy, so it does not harm the environment, neither costs a penny — but our hero reaches for the AC’s remote control, which leads to increased production by the electricity provider company, which results in him being forced to work harder as he has to pay the electricity bills. A switched on AC generates economic growth and tax revenue, which is obviously beneficial for the market and the state. From the GDP’s point of view, climate change is logical and useful, but we must admit this is a short-sighted self-destruction in terms of sustainability.
In another example, after a major oil pollution disaster, a huge effort to reduce damage, protect drinking water and wildlife has resulted in significant economic growth in the area. Anyone who simply looks at the evolution of GDP finds that a catastrophic event has blown up the economy — even though the natural damage is irreparable in reality.
This means that the financial burden to society of the destruction of species-rich habitats is not reflected in the GDP, while expenditure on cleaning up after an oil spill increases the GDP, because the work involved has a market price. The indicator thus says nothing about the quality of life and environmental standards in a country, about distribution issues, social impacts of accidents and the state of the natural environment.
THESE TWO SIMPLE EXAMPLES REFER TO THE FACT THAT GDP, THE PHETICAL DATA OF NEOLIBERAL ECONOMIC AGENTS, IS NOT APPLICABLE TO DESCRIBE REALITY OR TO MAKE DECISIONS BASED UPON.
A closer look at the history of GDP, however, reveals a cautionary tale. It shows that the decision about what is measured is always swayed by political interests. But the influence of political interests is often forgotten or ignored, because indicators expressed in numbers are perceived as objective and ‘hard facts’. This pull towards numbers and perception of such numbers as objective indicators was also apparent in the discussion about the selection and calculation of possible additional indicators, such as those proposed by the German Bundestag’s Enquete Commission ‘Growth, Prosperity and Quality of Life — Paths to Sustainable Economic Activity and Social Progress in the Social Market Economy’ in 2013.
A glance at the origins of GDP reveals striking parallels with the pros and cons of an economic valuation of nature. For example, the historian Daniel Speich Chassé writes: “Within the discipline of economics there were initially major reservations about global comparison of the metrics of national income accounting. While macroeconomic experts had concerns about the possibility of an internationally comparable epistemic concept and economic statisticians described fundamental problems in measuring economic parameters in poor countries, the controversial form of knowledge quickly assumed growing importance in international organisations. Because the figures offered the prospect of a novel means of reducing global diversity to such an extent that action on the level of international policy appeared possible.”
And for someone who believes that even though sustainability considerations are not represented in the GDP metric, they still feel this figure in their payment, and thus, their livelihood. So, it is worth demanding it from politicians if they want to live better and better every day. Here is a expansive figure: while per capita GDP in the U.S. increased by nearly thirty-five percent between 1990 and 2011, median household income slightly declined. And this trend can be observed in almost all capitalist economies following the neoliberal turn of the 80s and 90s. Therefore, GDP is not only unsuitable for representing ecological aspects, but it is also useless for describing the quality of life of the average person, for the fairness of social redistribution of the goods produced is in no way expressed in this data. As for the good or bad functioning of the market, this figure is simply blind — and it is a moral value judgment, yes, because I do not believe that the market works well where speculation is more profitable than production, where wealth produced in economy accumulates in the bank accounts of a few thousand families, and where society pays for the greed of the elite through child poverty and the daily deprivation of public servants such as teachers and health workers.
The position of GDP in the interpretation of economic processes has not changed since my high school years: worldwide, this indicator impacts the economic policy of every nation, it is the basis for intellectual discourse, and this and only this data is what economists have been working with for decades. These numbers are imprinted in the heads of their generations. I wonder why.
Well, because the management and shareholders of multinational companies and politicians are only interested in GDP — as nothing more accurately expresses their success, or failure for that matter, than these numbers.
THE MEMBERS OF THE ELITE LIVE UNDER THE TREND OF GDP WHICH DETERMINES THEIR DAILY FUNCTION: THIS IS THE MOST INVESTIGATIVE MEASURE OF THEIR RICHNESS AND (LACK OF) HUMANITY.
The increase in this number most accurately shows the rate at which the elite is growing and how successfully they are eviscerating the planet’s wildlife and the money-generating biorobots that produce their money.
What better shows humanity’s inertia in the face of the world’s financial elite and the impending climate catastrophe than the fact that since my youth, not only has the GDP measure not been revised, but none of the myriad other data has been included in the discourse as this figure’s alternative. The green movements have not even managed to achieve at least data on the extent of the ecological footprint in addition to GDP.
A very similar development can be seen in international climate policy. With the introduction of CO2 as a unit of measurement, international policy has focused increasingly on quantitative approaches: CO2 serves as a benchmark for emission trading systems or for equating fossil and forest carbon via REDD+ carbon credits, and it provides the logical framework for risky large-scale technologies such as BECCS that promise negative emissions. In so doing, policy fails to concentrate its efforts on qualitative changes in industry and society — changes that take account of local conditions and aim to adapt global trade and industry so that they remain within planetary boundaries. Instead, climate policy’s focus on the CO2 metric results in nature being redefined so that it fits into our economic system.
These experiences make it questionable whether the state of ecosystems and their functions can be described solely in terms of natural capital and whether it is really possible to formulate a better policy on this basis — a policy that subordinates economic growth to the conservation of natural habitats. Neoliberal economists dominate the entire economic and financial discourse —so, only a growth-based approach could be used in their training. Capital, the right-wing and liberal media that serve its interests, and neoliberal economic policy, which is solely interested in maximizing the profits of multinational corporations, have once and for all engaged themselves in measuring GDP, so that displaces from the surfaces of mass communication. And this is only good for the world economy to lead consumer societies into a gap. A gap whose mere existence they do not become aware of until the moment of the fall.
