Category: Economy

A few days ago I wrote a post that took as its jumping-off point an article on the shortcomings of GDP by Jonathan Rowe in Harper‘s. I see here that Mr. Rowe has an entire archive of articles written from what I would describe as a generally decentralist green/left perspective that I find highly congenial. He even writes on a few occasions about possible alliances with traditionalist conservatives, “crunchy” cons and the like.

I picked up the June issue of Harper’s before a train trip a few weeks ago because of the its interesting-looking cover story on the strife in the Episcopal Church. But only last night, as was I catching up on the rest of the issue, did I come across Jonathan Rowe’s “Our Phony Economy,” which was an abridged version of testimony he gave before the Senate Committee on Commerce, Science, and Transportation, Subcommittee on Interstate Commerce. Rowe is identified as “codirector of West Marin Commons, a community-organizing group, in California.”

The points Rowe makes are not unfamiliar ones, but they don’t seem to have sunk in to our collective consciousness, so they probably bear repeating. In essence, he is criticizing the use of GDP to measure economic well-being, making two major points about its limitations: it doesn’t count activities that exist outside of the formal cash economy, and it counts anything within that economy, whether constructive or destructive, as a contribution to well-being. In the guise of being “value neutral” it actually obscures an accurate picture of our economic life and the values it actually serves.

Like I said, this is a point that has been made before, particularly by ecologically-minded thinkers. It’s reinforced by the fact that the human economy is only one part of what you might call the total earth economy, and any accounting of economic activity that neglects its impact on the ecosystem is partial and misleading.

Rowe says:

The purpose of an economy is to meet human needs in such a way that life becomes in some respect richer and better in the process. It is not simply to produce a lot of stuff. Stuff is a means, not an end. Yet current modes of economic measurement focus almost entirely on means. For example, an automobile is productive if it produces transportation. But today we look only at the cars produced per hour worked. More cars can mean more traffic and therefore a transportation system that is less productive. The medical system is the same. The aim should be healthy people, not the sale of more medical services and drugs. Now, however, we assess the economic contribution of the medical system on the basis of treatments rather than results. Economists see nothing wrong with this. They see no problem that the medical system is expected to produce 30 or 40 percent of new jobs over the next thirty years. “We have to spend our money on something,” shrugged a Stanford economist to the New York Times. This is more insanity. Next we will be hearing about “disease-led recovery.” To stimulate the economy we will have to encourage people to be sick so that the economy can be well.

I read this just a couple of days after receiving my “economic stimulus check” from the Treasury, so this is timely. Purist free-marketeers may accuse Rowe of attacking a straw man here, but I think it’s pretty hard to argue that our policy isn’t to encourage consumption, without much regard for what is consumed.

What the environmental and resource crunch may require, then, is for us to think about the ends served by our economic life. It’s not enough to simply take whatever desires human beings may happen to have (or have had socialized into them) as given and use the economy as a mechanism for satisfying them, because those desires are essentially infinite, and we live in a finite world. Instead, we might need to start distinguishing more between those desires that lead to beneficial ends and those that lead to destructive ones.

Again, nothing particularly new. But the question for me is whether this can be done in a way that respects people’s freedom. Apart from obvious physical harms, distinguishing between beneficial and destructive activities is tricky, especially without a shared philosophical framework of some sort. This is the real strength of liberalism: it promises to deliver social peace without taking a stand on controversial questions about the purpose and higher ends of living. However, if unrestrained human desire begins to bump up against very real ecological limits, this kind of neutrality may no longer be possible. Can liberalism provide an argument for self-restraint?

Or could it be that liberalism doesn’t need to provide this kind of argument? All it needs to do, you might say, is put a price on those “externalities” generated by our economy–environmental, medical, etc.–and let the market do its thing. When it costs to pollute, people will pollute less. QED. This all assumes, of course, that we can put a non-arbitrary price on pollution, not to mention things like species extinction, destruction of wilderness, etc. And, anyway, is the worth of everything else ultimately a function of human preference, or does it have its own intrinsic, objective value? At this point we’re getting into questions that are downright philosophical, if not theological, and my skepticism that we can simply avoid the debate about ends and values returns.

It may be, then, that democracy–understood not just as sheer majority rule but as a process for deliberating about shared goods–is necessary to fence in an economy that threatens to overturn all limits. But can our actually existing democracy even be said to approximate such a process? The jostling of interest groups and the lies of spinmeisters bear little resemblence to the ideal of a high-minded New England town meeting so beloved of proponents of deliberative democracy. Moreover, can democratic reasoning about ends, expressing itself in communal self-determination, coexist with a generous sphere of liberty for personal action? I have both libertarian and communitarian impulses, but I’m not sure there’s a politics that doesn’t require some kind of tradeoff between them. My thoughts on this are very much in flux at this point…

Via Jeremy, a smart post from Patrick Deneen on the way Left vs. Right thinking is driving a lot of people’s reactions to environmental and resource challenges.

I continue to be somewhat amazed at the glib dismissal of global warming and other environmental problems on the part of many conservatives. There is almost no attempt to actually engage the issues except occasionally by cherry-picking experts like Bjorn Lomborg who take a contrarian view (though even Lomborg concedes that human caused climate change is a reality). As Professor Deneen quotes from a Salon.com article by Andrew Leonard, the “very idea that dirty Gaia-worshipping hippies might be right is absolute anathema.”

Deneen concludes:

What may be most productive in coming years is to stop calling this cadre of economic libertarians – what we now call “the Right” or even conservatism – conservatives. There is nothing they want to conserve – nothing in the natural or moral ecology. They are rapacious exploiters who want to use every last natural and cultural reservoir for their own immediate profit – even at the price of leaving nothing for their children. Recall, it was Dick Cheney who said “Conservation may be a sign of personal virtue, but it is not a sufficient basis all by itself for a sound, comprehensive energy policy.” Probably true, but it’s a damned good place to start, and we fool ourselves if we think we are not going to need substantial reservoirs of personal and political virtue in coming years.

Soon, if not soon enough, I predict, there will be a party of conservatives and a party of “live now’ers.” Live now’ers have original sin on their side, and are likely to win a lot of votes until it’s clear that the grasshopper was wrong and the ant was right. Then they will tell us it’s time to get the guns. Are you sure that’s the side you want to be on?