3.9 Encouraging the accomplishment of intended policy outcomes by measuring them

If it is true that we get what we measure, then income, wealth and Gross Domestic Product should be replaced with more appropriate measures of achievement. If the intended outcomes of economic activity are useful goods and services, health, happiness, security and well-being, then income, wealth and GDP are misleading indicators. Each utilizes the monetary values derived from market exchanges, ignoring goods and services produced and exchanged outside of market relationships, and misrepresenting the contributions of market exchanges to human health, happiness, security and well-being.

The reader is encouraged to refer to www.wikipedia.org for current, brief introductions to the common measures used for comparing income and wealth distribution and national income, in particular the articles on gross domestic product, gross national wealth, standard of living and gini coefficient. See also: Joseph E. Stiglitz, Amartya Sen and Jean-Paul Fitoussi (2010, The New Press) Mis-Measuring Our Lives: Why GDP Doesn't Add Up. This report by the Commission on the Measurement of Economic Performance and Social Progress was requested by then President of France, Nicolas Sarkozy, and represents a significant initiative in the direction needed for measuring the achievement of what we have identified as green social democratic goals. 

Achieving greater wealth and income equality

The following traditional measures would continue to be useful in relation to green social democratic policy, but not as measures by themselves of desirable national achievement: Gross Domestic Product (= GDP, a measure of national income) and average income per person (= GDP/population), Gross National Wealth (=GNW, a measure of monetary assets less liabilities) and per capita wealth (= GNW/population). Even then, great caution needs to be used in interpreting the resulting numbers. For example, comparisons based on US dollar values depend on the exchange rate, which is highly variable. 

Instead, measures like the following are needed to report and assess progress in achieving green social democratic goals:

Mean income and mean wealth per citizen and the standard deviations from these means could be tracked to indicate progress towards greater income and wealth equality. For example, the lower the standard deviation, the greater the percentage of the population near the mean. The Gini coefficient, a standard method used internationally to measure and compare income and wealth inequality could also be used. (For an online description and discussion of the Gini coefficient, how it is determined and a world map of its application to income inequality, go to https://en.wikipedia.org/wiki/Gini_coefficient).

Achieving a higher quality of life

Likewise, the common use of measures like the following would be helpful to the achievement of a higher quality of life:

A subjective measure of the quality of life obtained from self-reports of feelings about those matters known to contribute most to a sense of well-being and enjoyment of life, such as income security, physical and mental health, participation in educational and cultural activity, diversity and variety of interesting and challenging experiences, connection with nature, relations with other people, contributions to others, attainments in relation to others, and security from physical harm, not necessarily in that order of importance; 

An objective measure of the quality of life which might be based on data such as mental and physical health, infant mortality and lifespan to determine the length of time that individuals enjoy a high quality of life. Educational opportunities, enrolments and attainments and other objective data thought to indicate quality of life could also be used as separate measures or incorporated into a single objective measure.

The intention here is not to review the measures that are currently being developed and applied by those who share our concern for the need for such measures; for that, readers might refer to the Stiglitz report (Joseph E. Stiglitz, Amartya Sen and Jean-Paul Fitoussi (2010,The New Press) Mis-Measuring Our Lives: Why GDP Doesn't Add Up.). The intention here is simply to register the need and to distinguish the two types of data that are likely to be used, subjective self-reports, and objective data, alone or in some combination.

Achieving sustainable development

Gross Domestic Product (GDP) is a misleading indicator of the economic activity of a country. Remarkably, it does not include the voluntary provision of services and goods that constitutes a large part of the economic life of society and would desirably constitute an even larger part. For example, GDP excludes 

 

  • voluntary contributions to the care and education of children by parents, grandparents, friends, neighbors, volunteer coaches and out of school activity leaders;
  • other voluntary contributions of goods and services that family and friends make to each other, including counselling, care giving, meal preparation, gardening, house cleaning and repair, environmental maintenance and similar contributions;
  • voluntary contributions to community service, including those made through service organizations and churches;
  • voluntary contributions to cultural life, including entertainment, sports, the arts, and education. 

 

If we want to increase leisure time and encourage more people to use some of their leisure time helping others then we should include all of these contributions in the measure of society's economic activity. The higher the productivity of labor becomes through the development and application of science and technology, the more opportunity there should be for leisure and for voluntary contributions to improve the quality of life. This should be a boon to education, cultural life, health care and other facets of our existence. Instead, our societies are presently under stress from the drive to privatize and profit from every human activity. A green social democracy is one in which the voluntary contributions to the welfare of others would become an increasing part of economic life.

Equally remarkable, GDP includes as positive economic activity the expenditures we make first on destruction and then on repairing, replacing or compensating for what we have destroyed. GDP also increases the more we waste natural resources. War, environmental destruction and waste - these become means to a higher GDP! In other words, GDP measures busy-ness whether it is constructive, destructive or neutral. 

Clearly, a new measure is needed that encourages a wiser use of resources and a more felicitous outcome for human beings. That measure should increase with reduced use of finite resources and increased voluntary services. 

For the consideration of those who prefer brief arguments supported by mathematical symbolism, we present the following two sections as addenda to this chapter. First, we present (section 3.10) the outline of a measure of what we call Sustainable Domestic Product (SDP). Finally (section 3.11) we present in brief outline, supported by mathematical symbolism, a couple of the more important results of Karl Marx's study of the nature of capitalism. 

Welcome!

This website was launched September 1, 2010 in support of a green social democratic alternative to neoliberal capitalist policy and practice. The primary result is a work by Charles and Karen McFadden of seven chapters, grouped under the title, Towards a Green Social Democratic Alternative to Capitalism available here in pdf and html formats.

Below under the heading What’s New can be found the most recent materials posted on this website, including opinion pieces, book reviews, articles and selections from the 2017 edition of the main work.  For the interest of new and returning visitors, new materials will be included quarterly.

What's New

NEW & REVISED

Authors' Preface

1.6 The epochal nature of the period we are entering

6.0 The socialism we need against the "socialism" of the 20th century

6.8 Additional concerns about 20th century variants of "socialism"

6.9 The people united!

7.1 Policy alternatives and political movements to advance them

OPINION

Charles and Karen McFadden, Is revolutionary transformation on the agenda

Charles and Karen McFaddenHumanity on the Brink

Charles and Karen McFaddenMovements of Resistance to Movements for System Change

Charles McFaddenTranslating Green Principles into Education Policy and Practice

Charles and Karen McFadden, The Role of Revolutionaries in the Labor Movement

REVIEWS

Charles McFadden, The People United for a More Just Sustainable Future

Karen and Charles McFaddenCan emergent early 21st century neo-fascism be defeated without coming to grips with late 20th century restructuring of capitalism into a global system

Karen and Charles McFaddenA Dominant Capitalism or a Sustainable Environment? Why we can't have both.

US CORNER

William I. RobinsonThe Crisis of Global Capitalism and Trump's March to War

William I. RobinsonTrumpism, 21st Century Fascism, and the Dictatorship of the Transnational Capitalist Class

CANADA CORNER

George HewisonWINNIPEG 1919 & THE COLD WAR

George HewisonArt Manuel - "Unsettling Canada

George HewisonThe NDP and LEAP

RECOMMENDED

Albert Einstein, David Swanson, Jill Stein, Chris Hedges, William I. Robinson, and others Selected articles for Winter 2018

FEATURED WORK

ECONOMICS

1.7 The dynamics of capitalism as a system and the limits of single issue reforms

2.11 The economy in transition towards a new deal for labor and the community

3.1 The challenge of a moribund economic system

3.7 Public banking: A cornerstone of a green social democracy

4.7 Economics and culture

6.5 Using the non-market economy as an opportunity to begin moving beyond capitalism

HISTORY

1.6 The epochal nature of the period we are entering

2.0 Theoretical Perspective: Defining Green Social Democracy

2.5. Socialism and green social democracy in historical materialist theory

4.3 Culture in historical perspective

5.1 Contrasting a green social democratic world with the currently prevailing, but challenged neo-liberal one

6.2 Socialism and capitalism as coexisting social systems

LABOR

2.11 The economy in transition towards a new deal for labor and the community

5.7 Defeating neo-liberal capitalism: The role of social movements

7.3 Justice: Creating a just society, based on the right of all to a dignified, secure existence

Creative Commons License

Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) applies to all work posted on this website except that which appears with authors whose last name is other than McFadden, in which case standard copyright should be assumed to apply.