3.10 Sustainable Domestic Product (SDP)

One way to get to a measure of Sustainable Domestic Product (SDP) might be through appropriate amendments to the measure of Gross Domestic Product. Here are some suggested amendments:

SDP =

GDP +

+ Voluntary work, understood as the monetary equivalent of unpaid contributions of goods and services, estimated as total national voluntarily contributed time measured in hours x the average hourly wage (= total national income/estimated national total of hours worked for income)

+ Transfer of goods and services to other countries as humanitarian assistance (for those goods and services not otherwise included in Gross Domestic Product)

- Expenditures on non-renewable sources of energy and non-renewable materials multiplied by a factor that adequately reflects the damage to future generations from the absence of these resources and serves as a deterrent

- Expenditures on energy and resources that application of available conservation technologies could prevent

- Expenditures on luxuries (defined as those goods and services which in kind or amount are deemed to be non-sustainable over the long run)

- Environmental Damage, including

  1. unrepaired weather caused damages,
  2. the costs of repair of weather damages,
  3. health care costs ascribed to environmental pollution and unhealthy or unsafe workplaces,
  4. the cost of repair or replacement of structures, machines and land damaged by economic activity, and as a deterrent
  5. compensatory costs for the admittedly irreplaceable loss of non-renewable resources, including biological diversity and physical resources,
  6. the estimated long term costs attributable to the additional greenhouse gases emitted during the measured time period

- Expenditures on the military and other police agencies (as a measure of the failure to apply alternative non-destructive means to avert the need for a police and military and as encouragement to do so henceforth, including humanitarian assistance, which adds to SDP, and neighborly cooperation, which has no net cost)

- Expenditures resulting from domestic harm attributed to security action of domestic security forces including expenditures on repairing or replacing domestic property damaged by one's own security forces, compensation to their families and rehabilitation of those whose lives, limbs or health have been lost or harmed

- Expenditures necessary to compensate the losses of the victims of crime, including associated material repair, health care, counselling and judicial system costs, recognizing, of course, that there is no compensation for loss of life and permanent injury (losses that would only show up in subjective measures of the quality of life, again confirming how vital these are for a more complete picture of a society)

- Transfers to other countries for the damage caused there by one's own security forces including compensation for the physical damage caused to land and property and for the loss of life and limb (as a measure of the failure to avert any need or justification for such intervention in other countries and as encouragement to humanitarian assistance and neighbourly cooperation to prevent such interventions in the future)

- Law enforcement costs including the costs of incarceration less the expenditure on the education and rehabilitation of the incarcerated and the value of goods and services they produce for others.

This, of course, is likely a partial list, and probably has some overlapping elements, which green social democratic governments, when they are achieved, can amend and add to if they wish.

Alternative measures of the success of an economy serve here to illustrate that rule by megalithic publicly-traded private for-profit corporations and their representatives and the measures used to perpetuate that rule are not laws of nature. They can be changed.

We share the last word on this topic with Tim Jackson, who served as Economics Commissioner on the UK governments' Sustainable Development Commission.

"Society is faced with a profound dilemma. To resist growth is to risk economic and social collapse. To pursue it relentlessly is to endanger the ecosystems on which we depend for long-term survival."

Tim Jackson (2009, Earthscan) Prosperity Without Growth: Economics for a finite planet, p.187.

Part of the solution to this dilemma might be to "decouple growth from its material impacts" if that were possible. Another is recognition that beyond a certain point, human health and well-being do not correlate with GDP growth. Reducing greenhouse gas emissions and taking the other necessary steps to save our ecosystems so that they can provide a suitable environment for human life well into the future may not equate to high rates of GDP growth. Nor does leisure time and time spent enjoying the company of family and friends. These instances, however, only underscore the perversity of using GDP and productivity growth (especially from mind and body numbing work intensity) as the aims of socio-economic policy. Instead, human health and well-being and the preservation of ecosystems that will sustain humankind well into the future are the outcomes that should be our principal measures of economic success.

Tim Jackson (p122-136) argues that "broadly speaking, the GDP is a measure of the ‘busy-ness' of the economy. All it does really is count up - in three different ways - the economic activities going on within a particular geographic boundary, usually a nation.

"The first of these three accounts is … the sum of all the ‘final' expenditures (E) on goods and services in the economy … including consumer expenditure (C), government expenditure (G), gross investment in fixed capital (I) and net exports (X)."

A second way of counting up this busy-ness is to sum up all wages and dividends (including profits and rent). A third way is to sum up the total value added by productive enterprises. The first way of counting up is often described as aggregate demand. The second and third way of counting up is often referred to as aggregate supply (Y). The economy is said to be in equilibrium when aggregate demand equals aggregate supply, that is, when expenditure equals income.

E = C + G + I + X = Y

Note, however, that all three methods of counting GDP include only what happens within markets, that is, when exchanges are made for money. No distinction is made between positive and negative activity. Nor are goods produced or services rendered outside of markets included. Depreciation of capital stock and levels of indebtedness are unaccounted for. The effect of this busy-ness on natural stocks and natural services is completely ignored by this accounting system.

Also, the product of average labor productivity (P) x the amount of labor (L) also gives the size of the economy (GDP):

Y = P x L

Advancing P in relation to things we would like to spend less time doing should open up a myriad of opportunities for people and nature, rather than profits for capitalists!

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.