Showing posts with label GDP. Show all posts
Showing posts with label GDP. Show all posts

Saturday, November 21, 2020

Resetting the clock to rethink life

De-growth can help people engage life journeys with patience and compassion, rather than investing in material acquisitions to escape the daily quota of pain, sadness and frustration.

Epidemics have happened in the past but the speed and scope of the present contagion has left the world reeling under its brutal impact. The interconnectivity of accelerated global economies with encroached habitats, exhaustive agriculture and commoditized wildlife has helped the virus to move without any inhibition to expose the weak fundamentals of the existing economic systems. The billion dollar question that begs serious attention is whether the existing systems would be capable of scaling back production at levels and in ways that do not cause further loss of livelihood and life? And, will the growth of society slowed down by an unprecedented disaster emerge more resilient later, with the goal of mitigating the economic and ecological crises which has led it to the present situation?

Pursuit of growth cannot address the growth pangs, much like addressing a problem by applying the solution that caused the problem leads nowhere. The core problem with the capitalist model of growth is that it leads to mounting debt, increasing inequality, rising unemployment, and shrinking finances, and sacrifices made in its pursuit lead to externalizing costs that are forced on both poor people and mute nature. What it does though is to keep billions under the illusion that trickle-down effect will get them leftovers of accumulated wealth year-on-year, but the broad architecture of the economic construct remains exclusionist at the core.

Confronting the idiom of economism head-on may seem preposterous, but slowing down under the current pandemic with ideas on frugality having caught on seems an apt time to press home the case for degrowth. After defining the term in their first book, Degrowth - A Vocabulary for A New Era, the authors take the idea forward in their second outing half a decade later by suggesting a way of living with less, however, with the aim of living differently by promoting well being, equity and sustainability. Degrowth, according to the quartet, should help people engage life journeys with patience, compassion and care for self and others, rather than investing time and resources for material acquisitions to escape the daily quota of pain, sadness and frustration. After all, how long should the cycle of sufferings remain self-perpetuating? 

While the political system is obsessed with a growth-driven model based on private property, paid labor, and a consumptive market, The Case for Degrowth provides numerous cross-country examples of eco-communes, transition towns, and co-living communities that need support, strengthening, and scaling up. Spread over five sections, with an add-on section elucidating the frequently asked questions, this pithy book offers well-argued critique of the growth systems while presenting policy packages for promoting degrowth that will help people produce only as much, consume less, share more, enjoy time, and live with dignity and joy. There are clear directions being proposed in the book to make degrowth a reality, however, it by no means should be read as a euphemism for ‘green deal’ as it is a low resource use transformative process that ensures universal basic services for all, with an assured universal basic income. 

Offering deep analysis, the book argues for a transformative politics that is not back-to-the-roots journey but one that provides multiple options and strategies about recreating frameworks for engaging communities in playing an active role in designing their own life support systems. Ever since it was launched at a global conference in Paris in 2008, degrowth has caught on as an idea for researchers and movements to pursue as an alternative to growth-obsessed politics. With GDP driven global economy taking a serious beating during the pandemic, the book could not have come at a more appropriate time. 

The Case for Degrowth is a bold new statement on re-ordering values and resources to support the development of diverse life-making processes operating in different logics under differing conditions. The writers are convinced that by adopting diversity of approaches can resilience be achieved in the face of the existential crises. Written with empathy and concern, the book is an open invitation to its readers to play a proactive role in pushing the idea at levels that can generate political support for a non-GDP growth. 

The paradigm shift in proposed policies and actions in the book take into account historical, cultural and social contexts which may have its share of pitfalls, but the pandemic has indeed shown that modest living, enjoyed in solidarity, amidst shared living is indeed a possibility.

The Case for Degrowth
by Giorgos Kallis, Susan Paulson, Giacomo D’Alisa, Federico Demaria 
Polity, Cambridge (UK)
Extent: 151, Price: US$12.95.

First published in The Hindu, issue dated Nov 22, 2020.

Friday, November 13, 2015

Beyond the statistical fog

GDP may have worked despite its fallibility till now, but it is unlikely to serve henceforth as the economy gets driven more by innovation, services, and intangible goods.

It is a ‘made up entity’ that has become the rallying point for governments to reflect their economic prowess. Usually expressed in single digit, it needs sustained nurturing, lest governments can be toppled and fresh elections enforced. Since it was formally coined in the 1940s, GDP has continued to engage best of economic brains to develop a standard measure of a country’s economy. Yet, this familiar piece of jargon means little to most people because the health of the country’s economy often has little bearing on peoples’ lives. 

No wonder, it can decide elections but can't make people happy and it can make news but can't erase income inequality. GDP is a powerful teaser that has thus far remained artificial, abstract and complex. Providing a much-needed historical perspective on this elusive bit of static, Harvard Economist Diane Coyle argues that GDP has remained a piece of ‘static’ in the hands of the ‘state’, and must not be confused with social welfare. At best, it creates a self deceptive image of contributing to overall welfare. In reality, much of the welfare activities, for lack of mathematical expression, do not get counted in it. Ms. Coyle has been grateful to Cabbage, her dog, who may not have contributed to GDP but greatly to her welfare! 

Since the making of physical commodities count toward national income, green forests holds zero value whereas chopped trees add to the GDP. Environmentalists therefore believe that GDP leads to an overemphasis on growth at the expense of the planet, obscuring the wrongs of the capitalist market economy. Such assertion is not without reason, as spending on pollution-abatement equipment adds to GDP but the negative effect of pollution doesn’t pull GDP down. GDP may have worked despite its fallibility till now, but it is unlikely to serve its purpose henceforth as the economy gets driven more by innovation, services, and intangible goods.

While the author remains ‘affectionate’ towards GDP, as the title suggests, she nonetheless argues that it is flawed and search for its alternative has been ongoing. However, alternatives ranging from the Measure of Economic Welfare (MEW) to the Better Life Index (BLI) haven’t evoked enough confidence in replacing the ubiquitous piece of static. Welfare has been the leitmotif of the proposed change, but counting intangibles has remained a challenge. Even more challenging is to count value of zero-priced goods like online music, search engines, crowd sourcing, and so on. These do contribute to productivity, and even loss of jobs, in many ways without being captured in GDP statistics.  

Wading through the murky world of number crunching, Coyle presents a fascinating biography of GDP which, despite its inherent fallacies, continues to remain the greatest innovation of the 20th century. Yet, as the Greek tragedy unfolds, the so-called irrational exuberance has led to self-delusions and inadequacies of regulatory bodies, leading to financial crises. Since market-led global capitalism is sweeping the whole world, GDP need to be sanitized from overt influence of market manipulation. The financial crisis has pressed the urgency button to rethink economic valuation of products’ quality, zero-priced goods and services’ efficiency. 

As the economy is driven more by innovation and services, accounting activities operating outside the tax net and production matrix has become imperative. With boundary between growth and progress, and between leisure and work going through significant transformation, GDP will lose relevance if it doesn’t translate into increased happiness. For GDP to remain relevant it must resolve the well-known paradox of a widower who marries his house maid. His marriage leads to reducing GDP as he longer pays her the wages, but should the happiness both gain be left unaccounted for? In this engaging and witty book, Coyle leaves the reader with the challenging optimism of life beyond the prevailing statistical fog. 

GDP: A Brief but Affectionate History
by Diane Coyle
Princeton University Press, UK
Extent: 160, Price: US$19.95  

This review was published in The Hindustan Times dated Nov 21, 2015.           

Thursday, March 12, 2015

Prescribed living invites doctors’ prescription

Mass production, mass consumption and resultant mass monotony has resulted in mass depression.

Realizing that the French people would judge him for how happy and satisfied they felt with life during his presidency, Nicholas Sarkozy had hired some of the best brains to construct a measure of progress that went beyond GDP, and instead took into account the wellbeing of its people. It was in 2007 and since then many developed countries like Germany, Australia and Canada and some states in the USA have adopted new ways of measuring progress. The trend has slowly catching on.  

The wellbeing measures may not be perfect, yet it reflects a growing realization that economic growth and its manifestation of materialism is making millions of people joyless, anxious and, even worse, depressed. Far from resolving economic stagnation, mass production and mass consumption has resulted in mass depression. The resultant mass monotony of mass produced products has accentuated demand for new products which in turn has triggered status anxiety leading to over-consumption and over-stuffing. Diminishing marginal utility notwithstanding, multiple influences work on people to stuff their wardrobes with clothes they may not wear and homes with products which are put to use once in a while. 

Like obesity, stuffocation is turning out to be yet another epidemic. Lifting the veil on why we live the way we live, trend forecaster James Wallman constructs the compulsive history and the obsessive psychology of over-stuffing and its dreaded consequences, both on the environment and well being. It was the future president of United States, Herbert Hoover, who had planted the idea of ‘creating desire’ through advertisement as early as in 1925. By revolutionizing the counterintuitive idea that becoming prosperous is not by saving but by spending, the sagging future of the US economy could be revived. The result was a society where people thought of quantity of stuff first, and quality of life as only an afterthought.  

While sympathetic to excessive consumerism, Stuffocation provides insights on the emerging trend of de-stuffing wherein materialism is consciously being replaced with ‘minimalism’ through creative and imaginative experiments. More and more people are now realizing that they would be better off if they lived more simply – with less stuff. In numbers, around 40 million in the UK and 240 million in the US are actively ‘de-stuffocating’, opting for a life with fewer material things. That ‘prescribed living invites doctors’ prescription only’ is slowly dawning.  

Using true life stories Wallman demonstrates that consumerism has become a virtual game of snakes and ladders. The constant advertisement bombardment leaves us feeling always at the bottom of the pile looking up. And that, in a meritocratic system like ours, leaves us feeling anxious, stressed, and depressed. Yet, there are the likes of Nicodemus, Millburn and Cantwell who have devised ingenious solutions to possess only as much as was needed. Howsoever enlightening new way of living might seem, status quoist would find it less inspiring.  

Wallman is pragmatic about his manifesto for change. The solution to stuffocation is more than just throwing out the stuff and slowing down the materialistic machine. More than anything else, it needs a cultural transformation, a change in human aspirations. Stuffocation is not only inspiring and persuasive, but provocatively clever.  

Stuffocation: Living More With Less 
by James Wallman
Penguin, UK
Extent: 358, Price: £9.99