An exchange with the distinguished economist Robert Gordon on the fetishization of the GDP.
Dear Professor Gordon,
I very much appreciated your appearance on Doug Henwood's Behind the News program which aired on Thursday.
In particular, I appreciate your willingness to dispense with the rose colored glasses the donning of which seems to be de rigeur for participation in the public debate on these matters. What you are saying on the likelihood of more or less permanent recessionary conditions has the ring of truth to it precisely because it is hard to face-as are lots of the significant truths of our age. (Global warming being another instance.)
While granting that you are likely right about that I'm curious as to how you respond to the "so what?" objection, a classic statement of which was advanced by Robert Kennedy a half century ago:
"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.
"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."
Could it be the case that an excessively narrow concern with growth, and more generally, measurable, market determined price is a kind of pathology, as RFK suggests? For it would seem that it is intangible value-those aspects of life he notes and others- rather than price, which is ultimately far more significant in determining quality of life, according to any reasonable definition.
No doubt you are familiar with this and have addressed it before.
If you have a moment, I and I'm sure many others would be interested in how you would respond.
Gordon to Halle:
Thanks for your thoughtful comments and quotes from the RFK speech, which I didn't know about.
Of course, all of this welfare that is unmeasured in GDP is what my big book project is about. I'm attaching the outline and prospectus so that you can see the overlap with your comments.
The many unmeasured aspects of life that are not counted in GDP adds up to a huge amount, and I doubt if anyone will ever be able to quantify it fully. But don't assume that the ratio of the unmeasured good things to GDP are increasing over time. The rate of increase of life expectancy in the first half of the 20th century was triple that in the second half. The invention of the automobile, with its new product called "personal travel" and "personal freedom" was no included in the CPI until 1935, whereas by 1929 the ratio of motor vehicles to the number of households had risen to 90% from a starting point of zero only 30 years earlier.
As I read remarks from you and others about how life is getting better and we're not measuring it (which is true), I see and hear the crunch crunch of 100 million American feet walking in the mud outside to the outhouse in the middle of the winter in 1890. I'm willing to play the game any time of which set of three decades made the biggest difference in the standard of living, and you'll have to work hard to convince me of any other answer than 1900-1930.
Robert J. Gordon
Stanley G. Harris Professor in the Social Sciences
Department of Economics
Halle to Gordon:
Thanks very much for your response which clarifies your position.
One small point of misunderstanding: while I don't know about others, I would never claim that "life is getting better and (but?) we're not measuring it"-quite the opposite in fact. With respect to "the health of our children, the quality of their education, or the joy of their play. . . the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. . . . neither our wit nor our courage; neither our wisdom nor our learning;" there has been, to my mind, a significant regression on almost all, if not all of "those things which matter" according to RFK in the half century since he made his statement. Even while the GDP has increased by an order of magnitude.
That is to say that an important ray of hope to be read into your predictions, combined with RFK's views, is that our lives could improve along these indices over the next decades, even with anemic or even negative growth rates. That is, if we have the political will to achieve what many of us recognize as potentially in our grasp.
That said, I'm sure you're quite right that the maintenance of indoor plumbing is a necessary condition for anything approaching a minimally decent existence.
It is not sufficient, however.
Thanks again for your time.