In the public forums you often hear concern expressed about “the economy” – what will we do to “the economy” if we take measures about changing our energy systems, if we take action about climate change, etc. And to measure what’s happening to “the economy” people invariably use the Gross Domestic Product, or GDP.
But as Jonathan Rowe spells out in a speech to Congress, the GDP was never intended to be used in this way, and actually the guy who developed it warned – nay, begged – government never to do so. But that warning went unheeded and now here we are: as Jonathan shows, the hero of “the economy” is someone with a heart condition going through a bitter divorce, and the villains are people who conserve, grow their own food and share with others, care for their own children, and so on.
Where GDP really gets it wrong, however, is when it tries to assess a resource such as oil. Its accounting is unable to apprehend the idea of limit or depletion, so again in Jonathan’s able phrase, it’s like a fuel gauge that reads fuller and fuller as it empties. I can’t help but think of the historical lessons in Collapse, the book by Jared Diamond, in which this sort of negative feedback loop spells doom for previous human civilizations.
Take a few minutes and read the transcript of Jonathan Rowe’s speech (pdf). And thanks to Harper’s Magazine, which published the speech in its June issue (subscription needed). Photo by wallyg via Flickr.