Bobby Kennedy already said it 40 years ago…It certainly wasn't me who decided that it was necessary to radically amend the way Gross Domestic Product (GDP) is currently calculated (see this column in EUROPE 9843). A colleague indicated that Bobby Kennedy had pointed out the need for this around forty years ago, in 1968. I don't have the whole of the English text available and I'll quote from the translation: he said that GDP calculates “pollution, cigarette advertising, ambulances that are driven to motorways to clean up their victims, destruction of the forests, television programmes that glorify violence in order to sell toys”. But is does not take into account children's health, their joy in playing, the intelligence of a public debate, a sense of humour, courage, love of one's country. In brief, for Bobby Kennedy, “GDP calculates everything except what gives value to life”.
A rhetorical exercise? Purple prose? Of course; let's not forget that this was in 1968 and the epoch was ripe for it. But overall, the criticism of how GDP is calculated was already contained in the sentences quoted above. It reminds me that a special committee has been set up in France to measure wellbeing; this is essentially about the current notion of GDP being challenged. The economist, Jean-Paul Fitoussi, (who chairs this committee, alongside Nobel prize-winner Joseph Stiglitz) has followed this up with an aspect involving cities: “if rent increases in city centres, GDP rises. People will move to the suburbs and the time needed to get to work will increase; this is lost time, which reduces wellbeing but which makes GDP increase even more because petrol consumption expands”. To sum this up, GDP expands, wellbeing goes down. In these cases, the increase in domestic product results in part from a deterioration in the quality of life for citizens.
Ecological awareness grows but assessment tools are misleading. Another economist, Jean-Marc Jankovici observed that “GDP is supposed to measure progress or decline in an economy. But natural resources are also taken from the economy - energy, minerals, fish…consumed to this effect. If we calculated our GDP in this way, we would see that we have been in decline for a long time. If the only objective we continue to set ourselves is rising purchasing power, then we are heading for a brick wall: we will not obtain the hoped for rise because of physical limitations but we will have social chaos”. It is true that these positions have been known about for a long time and they are partly contested. Discussing them is something positive. All the different political forces have now taken up the essential elements from theses that were initially the exclusive preserve of the Greens and ecologists, to the extent that Europe is now in the avant-garde in these areas and its climate/energy project proves it. The specific aspect related to the calculation of GDP and economic growth, however, has remained on the sidelines. Even the forces of the Left and Greens base their demands on the traditional method of evaluating growth in GDP. It is not the objectives that need to be changed but rather, the evaluation tools.
Political repercussions. The time is right. In world trade, ecological conditions are largely imposed (even if their respect in practice is far from being sufficient): protecting forests, sustainability, environmental protection and animal welfare. At a European level, consumers are waking up and expressing greater awareness in their choices of the need for environmental protection. It is not unreasonable to believe that in the future it will be impossible to consider as a positive contribution, production methods that pollute the sea and atmosphere, destroy forests, make car traffic inevitable and provoke the disappearance of biodiversity. Albert Einstein only gave Earth a few years if bees disappeared and their existence is indeed increasingly under threat.
The main principles are acknowledged and awareness grows; it is important that the ongoing revolution also incorporates the myth of GDP as it is currently calculated and methods for evaluating growth. It is not just an essentially technical aspect that is of interest to statisticians and other experts, because political battles are often fought around one point more or one point less in growth, without assessing whom, in fact, this additional percentage point benefits. Current methods provide a distorted image of the value of a policy, the real progress made in a country and the wellbeing of a people. This is why more accurate evaluations would also help better target political objectives. (F.R./transl.rh)