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Goalposts on wheels....

I like to think I am only county, rather than national or international standard when it comes to cynicism, but I think I may be about to graduate. Alternatively, I spend far more time than is healthy scanning the headlines at the EU press room.

Anyway, faced with this, Questions and Answers on Gross Domestic Product (GDP) , I suspected that foul play was afoot, and indeed it is.

So, "What is GDP? GDP is the gross domestic product of a country. It measures the total final market value of all goods and services produced within a country during a given period. GDP is the most frequently used indicator of market activity and is most often measured on an annual or quarterly basis to gauge the growth of a country's economic activity between one period and another. GDP is also a measure of total consumer, investment and government spending plus the value of exports minus imports".

Reasonable enough, yes?

But here come (some of) the caveats, the weasellings, the evasions, the non-sequiturs (typos are in the original):

"But the way GDP takes into account social and environmental issues in measuring economic growth is questionable. GDP does not factor in a number of elements important in determining the well-being of people. For example, it overlooks the value of certain non-market goods and services such as natural resources and unpaid activities and leisure... Average income provides no indication about the distribution of income between citizen. And it focuses on short-term economic activities rather than longer-term sustainable development aspects such as the growth of natural, economic and human capital".

Note how the essentially clear-cut and measurable is at risk of being muddied with the intangible or abstract. Let us say I was a Frenchman living alone and barred from working overtime, and found it hard to make ends meet. How 'wonderful' would all that leisure time be to me then?

'Distribution between citizen (sic)' - Now what could this possibly imply? Could it possibly be that a more even distribution would be more in keeping with 'social justice', and therefore a good thing? I think that is exactly what the writer of this Q&A thinks.

"Citizens are as a general rule better off if they are richer. However, the quality of life or well-being also depends on the type of goods consumed, the amount of leisure time available, the relationship with families and friends, and the health of the surrounding environment. Today a greater number of people feel their well-being is undermined by too much pressure of work, unemployment, family break-ups, pollution and climate change."

Me, I'd accept a 500% pay increase in return for a bit more acid rain.

And what is the EU going to do?

"The European Union is committed in taking leadership in the move to integrate non-economic factors into policy-making beyond those currently used by mainstream economic indicators. A preliminary version of an integrated environmental economic accounting system is due to be operational by 2010. The special importance of this system is that it would include stock taking of natural resources and human and social capital rather than just the use of these resources. The system would also focus on the role of eco-systems in providing welfare."

And for why?: "GDP does not measure wealth. It measures consumption and investments in a given year, not how rich people are, or how much wealth society has through the accumulation of buildings, machinery, consumer goods, schools, universities, road and rail networks, and art. There are very few statistics on material wealth and even fewer on natural, environmental, social and cultural wealth. Material wealth too often overshadows the pursuit of non-material wealth. Access to improved data on non-material and non-economic wealth would help citizens and policy-makers better balance the various aspects of well-being. This is what sustainable development is all about".

That is my favourite bit I think. A value is going to be placed on the Haywain, the Fighting Temeraire, the Cairngorms and for all I know the view from my office window (I'd rate that as worth maybe 10 pence a day), the graveyard of old PC bits lurking in the cupboard and my pile of yellowing copies of Private Eye.

And why are they going to all this effort? Because fiddling around with figures allows various countries in the EU to outdo the OECD average for things as nebulous as 'Ecological footprint /person (hectares)', 'Healthy life indicator' and 'Happy life'. Just an oh so minor point to note, the OECD includes the US, Canada, Japan, Korea and our Antipodean kin, not that the EU data tsars think that there in any way comparing themselves to them....

As to 'happy life', Denmark is the place to be at 62.7 years. The UK is 'rated' 55.2, and given some fairly grim years in the past, I must be entitled to a good few decades yet.

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Anonymous grumpy granny said... 11:21 am

Fascinating, but I am confused. How do I or they measure the value of my 2 year old grandson's "art" blu-tacked to the fridge door? Can I expect an inspector any time now with his clipboard and calculator? And more to the point, will I be fined should I not be at home when he calls? I am worried about all this and would value your reassurances.

Cynical? Moi?  

Blogger Croydonian said... 11:27 am

GG - I do not think that junior's artwork will catapult you into a higher tax band quite yet, but maybe a eurocommissar will make an assessment of the painting's merit and then conclude that you are better off than the Johnsons in Peoria, the Suzukis in Osaka and the Kims in Seoul.  

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