Easter and Eostre, Germanic goddess

In the Christian tradition, it is Easter – named after Eostre, the Germanic Goddess of Fertility and Spring. It is that time of year, when we look for growth all around us. Yet, more prosaically, mention growth to most and we talk about recession and how ironically the current German goddess (Chancellor Merkel) is not so keen on helping those in need around the periphery of Europe.  She wants them to help themselves.

Growing Pains

Michael Heseltine, Cabinet Minister under Margaret Thatcher, who recently provided a report to the UK Government on the regeneration of English cities that David Cameron and George Osborne have welcomed , told The Independent newspaper on Saturday, March 30, 2013 that: “the richer you get the less imperative there is” for people “to drive themselves”.”

BBC Radio 4 followed this up with a debate on Saturday’s Today programme between Mariana Mazzucato (an economist) and Terry Greenham (from New Economics Forum – NEF). Terry ended by calling for more quality rather than quantity in how we measure “growth” – that GDP as a measure was flawed.

Our Affluent Society

Back in May, 2012, I posted “The Affluent Society and Social Balance” which looked back at the writings of John Kenneth Galbraith (author of The Affluent Society) and wrote about how mindsets had not changed since he wrote the first edition in 1958. Quantity was still valued over quality – economics was still all about more things, not more quality of life despite our (developed world) ability to acquire so much stuff.

I spelt out four areas for concern as developed nations seek to address further “growth” requirements. They were characterized as follows:

Forty years ago, five, major elements were missing from or only sidelines in Galbraith’s analysis – issues which have become more central over time and which complicate the prescription that Galbraith proposed: They are repeated below:

1. Globalisation

2. The errors in GDP accounting – quantity vs quality

3. The Environment – valuing quality

4. Civil Society – ending the private vs public sector spat

5. Social Balance

1. Global Trading

The world is a different one from 1958 or even 1973. We trade globally and the developed nations increasingly use labour from the undeveloped nations to do low-cost, manual work (often in conditions we would not tolerate in our own countries). It is a 19th Century state of work but internationalised– where now, international companies tend to operate as the mill owners of old.

From a micro-economic sense that is understandable – each company is different and many act responsibly. However, from a macro-economic viewpoint and from an international political viewpoint, there are limited mechanics for equalizing health and safety laws let alone education and pay scales.

Galbraith’s concern was that we produced too much and that we should be able to make less in a country like the USA. When the work goes international, the responses to the problem have to as well.

2. Production by numbers: quantity versus quality

In an affluent society, production is made the cornerstone of all we do (the economy is central to all our decisions) because work is needed to secure income. Even in an affluent society, income at a certain level is deemed to be critical. Products of progressively less use (or utility) are sold (often solely on the back of advertising) and we buy them and this is meant to keep us in work and more buying goes on.

Of course, in an international labour market, that won’t always work (as Gandhi found out in the early 20th Century when England produced most of the cotton garments sold in India) and it has become harder to focus just on one country.

However, the global economy does not mean that products become more useful – much of what we make is simply wasting energy and resources. However, it is keeping people in work in many developing nations.

But, growth is measured by GDP and GDP is a poor measure of quality of life or even production. Quality of education, for example, is measured in GDP by its cost (an input) not an output. A £500 handbag is deemed worth the same as £500 worth of essential foods – no difference in utility is assessed.

The felling of a rare tree is “valued” at the cost of felling or its price in the market as a table. The value of a river is missed completely – unless over-polluted when its clear-up costs may enter as a cost in a nation’s GDP.

It is production by numbers, quantity versus quality.

3. Environmental Balance

While mentioning the issue of environment, the main topic of “The Affluent Society” is the social balance between public goods and market production. All these are made by people – so, the environment in which we live is ignored. The trade-off is not, of course, that simple (even though the Galbraith trade-off has never been seen to function). The environmental trade-off (our need to maintain our natural capital) is now being understood but remains relatively hidden in economic debates. Natural capital needs to be brought into any debate on affluence in society – our quality of life as opposed to the quantity of life.

4. Civil Society

To Galbraith, the game is between the market and the public sector and to most, this battle still exists as the only one. There was not much mention of civil society – where most of us spend most of our time – except through discussion of leisure time. Here, the trade-off was between productive working and spare time. I expect that this assumes that all non-productive time is spent on hobbies or watching TV.

The creativity and value of civil society – a huge array of organisations from sports to international development, from charities to women’s institutes – is normally missed completely by economists and thinkers on society. The problem is that it does not fit easily into econometricians’ computer simulations: more of the “if you can’t count it, it doesn’t exist” syndrome.

Of course, for centuries, people have been undertaking “good deeds” – the history of the 19th Century is full of examples of charitable activities. However, society is changing fast and as politics loses its appeal for so many (with parties genuinely fearing for their future), the role of civil society is growing and, in affluent societies, taking back more from the state that it lost to the state in the 20th Century.

This escape from the centre is to be applauded, but needs to be better understood.

5. Social Balance

Complete reliance on the market or on the centre (libertarianism or communism) may still appeal to some. The reality is that complexity is the norm. Society is a mixture of competing ideas and competing structures – out of which we muddle through and where individuals take centre stage and form organisations to make their voice louder.

Nevertheless, we should learn from history and our mistakes. Centrism is a doctrine of the defeated; totalitarianism a doctrine of the damned. There is no one answer but a constant mix of opportunities that society provides and where changes are constant in the way we answer our problems.

The mix of competing answers does no longer rest between public and private sector in an affluent society – that is a 20th Century doctrine or response. The response now has to take into account the social balance we want from our lives between products, social value, natural capital and civil society relationships in a global context not a rigidly national one.

This means being adult about the causes of change and grown-up about the challenges – it means being international in approach and understanding the complexity of the problem – not something that can be understood wholly by quantities or computer simulations.

As we grow materially (i.e. through the quantity of products we are able to manufacture) and bump up against the troubles of environmental degradation and massive disparities of wealth and conditions (on a global scale), the question to be addressed is how does a complex society best form itself to take the decisions it needs to maximize the value we all give and receive from this “affluent society”.

So, should we Give up on Growth?

Terry Greenham of NEF would propose (as does NEF) that this is what we have to do. As the developing world strives towards economic well-being as described by growth of GDP (gross domestic product), the developed world should (in NEF terms) re-balance the lives of their people so that quality is maximized and quantity is stabilized.

Of course, all our measures and motivation focus on quantity. Homo sapiens have developed over 100,000 years to seek food and shelter and the more the better. However, following Maslow (Hierarchy of Need), humans aspire to more than just “stuff” and as we gain wealth, the majority want more that is not measured.

A salutary valediction from The Independent’s Michael McCarthy (Environment Editor) today after 15 years with the newspaper, showed a pessimism that the human race could wake up to the qualitative disaster that it was causing in its rush to quantitative growth. Governments have responded with nothing in this debate – transfixed as they are by the glamour of GDP statistics. Heseltine is the first senior Conservative in the UK to state the obvious – that being the fastest growing economy is not necessarily what we all want. GDP is, in reality, meaningless as it fails to measure value as outlined above. A tree is not worth the amount it costs to fell and transport; a river is not worth just the cost of keeping clean – they have value beyond this that is not within the bounds of GDP.

Businesses, operating in the micro-economy cannot be expected to make the change – they are set up to benefit their shareholders and adjust to cultural and legal pressures (usually with some degree of resistance).

It ends up with Government having to lead. In very few nations is there an understanding of the problems that faces us – the race to grow GDP. Most completely misunderstand what GDP measures (and that includes most economists – centred as they are on econometrics the simulation of economies that reflect the 19th Century reality not the 21st Century’s).

We need to establish measurement (if that is how we work best) of the Gross Domestic Value  –  GDV  –  where Value takes over from product (things).

In this way, CO2 in the atmosphere can be valued; that tree being felled can be valued; humans can better value their time given back to society.

We should not give up on growth, but growth of value not product or income (based on the wrongful simulation of salaries, costs and sale prices).

National Value or Gross Domestic Value should become the target – not how many products we have. The question is whether there is a drive and energy to establish an understanding of what really is important or whether (as economist Georgescu-Roegen said in the 1970’s)

“Perhaps the destiny of man is to have a short but fiery, exciting, and extravagant life rather than a long, uneventful, and vegetative existence. Let other species — the amoebas, for example — which have no spiritual ambitions inherit an earth still bathed in plenty of sunshine.”

Michael Heseltine is only partially right. There is a limit to the drive and push people have to continuously get more stuff – but, there is probably no limit to our drive for more value. Michael McCarthy is, maybe, too pessimistic – we can drive human growth through value not products – GDV not GDP.

 

Advertisements

Two-speed economics – Technology and Governance

The Price of Externalities: Georgescu Roegen Extravagance

Fast lane – Markets at the speed of technology

Tom Standage’s book “The Victorian Internet” describes how the mass of wired communications – the telegraph – changed the developing world – (http://www.amazon.co.uk/Victorian-Internet-Tom-Standage/dp/0753807033/ref=sr_1_1?s=books&ie=UTF8&qid=1347191394&sr=1-1).

As did Gutenberg’s printing press around 1450, the telegraph, the telephone, the fax, the mobile phone and now the internet and the world wide web continue to transform our ability to communicate and miscommunicate – instantaneously. There is no question that technological development races onwards. The human race has a special ability to make extraordinary progress in scientific research and understanding and in the application of that through engineering into products that transform the way we live.

The technological advance is propelled by the “marketplace” – where supply and demand perpetually force change.

Slow lane – Governance at the speed of bureaucracy

As we continue to make enormous gains in technology, our ability to keep up with the excesses of the market (market waste) is almost the opposite. It seems that we react late to technological advancement – delays that can cause inconvenience but also (at the extreme) loss of life.

Inconvenience: the UK awaits the Leveson Commission report into phone-hacking – the use of technology by certain newspapers to obtain salacious stories on (mainly) celebrities. Newspapers are closed, criminal prosecutions are under way and the possibility that press freedom will be curtailed.

Loss of life: the destruction of our environment through global warming (CO2 emissions and the potential for vast amounts of methane to be released by the rapidly melting glaciers) is a direct result of technology and manufacturing’s use of fossil fuels. It could prove just as damaging (or more) than the technology and development of weaponry that fuelled the two World Wars of the 20th Century.

The slow lane is inhabited by politicians and civil servants that exist in a variety of slow lane decision-making arenas. These could be democracies; they may be legalist governments such as China.

The slow lane is inhabited by the “mechanics of government” or “Market Governance Mechanisms” (MGM)– “governance”.

The tortoise and the hare

Since the development of governing institutions, those in government have continuously sought to control technology and its effects. From the control of counterfeiting (as in Newton’s day or now), developing health and safety standards, maintaining arms control, to reducing environmental degradation, people have put their faith in governments’ ability to manage the sweep of technology. Time after time, technology has been at the forefront and governance has been slow to catch up.

Aesop’s fable of the tortoise and the hare had the tortoise winning, but while the hare of technology can be tamed, it is continuously ahead of tortoise governance and, in the global economy we now inhabit, will extend that lead. It is only where governance is centralized and total (such as in Japan prior to the Treaty of Kanagawa in 1854 or where the government may be theistic such as with the Taliban) that the market is not allowed to exist at all and technology is starved.

As soon as market forces allow, the pace quickens. China is a recent example of a centralized, legalist state that remains in control but has opened up the marketplace – totalitarianism plus capitalism. Of course, the rise of technology is a serious threat to governance stability in China. This is exacerbated by world-wide communications technology that provides comparisons with the rest of the world to every region. This comparative data spreads the world on what is available and draws everyone to want the same – more products and the latest technology. The hare merely passes on the baton to the next hare.

In the same race?

The question of how Governance reacts to the market is being played out constantly. Whether it is the forlorn approach of international Governance to environmental issues or national Governance reaction to the internet or any number of other interactions, Governance and the governing seeks to manage technology and the effects of technology.

The rationale for Governance (and control) over technology is based on a mandate from the public (whether by vote via manifestos or on a perceived basis – as in China or a theistic basis or historic basis as in most of the Middle East). This mandate often runs against the market – and many, for example, Tea Party libertarians in the USA, believe that Government should play no part whatsoever in managing the market. They do not believe that Government has a role to play at all. This Ayn Rand view of the world, the most extreme market view of governance, believes that the “invisible hand” will provide the right result.

So, should technology be subject to control? Is this two-speed race real?

The answer has to be “yes” – but an acknowledgement that it is a race would be a start. Then, we may be able to establish some of the rules: rules which enable the development of products and technology while ensuring that the trade-offs that we have to endure are sufficient to allow us (and other life forms) to continue to survive.

Race to what?

The marketplace works best when there is an identifiable demand and an ability to supply. This is the basis upon which economics exists. The market, however, is but one aspect of our lives and the market cannot dictate whether a particular form of animal life is allowed to survive or whether desertification is made worse in Sudan, for example.

These are typical market externalities and the market appears to have no answer to such difficult outcomes. These are outside the market and the invisible hand assumes that they can be dealt with as externalities – and forgotten.

These externalities, or market anomalies, are where non-market forces reside. Much of this is the responsibility of market governance; some of it is charitable work or non-market, voluntary activities. However, technology is primarily (at least in the 21st Century) market driven (as opposed to driven by government spending on defence, which brought into play technological advances in the 19th and 20th Centuries).

The race that technology exists to fight is one of material “progress” (advances in health care, biotechnology and the like are within this area) where there is a defined demand.

Governance is then required to sweep up behind in ensuring that the advances or changes in technology are suitable or genuinely advantageous.

Of course, as Georgescu Roegen (a leading economist) stated in 1975: “Perhaps the destiny of man is to have a short but fiery, exciting, and extravagant life rather than a long, uneventful, and vegetative existence.”

Intersection: market and governance

At present, the governance of technological externalities problem is two-fold:

(1) Each nation works out its own response to changes – often many years behind the change itself

(2) There are serious world-wide technological implications – changes that impact regions and the world – not just nations.

The problems get bigger as the intersection of the marketplace and governance is mainly concerned with economics, not externalities. Yet, this may be the biggest problem concerning mankind. Working out how to properly manage the interaction between the marketplace and governance in terms of market externalities while allowing for competition (the essence of the market and the progenitor of technological change) may well be the biggest challenge we have. If capitalism is the norm – and through this the market economy – what role has governance of the market – nationally and internationally?

Can institutions that are already in place (such as the WTO or UN Conferences on the Environment or IAEA or any number of international institutions that operate today (see: http://www.genevainternational.org/pages/en/55;International_Organisations) keep up with the market whilst enabling or at least allowing the best of what the market does to flourish?

Is it even possible for the market – now on a global scale – to be centrally managed to the extent that externalities that we all pay for in terms of health and safety and maybe inter-generational catastrophes of the future can be in any meaningful way properly be taken into account?

Or, are there self-organizing principles that guide human evolution and probably guide our economic and technological progress which work and negate the need for any central institutions?

An Olympian Challenge

 

To repeat: the governance of market externalities may well be the major challenge that mankind has to bear.

Already, we may be dangerously close to bequeathing future generations with a challenge that may be unwinnable.

Whether it is genetic engineering, or nuclear warheads, or CO2 emissions or whatever, the global challenge is to admit that the challenge is a real one and that the market, left to its own devices, is unlikely to deliver the desired results in a timeframe that will allow life to continue to prosper – the Georgescu Roegen extravagance

Libertarians argue that we will ensure that technology and the market will find the solutions – a hope for the best approach that they believe will get us out of the Georgescu Roegen extravagance.

However, the danger that the challenge will be beyond the capability of the marketplace is large enough for us to consider the consequences of failure. The fact that we can obtain information quickly and internationally does not help unless we can use the information and make decisions quickly. Governance mechanisms are the opposite. It now looks increasingly like 19th Century institutions are incapable of addressing the negatives that the marketplace throws up – unpriced externalities Maybe the only way to solve the problems of the marketplace is through using technology and self-organization on a local basis so that externalities are assessed and redressed as appropriate.

This means that the role of international organizations would be to assist the process. Instead of not-for-profits like Witness (http://www.witness.org/) acting on their own to provide assistance to local groups (“See it, film it, change it”) it would be the role of large national and international institutions to enable local groups through technology. Markets are self-organizing but have created a degree of externality that is seriously and adversely impacting societies throughout the world. International governmental organizations are failing to come to terms with this. So, the role of national and international institutions has to be to equip and enable local groups – through finance and law changes but on a vast international scale.

Just like companies and government work together to develop the markets, so governments and NGO’s /local groups should be working to develop externality solutions (with the companies wherever possible) but on an international basis.

Research is ongoing such as at http://shapingsustainablemarkets.iied.org/ and sustainability in business is now a constant theme in best in class organizations. Those such a CIMA (Chartered Institute of Management Accountants – www.cimaglobal.com) have adopted sustainability and the role of senior management in delivering this for some time. Sustainability is the central mantra of organizations like Tomorrow’s Company (http://www.tomorrowscompany.com/) and the whole CSR movement.

But, just like microeconomics and macroeconomics never come together, so the business by business approach and the international institutional approaches never seem to gel.

Witness provides a great example of the ability of self-organization – governments, local, regional, national and international should now be harnessing the technologies to equip civil society to the same on a scale never before seen. Every national government should have an Externalities Minister – where such market problems are evaluated in total, practical help is provided to civil society to address the problems and genuine dialogue established with business. Governance and the markets would then be in the same race.

Looking Down from Mount Olympus

With Olympics fervor at its height, it’s tough to resist Homer’s description:

“Olympus was not shaken by winds nor ever wet with rain, nor did snow fall upon it, but the air is outspread clear and cloudless, and over it hovered a radiant whiteness.” Homer, Odyssey.

Today, the equivalent of the 12 Gods on Olympus are, maybe, the G-20, or G-2, or the UN or any of the international organisations that are set-up on our behalf.

Or, maybe it’s closer to home – the national heads who make up the EU or the lesser number that make up the EZ; the 100 Senators in the US Congress.

Or, maybe they are the 1% who own 40% of the earth’s assets (financially-speaking).

Or, how about Forbes Global 2000 – the top 2000 of the world’s companies that, between them, account for $149 trillion in assets and employ 83 million people. This compared to McKinsey’s estimate of $212 trillion value of the world’s capital stock in 2011 – a huge percentage.

Icy Slopes

The Greek Gods took their place after a war with the Titans – who ruled before them. Mythology into reality – our new Gods rule in much the same way after a 20th Century where totalitarian regimes fought each other, amongst each and against  democratic nations in bloody conflict. Millions died in China, the Soviet Union, Europe, Vietnam, Africa, Indonesia and elsewhere as different theories of government battled for supremacy.

Francis Fukuyama declared it “The End of History” as liberal democracy supposedly triumphed. We know now that he was wrong (as he has himself declared). For, the winner (for now) was not democracy but a form of capitalism that promotes a new set of god-like creatures and a new Olympus where the wind does not blow and the air is clear. This new capitalism – the complete dominance of quantity no matter what type of government is in power – was relatively bloodless in its conquests, but no less callous in its purpose. Indeed, its callousness is worse than before as it is merely the “invisible hand” that drives the marketplace that has led to the victory of the new Gods.

Now, sitting upon the summit, surrounded by the icy slopes that let few into their circle, they can look down upon the rest in their eco-defended enclave.

How the War Was Won

 

The titanic struggle was won on the back of the primacy of goods – developing the ability for ordinary people to secure their basic material needs and then onwards to “choice” and leisure and luxury. This has been wonderfully accompanied by the ability of business to promote their products so that demand could be developed without the consumer realizing it. This ability to influence demand (so brilliantly described in Galbraith’s “The Affluent Society”) has led to a victory of quantity over quality in the West and will do so elsewhere.

The victory was made easier by Governments’ willingness to adhere to the 19th Century economic theories that made “growth” and GDP the concepts upon which all governing was placed – but, placed them in simulations which cannot reflect reality. Mathematicians and econometricians have extended the fallacy – we live for numbers. The evidence for this can be seen so well in Russia and China. For most of the 20th Century, both held out as anti-capitalist bastions as the world moved to strengthen democracy. Neither has succumbed to democracy – Russia is a gangster-elite State, China is a legalist, centralized State. But, both yielded wholeheartedly to the market.

Who Won the War?

Many argue that the democratic West won the war (as Fukuyama attempted to suggest) but this is wrong. The western form of liberal democracy with its desire to provide representative government, elections and low corruption levels (comparatively) as well as supposed access to education and upward social mobility is losing out. It is arguable that even in those countries that still pursue these ends, there is now a vastly worsening separation between rich and poor and a hardening of social structures – with far less mobility.

In China and Russia, elites have won the war and their instruments of war have been capitalist – as their citizens climb up Maslow’s hierarchy of need from the very bottom, quantity of goods is supreme no matter how they are derived. As Jonathan Fenby describes in “Tiger Head, Snake Tails” this is, in China, despite rampant corruption, ecological degradation and vast differences in wealth between elites as well as complete indifference to the vast population when their houses are demolished to make way for new buildings or motorways (for example).

Who Lost the War?

Millions of lives were lost in the 20th Century as nations defended themselves against the onslaught of totalitarianism. But, a new totalitarianism has taken root right beneath our noses.

It is the totalitarianism of the elites that control the markets – markets fed by a constant diet of GDP statistics and growth targets.

The losers are (in Orwellian-speak) supposedly the winners – the mass of the population that has grown “wealthier” throughout the latter half of the 20th Century.

So, it seems to be a benign revolution but the problems are becoming clearer by the day.

In Greece, home to Mount Olympus, the country is in its fifth year of recession. In Spain, 24.6% of people are now officially unemployed. In most countries, the gap between the wealthy and the rest is growing steadily.  Economic strains are now working their way around the system as growth (measured traditionally in 19th  Century models) stalls outside of newly developing nations (yet, who believes the measures coming from China?). Today’s youth in the developed west are unlikely to be “wealthier” than their parents in pure GDP terms.

But, we should not be focused on pure numbers. Economic growth is also threatening the ecology of the planet at an alarming rate. Whether or not fossil fuels are near their end, the effects on the planet are growing and recent changes to our weather patterns merely the first signs. Our damning footprint is ever more etched on the planet and real risks are emerging that the life styles we live now may not be available for long. As Rumanian economist Georgescu-Roegen surmised over fifty years ago, maybe we can’t change and will simply go out in a puff of smoke.

Maybe, though, society will not, for ever, tolerate the new totalitarians, the new Olympians.

The Gods were not immortal

 

Of course, nothing lasts forever. The Greek Gods did not survive (except in mythology) and neither will the current ones.

The problem is that we are engrained with the belief that quantity is the key to good life (which it may be up to a point) and have lost a connection with what society is about. Mass production has led to greater wealth but, as Galbraith saw 60 years ago, society cannot be all about quantity.

Maslow, developing his Hierarchy of Need as a marketing tool, expected that we would go beyond quantity to some form of self-actualization. We have definitely not managed that yet but we have some signs that societal self-actualization is possible.

A major problem in the way of this is that different countries are at different stages of economic development. China has a massive population still well down the material scale and there will be no let-up in the leadership’s drive for “growth” to stem the dismay of their people on all other issues. In Africa, the longing for material wealth is as strong and who can blame them bearing in mind the economic and social torment they have suffered?

So, initiatives like Zero Impact Growth being developed by John Elkington and his Volans company are worth considering.

This is an approach to growth with zero impact on the planet and ultimately to give back more than is taken out. Where others seek to quantify (and there are dangers in the approach of quantifying everything), the Elkington approach is to develop a maturity matrix as follows:

Maturity Level Definition from ‘The Zeronauts’ Analogy: Characteristics of a company on that level
No strategy and goals No definition The company barely understands the relevance of restructuring its actions towards sustainable solutions and hardly reports on sustainability. Furthermore, no strategy has been defined and no targets have been set.
Eureka Opportunity is revealed via the growing dysfunction of the existing order. The company understands the relevance of restructuring its actions towards sustainable solutions. No considerable actions have been taken yet and almost no strategies and targets have been set. The company does already understand the relevance of the topic though, has started reporting and communicates plans to ameliorate its sustainability performance in the future.
Experiment Innovators and entre­preneurs begin to experiment, a period of trial and error. Although the company has started its first inno­vation efforts and internal programs in certain sustainability areas and has developed initial policies and strategies, no concrete milestones and an overarching future vision have been defined yet.
Enterprise Investors and managers build new business models creating new forms of value. The company has developed a short- to mid-term strategy ( ≤ 2020) for specific areas and has set measureable targets. Nevertheless, almost no long-term milestones have been defined. Furthermore, they do not communicate an over­arching future vision.
Ecosystem Critical mass and part­nerships create new markets and institu­tional arrangements. Measureable, ambitious (zero) targets based on a mid- to long-term vision (≥2020) are set. Nevertheless, a conjoint approach and some collaborative aspects are still missing since the holistic zero impact growth vision has not been (fully) adapted.
Economy The economic system flips to a more sustainable state, supported by cultural change. The company has fully adapted the zero impact growth vision. Measureable zero targets that have been adapted jointly are set out for each field of action. A clearly defined strategy is in place on how to achieve these targets, with defined short- and long-term milestones. The underlying benchmarks are clearly defined.

Maybe there is some fight left and the reality behind the model is clear – we can’t fight the invisible hand but maybe there is a chance for society to develop some self-actualisation behind the corporate drive towards zero impact growth where the planet survives along with humanity.

That doesn’t impact on the gap between the wealthy and the rest as the focus is on economics and sustainability. Inequality is as important a problem as ecology. Numbers should be seen for what they are – where money is one aspect of our lives not the only one. Demos, a UK think-tank has just published: Beyond GDP – New Measures for a New Economy.

It is an attempt to seek a rationale for economics beyond numbers. Briefly it posits that:

  • GDP does not distinguish between spending on bad things and spending on good things.  By this measurement, the BP oil spill in the Gulf of Mexico “positively” contributed to the economy just like the many good and services that people actually want or need.
  • GDP doesn’t account for the distribution of growth. Our total national income has doubled over thirty years, and so has the share of national income going to the wealthiest households, but average households have seen little or no income gains. GDP doesn’t care if growth is captured by a few or widely shared.
  • GDP doesn’t account for depletion of natural capital and ecosystem services.  If all the fish in the sea are caught and sold next year, global GDP would see a big boost while the fishing industry itself would completely collapse.
  • GDP doesn’t reflect things that have no market price but are good for our society, like volunteer work, parenting in the home, and public investments in education and research.

Two studies that show on this morning after that wonderful Danny Boyle-inspired Olympics night – where values were keenly shown as more than just money – that the slopes of Mount Olympus are slippery but not completely impassable: a Danny Boyle-inspired dose of self-actualisation.