Why do you crib? Why? Global-warming? Who cares? I don’t.
When the waters rush in… Yes, they would one day. The world would end. But I’d be gone by then… I would be too dead to die again.
During the past few days of my trying to understand GDP – the way it is calculated, the assumptions in its formulations, the economic health of the nation it claims to portray – I have found myself more than once amazed at the philosophical relevance (or the absence of it) it may have in the current economic scenario. What this small essay tries to do in the lines that follow, is to put my understanding into words.
A measure of the economic performance is what led to the formulation of a number of indices of which GDP was chosen as the one that most effectively, if not accurately, portrays the economic health of a nation, state or a community. But why at all do we need a measure of economic performance? The reason is not just limited to understanding the economic progress the country has made though it may have been one of the reasons it was formulated. It is also possible that it is only the means to an end. GDP, unfortunately, has become just a number which is mentioned by the ruling party to boast of their involvement in its growth if it has indeed grown, or by the opposition, otherwise, to point out the inefficiency of the governmental policies. The sad truth is that this measure is rarely used to assess the economic welfare of the individuals who form the community of which it is calculated
This argument is what has been used by many economists of the modern age in standing against the measure of GDP and complain that the measure has been unable to help the governments in gaining information on the progress that an individual has made economically and work towards improving his or her economic state. I am not very sure that understanding the economic welfare of an individual is the goal of calculating GDP. It is, at least according to me, a way to gain superior status in the international arena, or to lure further investments from some corporate giants. GDP, as I see it, is only a measure of the opulence in the country and I am sure that the measure of the opulence can never correctly portray the living standards of the people in the country or the satisfaction or happiness they enjoy. For that matter, no measure can effectively show the growth or decline of a country’s economic health. So, what is the good that is coming out of the arguments that GDP is flawed or handicapped in many respects, and that it should be replaced by a better measure? But would this guarantee the enviable state of sustainable growth that countries aim for and that which all economic policies should eventually lead to?
The disconcerting question all this leads to is – Is sustainable growth indeed the final aim?
With a delightfully optimistic view of the world, we are led to believe that the final aim is indeed sustainable growth – a term which has been used in all major intellectual circles with exceptional liberality. But this is one wonderful occasion where the moral of an old unbelievably stupid story narrated during days of many childhoods stands to be vindicated.
“Slow and steady wins the race.” The stupidity of the story is only matched by a similar virtue in the tortoise that agrees to run the race with a hare, clearly much faster, agile and sure of winning. The current race between nations for economic superiority is startlingly similar to the hare-tortoise race with the only difference being the length of the race. Here the length of the race (in terms of measurable time) is assumed to be of infinite time. And there is not just one hare or tortoise. The developed countries are now growing relatively slowly, but their GDPs are much higher than those of the developing and underdeveloped countries. The tortoises of the world would eventually overtake the hares because there would come a time when the country can grow no further. The reason for this is the very base of economics – the scarcity of resources.
It is true that countries like India and China are growing at a significantly higher rate (though India has slowed down in recent years), but the GDPs of the countries do not reveal the manner in which they are growing. Such high rates of growth are impossible without causing harm to the environment; this harm cannot be captured in the calculation of GDP. Carbon-emissions, deforestation are some which cannot be accounted for in the current calculations. If they are accounted for, the GDPs would be much lesser. If it is sustainable growth which is the ultimate aim of all these growth-related ventures, then how is this environmental degradation being given no heed? The answer for this, according to me, is in the philosophical statement that “Man is inherently selfish. It is this selfish desire to win that drives him towards growth or success.”
It would be foolish of us to believe that it is Man’s concern for the planet or for the creatures around him is the result of his urge to do what is right and to not destroy the gift of the Almighty. My belief that Man is inherently selfish does not allow me to accept this argument of selflessness. This is, in my opinion, one tool being used by the self-proclaimed environmentalists to slow down the tortoises trying to catch the hares, even as the latter ones are busy exhausting their resources a few years away from complete depletion. So, the decisive resting period of the hares, as in the story, is not far away.
Thus, sustainable growth does not seem a possibility in the current economic scenario. A GDP measure, or any other equivalent index already developed or being developed, would only serve as a tool for nations, politicians who strive for dominance. Sustainable growth, if it is indeed the ultimate goal of all the ec0onomic activities, would not be possible by mathematical models effectively interpreting numbers, but by the basic virtue of “humanity”.
I once read an article on Global-warming and the need to reduce mindless spending by nations, in an effort to slowdown the race in the direction of ultimate destruction. I discussed this with a friend and expressed my similar sentiments. He laughed and remarked, “Why do you crib? Why? Global-warming? Who cares? I don’t. When the waters rush in… Yes, they would one day. The world would end. But I’d be gone by then… I would be too dead to die again.”