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High GNP growth rate raises serious questions regarding genuine rise in welfare

By Bharat Dogra 

The relevance of GNP or GDP as an indicator of real well-being or welfare has been increasingly questioned. Other things being equal, in any country a period when it chooses to cut down its forests on a massive scale may get recorded in the short run as a period with a higher GDP growth compared to a period when it protected its forests with loving care. A country which chooses to go on a spree of opening gambling dens and casinos may record a higher GDP growth, other things being equal, than a country which has the wisdom to minimize gambling.
In some countries where the rates of GNP growth have been high, serious questions have been raised regarding to what extent this reflects a genuine rise in welfare. In Britain, for instance, the New Economics Foundation has prepared a report on the British economy using more comprehensive indications than GNP which can better assess health, environmental quality and security, housework and other voluntary work. The results of this exercise have been quite striking, making a major break from the conventional measures of economic growth.
This study, which has prepared an index of sustainable welfare for the period approximately of 1950-1990, showed that while GNP increased by 230 per cent since 1950, sustainable economic welfare increased by only 3%. What is even more significant is that sustainable economic welfare in Britain actually declined at quite a fast pace after 1974. During the fifteen year period 1975-1990, GNP rose by a third but sustainable economic welfare fell by about 50 per cent.
A different type of data was provided by researchers from the British Social Science Research Council (SSRC) during the early 1970s. They questioned a sample of 1500 people thrice within five years, about the changes in the quality of life. The people who were interviewed almost unanimously said that their level of consumption had gone up yet the quality of life had gone down during the last five years. What is more, they said that they expected this trend of consumption going up and quality of life going down to continue during the next five years.
A study by Herman Daly and John Cobb titled ‘For the Common Good’ supports this view in the context of the USA. This study published in 1990, shows that economic welfare in the USA rose to a peak in 1969, remained on a plateau for eleven years, then fell during 1980 to 1986 even though GNP continued to increase.
Economist Havelock R. Brewster wrote during the 1990s about the experience of developed countries, “Over the last ten years these countries have created an additional $ 6000 billion of national product. But few would be genuinely persuaded that the welfare of people in their societies has improved. Most likely, it has diminished - with the growth of unemployment and totally destitute people, the deterioration and delay in the provision of health services, alienation of the young and the old, diminishing participation in decision making, ever-increasing obesity, urban decay and chaos, the deterioration of transportation and other public utilities and endemic pollution.”
To the extent that GNP rise is accompanied by such clear gains as increase in life expectancy, these should be recognized but even here we must ask whether there is genuine improvement of overall health. In Britain, for instance, General Household Surveys in 1972 and 1988 revealed a 50% increase in ‘long standing illness’ and a 75% increase in acute illness during the preceding two weeks. In the same country during 1960-90 hospital admission for children suffering from asthma went up by ten times. All this happened at a time of recorded significant rise in GNP. Walter Yellowlees, a highly experienced doctor of this country said in a paper read to the Royal College of General Practitioners about health advancement in several rich countries: “I believe it is true to say that is those countries which have achieved unparalleled advance in technological skill in medicine and in what is called standard of living, we are witnessing the decay of man - the decay of his teeth, his arteries, his bowels and his joints on a colossal and unprecedented scale.” Recent increases in mental health problems in several rich countries, among adult members of society but even more among children and adolescents, have been so extreme that in 2021 leading child health organizations in the USA called for declaring an emergency related to child and adolescent mental health--all this in countries recording some of the highest GNP in world.
However the more important point is how and where we can find significantly better indicators than GNP. Some of the previous attempts in this direction are also in need of further updating and improvements keeping in view the increasing threat from climate change and other environmental problems. The increasing environmental burden means that there is lesser scope now than ever before for all wasteful and harmful consumption and production as the environmental space within which all consumption and production should take place now is very limited.
Hence the focus should now be on the extent to which the basic needs of all people are being met in a satisfactory and sustainable way within the limits of an environmental space (one important aspect of which is within the limits of tolerable or permissible GHG emissions), the environmental space being calculated in terms of what is compatible with avoiding a survival crisis as the basic life nurturing conditions of earth have to be protected as the highest priority. This principle should not be allowed to be distorted by such dubious concepts and practices as buying carbon credits.
So a much better indicator is the satisfactory achievement of basic needs for all plus to extent to which environment space is not transcended. Further we have to consider if any country is shifting its environmental burden on other countries by shifting its polluting industries or waste products elsewhere. In mathematical terms all this will involve positive as well as negative marking, with a net value being calculated.
An additional aspect to be considered consists of social relationships, values for which can be calculated on the basis of various indicators of social integration and harmony. Lastly, indicators of equality of wealth and income as well as gender equality can be added to present a more comprehensive indicator. The extent to which a country is exploitative of other countries should get negative marking, with broad categories being decided for this, for instance a country in the category of being extremely exploitative getting 5 negative marks, while a country in the category of being moderately exploitative gets 3 negative marks, and so on.
While no indicator can be complete in itself, these suggestions can lead to finding a better indicator than the ones existing at present, either in terms of GNP or its slight improvements.
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The writer is Honorary Convener, Campaign to Save Earth Now. His recent books include ‘Planet in Peril', ‘Man over Machine' and ‘A Day in 2071’

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