On November 25, 2019, Jon Queally writes on Common Dreams:
“It should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine,” writes economist Joseph Stiglitz, who won the Nobel Prize for Economics in 2001. (Photo: Local Future Project)
Nobel Prize winning economist Joseph Stiglitz is warning the world that unless the obsession many world leaders have with gross national product (GDP) comes to end, there will be little chance of adequately fighting back against the triple-threat of climate destruction, the scourge of financial inequality, and the crises of democracy now being felt around the globe.
In an op-ed publish Sunday in the Guardian, Stiglitz says that these interrelated crises of environmental degradation and human suffering have solidified in his mind the idea that “something is fundamentally wrong with the way we assess economic performance and social progress.”
“Something is fundamentally wrong with the way we assess economic performance and social progress.”—Joseph StiglitzDefining GDP as “the sum of the value of goods and services produced within a country over a given period,” Stiglitz points to the financial crash of 2008—and the so-called “recovery” which has taken place in the decade since—as evidence that the widely-used measurement is not up to the task of providing an accurate assessment of the economy, let alone the state of the world or the people living in it.
“It should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine,” writes Stiglitz. “We see this in the political discontent rippling through so many advanced countries; we see it in the widespread support of demagogues, whose successes depend on exploiting economic discontent; and we see it in the environment around us, where fires rage and floods and droughts occur at ever-increasing intervals.”
A central argument of his new book—co-authored by fellow economists Jean-Paul Fitoussi and Martine Durand and titled “Measuring What Counts: The Global Movement for Well-Being“—Stiglitz says that studying the last ten years of the global economy has showed him with increasing clarity why governments “can and should go well beyond GDP,” especially with the climate crisis knocking down the planet’s door. He writes:
If our economy seems to be growing but that growth is not sustainable because we are destroying the environment and using up scarce natural resources, our statistics should warn us. But because GDP didn’t include resource depletion and environmental degradation, we typically get an excessively rosy picture.
These concerns have now been brought to the fore with the climate crisis. It has been three decades since the threat of climate change was first widely recognized, and matters have grown worse faster than initially expected. There have been more extreme events, greater melting of glaciers and greater natural habitat destruction.
Everything is not fine, Stiglitz argues, but says economists have been working hard on providing new ways to measure economic health. Embraced more broadly, new economic measures that include accounting for human happiness and environmental well-being could help change the course of humanity.
As he notes in the op-ed, “If we measure the wrong thing, we will do the wrong thing.”
Gary Reber Comments:
The key is addressing continued unchecked consumption and growth, and embarking on responsible growth that restores and enhances our environment and uses all means of renewable and recyclable resources.
It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic wellbeing and advance environmental preservation and enhancement, as well as the creation of quality products.
Nearly 60 years ago, economist Louis O. Kelso postulated: “When consumer earning power is systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of goods and services should rise to unprecedented levels; the quality and craftsmanship of goods and services, freed of the corner-cutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels; competition should be brisk; and the purchasing power of money should remain stable year after year.”
Without this necessary balance, hopeless poverty, social alienation, and economic breakdown will persist, even though the American economy is ripe with the physical, technical, managerial, and engineering prerequisites for improving the lives of the 99 percent majority. Why? Because there is a crippling organizational malfunction that prevents making full use of the technological prowess that we have developed and are developing. The system does not fully facilitate connecting the majority of citizens, who have unsatisfied needs and wants, to the productive capital assets enabling productive efficiency and economic growth.
To achieve responsible “green” growth, we need to bring together our architectural, building construction, environmentalists, “green” build specialists, environmental scientists and all who can contribute ideas, innovations and inventions that will form the building our future society.
I, as one person, approached this challenge when I designed and built the first Optimum Performance Home®, a LEED Platinum designed and constructed “green” home. I searched out these key leaders in my research to design the home. The home is located on an acre overlooking the Pacific Ocean at The Sea Ranch, approximately 100 miles north of San Francisco.
The showcase project is exemplary of the “Ultimate Home Design” concept, which integrates universal design with the best sustainable building practices while exerting minimal impact on the environment. A building science systems approach to home building was the cornerstone of the project with emphasis on the relationships between the home’s components and its environment. Also paramount was good stewardship — proper regard and respect for the rights of neighboring homeowners and the surrounding natural environment. The goal was to optimize occupant health, comfort, and safety; maximize energy efficiency and structural durability; and minimize environmental impact. As well, the goal was to provide a nurturing home environment to support independent living and sustainable lifestyles.
There are few parts to this design and construction that are conventional. The home features new and innovative “green” building materials and construction, with a large roof comprised of 37 solar panels with battery storage for 24-hour electrical service, two large hot-water solar panels, gutters designed to capture rain water for storage in a 3,000 gallon under-the-driveway cistern for irrigation of the natural florae and trees on the property, five 310-foot-deep geothermal wells for radiant floor hearing and air-conditioning, universal design construction for lifelong living (aka aging in place), and a list of other “green” aspects that are far too numerous to list here.
For information on the design and building of the Optimum Performance Home see my “green” architectural publication Ultimate Home Design® at http://ultimatehomedesign.com, http://www.ultimatehomedesign.com/oph.php and https://www.ultimatehomedesign.com/oph/uhd03oph03.pdf.
