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know-no-economics-foundation-again

There’s a really amazing report out from the new economics foundation which leads to some really rather remarkable conclusions. What they’re trying to do is in fact reasonably sensible. We all know that GDP doesn’t measure how happy people are, doesn’t tell us how resources are distributed, all it does is tells us the value added in a particular economy in a particular timespan. It is, if you wish, a measure of how much we’ve got to play with, not a measure of how we’re playing with it. OK, as long as we all understand that limitation GDP is a very useful little tool and it has the added advantage of being easy (well, easier than alternatives) to calculate. So we can measure it often and see what’s happening. Not so much “are we getting richer?”, but “do we have more resources with which to do things?” is the way I like to think of it.

Now, should people try to devise alternative measures, additional ones, to measure other things? Sure, why not? However, what comes out of such attempts might not be what those attempting might desire or worth the attempt. For example, this chart, showing “trust and belonging” across Europe. You’ll note that the countries with higher levels of such are the ones with smaller populations. Bit of a stunner, isn’t it? That smaller, more homogenous, societies end up with greater trust and belonging?

However, over and above such trivial observations, we also get in the report a reference to “longer working hours” and the terrors that they inflict upon the national wellbeing. I’m afraid that when I come across such references I simply stop reading reports these days. For the number of people doing those long working hours is falling as indeed are average working hours. As both have been for nigh on a couple of centuries as GDP rises and we decide to take more of our newly created wealth in leisure than in cash incomes.

If somebody can’t be bothered to note reality when compiling a report then I’m afraid I can’t be bothered to note anything further they might want to say in their report.

Oh, and as falling working hours, the increase in leisure time, does track rising GDP rather well, it also shows that rising GDP is still a pretty good meaure to use in trying to decide whether we’re going forwards or backwards, doesn’t it? Making the effort required to devise alternative measures somewhat moot really.