Much of the blame for our predicament has been heaped on our economic system and its social and political ramifications. This, however, is somewhat like blaming the car for the gasoline shortage. The origin of the problem lies, rather, in having made the attainment of ever-increasing material consumption our sole open-ended national goal. Obviously, any system or nation seeking infinitely increasing production in a finite world is bound to show, sooner or later, the unmistakable symptoms of its impending, self-destruction.
We have made economics, which reflects only a tiny wedge of the truth of the “real world”, the principal determinant in decision-making, and therefore have come to measure everything in terms of money, ascribing secondary importance to other terms of measurement, and least importance to criteria that cannot be quantified at all.
Not all Product Output Can Be Measured – What about the Environment?
This is tragic, because most of the really important things cannot be measured, and certainly not in terms of money; they relate to levels of natural existence or human experience far above that. Extensive, mathematically sophisticated, and esoteric economic calculations might demonstrate, for example, that one machine will cost less than 100 workers in a certain production process, and therefore should be substituted for them. Who are we, who don’t know the differ-once between a second derivative and semi-log paper, to argue? But does one measure the “cost” of a worker, perhaps a craftsman, a fellow citizen and member of society, by the same yardstick used to measure a piece of machinery, a common product? To whom does one machine cost less than 100 workers? For how long? By what measurement that makes any sense at all? And as for the piece of machinery, are not the loss of the human skills it replaces and its dehumanizing impact on those who op-irate it to be considered a part of its cost? Obviously, if there is a diminishing quantity of re-sources, and our demands upon them grow from astronomical to even more astronomical each year, and all the while worldwide competition for them heightens and becomes more aggressive, prices are going to rise, not a little bit, not cyclically, but a great deal, steadily.
That’s not permitted in Economic theory, so economists grasp at the slightest hesitation in the trend to show that everything is going to be O.K. after all. We urgently need to study means of reorganizing agriculture and other critical industries in ways that minimize the use of energy, capital, and other material inputs, in-stead of maximizing their use, as is presently the case. The objective would be to attain adequate levels of production using the technologies most viable in the long run, probably labor-intensive and on a small enterprise basis, rather than seeking only to maximize short-run output or profits. Too many people are in jobs destructive to the human spirit, and too few have an opportunity for creative work. The statistics do not show this, they could not possibly do so, but it is nevertheless the real problem with employment and work today, and it is getting worse. If human satisfaction in work is made a consideration above, or even equal to, simple production efficiency in the generation of work-places, many creative and productive work opportunities previously precluded by production maximization economics will become available, and what is today called un-employment will take care of itself. The costs of production, however wasteful the product or production process might be, are not taxed; only profits are, and it is left pretty much to the producer to decide which costs are necessary.
This is equivalent to taxing individuals not in accordance with income, but in accordance with what they report as left (their “profits”) after they have decided what costs are necessary to enable them to do whatever they declare themselves to be doing, whether or not there is any value to anyone else in what they do, and whether or not it is done in the least-cost way. Is it not strange that the cost of delivering raw materials to a factory or a product to your door is not taxed, but the expense you might incur commuting to work or driving to the store to pick up that same product is taxed? We have been taught that the costs of producing products are legitimate; the costs of producing our own satisfactions are not.
GNP Keeps Rising Based on Your Purchase Of Products
The engine that drives production maximization is dissatisfaction, coupled with the promise that products can relieve it. But products can never relieve it, because if they delivered on the promise we would no longer feel impelled to strive forever higher incomes so that we can buy ever more products. If we did not feel deprived, Madison Avenue would be considered a failure, as it would in fact be, and the entire economic superstructure based on this deprivation-driven production maximization would cool-lapse. Since this has been the path we have taken to what we have called our “development”, it is what we have tried to transfer to “underdeveloped” countries so that they can get to where we are.
Let there be no mistake or euphemistic distortion about it: generally speaking, our international development efforts have been based on the notion that we can increase human satisfaction by generating feelings of deprivation, teaching that these can be relieved by the agencies of a “modern” economy and the products they bring, and then showing how to go about it. But our own experience has shown that this cannot work. You can teach people to make more and more products; and you can industrialize a country; and you can urbanize a country; and you can destroy its culture and social cohesion in the process of “modernizing” it; and you can make it dependent upon the vagaries of the international market for its viability—all this and more has been and is being done to “underdeveloped” countries—but you can never increase general human satisfaction this way because dissatisfaction is what makes it work and keeps it running. Since making and selling products is but one small part of a culture, and serves social development only in a small way, particularly in countries traditionally not product-oriented, the notion of teaching, encouraging, even forcing foreign nations to redirect all energies to production and consumption at a faster and ever-increasing rate and calling that “development assistance” is worse than an absurdity. We are always busy trying to “modernize” the agriculture of product-poor countries. We drive people off the farms; build highways; bring in tractors that make them dependent upon us and the world for parts, fertilizers, chemical poisons, and what not to teach them to work in factories instead of their extended households during the slow season; destroy family and community life; disrupt religious cycles; pollute and destroy the countryside; create an army of unemployed urban squatters; and in general turn all but the already rich and powerful into miserable unsatisfied production maximizers and product consumers. And for what? So that they can earn the foreign exchange to buy the things they need to sup-port such a system? To increase their agricultural yield which now becomes dependent on foreign inputs and totters when the price of oil rises?
Are you Deprived Without Products? The Environment Certainly Is
To buy the products, including ours, that we have taught them to feel deprived without? The consequence of this “development” is to obliterate ways of life much older than ours. . . . No nation or government could possibly suggest to an-other how it should develop. If a government cannot figure that out for itself, it must be completely out of touch with its people, to whom it would do well to turn for advice rather than turning to foreign “experts”, the vast majority of whom have never even participated in development planning in their own countries. The drive, means, and plan for development must come from within a nation, rooted in the many facets of its cultural essence, building upon what was already there in all areas of human activity, and relying upon its own resources. If asked, we may be able to help others design better tools from local materials; achieve better health and nutrition within their environments; even make better basic products for local consumption to increase self-reliance; and, of course, always stand ready to provide disaster relief if at all possible. There is a valid distinction between lending a brotherly hand and meddling.
GNP and value of the national economic Product not Equal
The confusion between the amount of money made (GNP) and the value of the national economic product has deep and disquieting moral as well as practical implications. J.K. Galbraith pointed out many years ago that to strive for growth in money terms (GNP) alone is to declare that it is legitimate to be concerned with how much is produced, to the exclusion of concern with the actual value of what is produced. Thus, an appliance made in a shabby manner, deceptively or otherwise sold at an unfair profit, requiring many supplements for its effective operation, wasteful of resources, needing constant repairs, and wearing out quickly will result in the making of more money, i.e. will contribute more to the GNP, than a well-made, effective, and durable version sold at a fair profit. Similarly, the destruction of or failure to build an adequate, mass transit system leads to more cars, more gas stations, more auto accessories, more auto repairs, more auto insurance, more parking lots, more highways and road repairs—in short, much much more GNP— while creating much more pollution and perhaps human misery, and in the end providing much worse transit effectiveness than would have been the case with a proper public system.
Those products employing lead, asbestos, vinyl chloride, poison chemicals, and other lethal or dangerous materials in their manufacture contribute more to the GNP than safe alternatives, the production and use of which do not re-quire regulation enforcement, litigation, lobbying, and precautionary procedures, or medical treatment for victims. Selling a part of the harvest abroad, where it will fetch higher profits while driving up prices and depriving segments of society of adequate diets domestically, will produce a higher GNP than will a policy of national nutritional self-sufficiency.
In general, the more wasteful, inept, shortsighted, duplicative, uncoordinated, given to malfunction, non-durable, unfair, and inflationary our products and production techniques, the greater will be the GNP. The present GNP concept makes sense as the principal means of assessing the economy only if the sole purpose of the economy is to facilitate the making of money.
