Redefining Our Economy and Wealth
by tjrifai, Thu Jul 02, 2009 at 06:43:50 AM EDT
In a growth capitalist society, we must define economy as the way in which a society distributes limited goods and services to satisfy limitless wants and needs. Our society must teach us and train us to believe that we have limitless wants and needs in order for growth capitalism to work: the great idea that "You can never have too much money". In fact, we do not, naturally, have limitless material wants and needs. For example, I have fairly elite tastes. I want to eat delicious, high quality, healthy foods. I want a super fast computer. I want a brand new Prius, fully loaded. But I don't want to eat too much, I don't want more than one PC or more than one car. I want a beautiful, well built, environmentally friendly home, but not a mansion. People who think they want 5 Ferraris, a mansion and 3 vacation homes, etc. have, essentially, been brainwashed. It is happiness and health that they want and they have been taught that these things equal happiness and health but, in fact, we know for certain they do not. I will admit that it is, perhaps, impossible to satisfy everyone's limited wants and needs but I know that they are still limited and that we are wealthy enough to completely satisfy many people's and most of others.
We measure the health and wealth of our economy in growth capitalism by Gross Domestic Product (GDP) and GDP per capita. This is supposedly a measurement of the monetary value of all the goods and services produced in a given country. The problems with this measurement are many. When we produce products that do not improve our health and happiness and are even detrimental to them, we still increase the GDP. When I purchase more food than I need and let it rot in my refrigerator before I throw it out, I increase the GDP. When people are more unhealthy and need more health care, we increase the GDP. When we go to war, we increase the GDP. And, perhaps most importantly, when we work 40-70 hour weeks rather than 20 hour weeks, we increase the GDP. Therefore, this is a horrible measurement of the wealth of an economy.
The simplest and truest definition of economy is "human ecology". If we use this as our basic idea, efficiency, health and many other important factors get factored in that are never considered in our current method of measurement. I would like to propose a quantitative measurement of human ecology.
First of all, social scientist often measure what is called a subjective happiness rating of a given society. Basically, they do a poll asking a sample population how happy they are, maybe on a scale of 1-10. Similarly, medical scientists and researchers do population wide ratings of heath that take into account things like rates of disease, life expectancy, and much more. I propose that we measure our economy, our human ecology, by multiplying the subjective happiness rating, squared (SHR^2), the objective health rating (OHR), and the total population and then dividing this product by the GDP:
SHR^2 x OHR x Population
------------------------------- = Gross Economic Health
Yeah, yeah, yeah, yeah, I know, I must be crazy, I'm turning everything upside down, how could I possibly divide by the GDP? Well, it's really simple. If we have our people healthy and happy using little resources we are maximizing the value of those resources. Dividing by the GDP pushes us to find that perfect balance of using what we really need and want. It doesn't make much sense to use too little resources leaving people unhealthy and unhappy. However, it also doesn't make sense to use more than we need to make people happy and healthy. The reason that we square happiness is because it's probably the most important factor. If we have to use significantly more resources to obtain a less significant happiness gain, I think that is worth it, so we square happiness.
The type of society social scientists have found to have some of the highest subjective happiness ratings were hunting and gathering societies and civilizations tend to have the lowest. There are many reasons for this but I think the most important one is that hunters and gatherers worked less than 20 hours a week leaving so much more time for socializing. Happiness is achieved by having strong relationships, intimate relationships, a support network, a sense of purpose in other people's lives, a sense of community, etc. Individual happiness has little to do with the individual and a lot to do with the people in that individual's life. In our society, you may not be happier if you work a less than 20 hour week because most of the individuals in your community are not and you end up spending much of your extra time alone, viewed by others as lazy. Hunters and gathers worked to produce what they really needed and wanted: food, art, homes, music, clothes and much more. Nevertheless, not much energy was put into producing things like homes. A simple, easy to build home would do. Doing valuable work is also an important happiness factor so when, in our society, you have a job where your work seems to benefit others a lot (in terms of their health and happiness), you tend to be a lot happier than when you work long hours to produce junk that people don't really need. Today, it may seem that hunters and gatherers aren't so healthy but that is because the only ones left live in extreme conditions where no one else wants to live. Millenia ago, with their physical exercise, their diverse diet of about 25% animal foods and 75% plant foods, their happiness (which itself contributes to health), etc., they were, perhaps, very healthy. Today, their extreme environments coupled with various outside influences leave them both less happy and less healthy. Although I believe that hunting and gathering is the way of life human beings evolved to live in, I am not suggesting that we somehow become hunters and gatherers or that that's even possible or that that's even the best thing. I am only suggesting that we learn what we can from them because their human ecology was very, very strong.
So let's take some examples of our Gross Economic Health. Country A will be "developed" modern country as will Country B. Country C will be an underdeveloped country, and Country D will be a hunting and gathering society from millenia ago. GEH will only make sense relative to other GEHs. I'll be using 1-100 scale for SHR and 1-1,000 for OHR, and Purchasing Power Parity GDP.
40^2 x 400 x 150,000,000
Country A: ---------------------------- = 13.7
65^2 x 750 x 25,000,000
Country B: --------------------------- = 82.9
20^2 x 250 x 100,000,000
Country C: ----------------------------- = 28.6 (This seems very inaccurate and will be discussed
350,000,000,000 later. Clearly, Country C should be the lowest)
85^2 x 550 x 25
Country D: ---------------------------------- -------------- = 662.3
150,000 (tough to measure GDP of H&Gs)
So, this gives you an idea of a first try at measuring GEH. That's all this is, a first try. Country C came up with a higher GEH and yet people are suffering there. Perhaps, since much of their work is unpaid or underpaid, their GDP is not reflective of the human resources they use. Also, since things are much cheaper there, this may also distort the GDP. My only conclusion is that something is wrong with the GDP.
As you can see, my idea is rudimentary. Perhaps the OHR should be squared and/or the SHR should be cubed (this would make Country C our lowest GEH which it should be) or maybe more weight needs to be given to either OHR or SHR. Perhaps the average work week (or total work hours, not average) should be a factor in the denominator (but work is already factored into the GDP). Maybe this number should be subtracted by a factor that measures the decline or increase in the health of the environment and the amount of natural resources. I'm not even sure GEH is the right word (maybe Human Ecological Value or something else). Wiser minds than mine can figure out the details. But I know that the basic formula is how we need to start viewing our economies.
Now, think about if I am a business man selling a product with this formula in mind. I'll ask myself, does my product increase my customer's health and/or happiness using minimal resources? If it does, I am contributing to my economy. If not, maybe I need to come up with a better product. What if I am some other worker? I'll ask, how much of a positive effect is my work having on other people's lives? If it's not improving people's lives much, maybe it is time to find another job. My time is valuable and I want to use it wisely. What about if we are deciding to import a product from far away? Is this product improving our lives so much that it is worth spending the resources to import it? Is there no local product that works almost as well? If so, then let's go ahead and import it. You see, this formula can apply to so many aspects of our material world. An Alcoholics Anonymous meeting would be most valuable by this formula: using little resources (a room and a few people's time), they increase the health and happiness of alcoholics dramatically (by helping them not drink). We could use this formula to decide whether it's better to treat drug addicts or imprison them.
What kind of economic system uses this measurement (as opposed to growth capitalism)? How do we change our system and to what? Well, I don't want to leave it completely up to wiser minds to decide but, for the most part, I must. I'm still thinking about it but I certainly need help. I will say that I do believe in competition in many aspects of life. I believe in egalitarianism and equal opportunity but I do not believe in complete economic equality. I believe that nobody should have 1,000 times more goods and services than someone else in the same society (or 100 times as much or, perhaps, even 10 times as much). But I do believe that some must have more than others. If I was the best hunter in my hunting and gathering society, I would have more prestige and respect and may get a small amount of more or better material things. You see, competing for leadership, love, respect, prestige, etc. will produce a better society with a higher GEH. Indeed, the reason people compete so hard for money is because our society tells us that the amount of money we make determines our value as a person. If money was only a means of buying material things (and not a means to prestige) and if material things were not seen as being all that great, then we could have some monetary system and still have a society striving for a high GEH.
Growth capitalist societies are the first societies in human history in which greed is a virtue. Indeed, in all other societies, greed is a sin. When ever people say, capitalism is the only system that works, I say, "How the hell does capitalism work?" It really, really doesn't. It works to make us slaves. It works to make us shop rather than socialize. It works to make us wasteful. But it doesn't really work for anything positive. And now, more than ever, we need to change it. Why? Because global warming will destroy us in a matter of decades. Growth capitalism is like cancer: it grows until it destroys its host, which is the earth. A society aimed at achieving the highest GEH would be like an organism in a natural ecosystem or like hunters and gathers in harmony with their environment, sustainable, happy, healthy, etc. The urgency is real. I need your help.