It's my personal soapbox, a place for me to express thoughts and feelings, musings and rants, reflections and recollections; to have fun with words -- about things spiritual, environmental, social, political, economic, and, from time to time, personal. And of course about peace. Soapboxes are in public places (as London's legendary Hyde Park) on purpose, and so I invite conversations with you, for it is through civil discourse that we can gain some perspective on the seeming chaos of these changing times and learn together how to shape a positive future for ourselves, our communities, and the generations to come.

Saturday, June 4, 2011

The Economy: Gloomy or Hopeful?

Well, it's another Saturday morning in the Bay Area, and a cool, rainy one at that -- "Junuary" weather, it's being called. Let's see what's happening in the world today. Hmmm.

Oh, here are two items of note in the San  Jose  Mercury News, both related to the dismal economic situation and outlook. Very in tune with the weather. One article, appearing above the fold on page one of Section A, is by Patrick May of the Mercury News and headlined Volunteering in a Bad Economy: Down on their luck, but still giving back. The other, in the same relative location in the Business section, is by Don Lee of the Los Angeles Times and screams Sputtering Economy: Job growth disappoints.

One is human interest and hopeful; the other statistical and gloomy.

Economics is fundamentally the science of how we humans (actually, it could possibly be extended to other species, as well) allocate the scarce resources at our disposal to maximize our utility, or what we might call "happiness." We can arguably say that the most basic of those scarce resources is the time we have on this planet.

Love is another basic resource at our disposal that increases happiness, but love is limitless and so costs nothing to expend (not even time if you think about it), and we can thus use as much of it as we choose to in whatever we do. It's what economists call a free good. It can be neither bought, as Paul McCartney observed in 1964, nor sold, as Cole Porter wrote in 1930 (regarding "true" love, anyway) -- meaning it has no monetary value (though a lot of happiness value) and is thus priceless.

What the "unemployed" in the hopeful story are finding out is that they get a lot of happiness and fulfillment (and sometimes bags of food) in return for the time they employ being with and helping others (i.e., expending love). To be sure, some of them (but not all) still spend some of their time (but not all) at home pouring over want-ads and writing resumes and will at some point find other work in the money economy. Either way, all are learning much about the benefits of the non-money economy.

So, while many in the U.S. are seriously hurting in this "bad" economy, many others are discovering that they can get by with less material goods (and hence money) than they would have thought, or otherwise giving up on trying to rejoin the money economy, and are instead spending their scarce time resource on taking non-money roads to utility maximization. By thus reducing the total size of the labor force, they are happily contributing to an uptick in the unemployment rate, as reported in the gloomier of the two articles.

The gloominess comes from the way we as a society (including our government) measure economic well being. For statistical convenience, we only count as having economic value that which is quantifiable in money terms. Volunteering at the neighborhood food bank or adult day care service has no monetary value (it's priceless!). So, even though it adds a lot to happiness. it adds nothing to the most  widely accepted indicator of economic health, gross domestic product. Ditto for raising children or keeping a warm and healthy home -- unless we pay others to do it, in which case it does get counted in GDP though arguably often provides less happiness.

And that's not the end of it. Not only are happiness-producing activities not included in our measure of well being, a lot of happiness-reducing stuff is also counted as adding to well being. Consider war, politics, and toxic site clean-ups as just three examples. We spend a lot of money on them, and they thus add greatly to GDP. But are we happier or otherwise better off for them?

Fortunately, there are other indicators that more completely and accurately measure economic and social well being and progress that we can set our sights on and therefore pursue as a society. Have a look at the genuine progress indicator (GPI), the global peace index (another GPI), and gross national happiness (GNH). And the indicators we choose to pay attention to are not "just" statistics. As Lao-Tzu is reputed to have said, "If you do not change direction, you may end up where you are heading." Which heading are we following?

1 comment:

  1. well said Mike, all true since I have been looking for work, and following a very happy and creative path at the same time.
    Creative assets and Love are much more important than material goods. Money is needed though to allow "transit" through this creative world....
    Dan Kenney