THE PRICE OF INEQUALITY: HOW TODAY’S DIVIDED SOCIETY ENDANGERS OUR FUTURE
Joseph Stiglitz,W. W. Norton & Company (8 April 2013)
How we measure performance is an aspect of the battle over perceptions and makes a difference, especially in our performance-oriented society. Our systems of measurement affect our perception of how well we are doing – and of the relative performance of different economic systems. If we measure the wrong thing, we will be tempted to do the wrong thing, and to make the wrong inferences about what is a good economic system. If we measure our success by GDP, that’s what we’ll push for, and we’ll pay insufficient attention to what’s happening to most Americans. To take another example: critics of, says, environmental regulations suggest that they are costly, that they reduce growth. But how we see that trade-off depends on how we measure output. If in our measurements of GDP, we take into account the cost of environmental degradation, then better environmental regulation may actually improve GDP correctly measured.
For years, I was told that welfare was measured through this indicator. This idea shaped my mind: I thought that to be happy, I needed to earn more money. Because as a naive kid, I thought that if a country was getting a higher global income, it would make people richer and therefore happier. Then I went to university, where we discussed this indicator. I discovered the existence of other indicators such as the Human Development Index. Life is not about how much we produce. Especially when we produce so much that we cannot even consume it. Or when we produce goods that are too expensive for most of us to buy.
In 2013, Japan’s GDP was USD4,902 billions, 4th in the World Bank ranking (counting the EU as one). Per capita, you get USD36,654/year (PPP, according to the International Monetary Fund), 24th. This is not that bad, even if it would be interesting to look closer to why there is such a difference between the 2 rankings. Nevertheless, there is around 1 kid out of 6 that suffers from poverty in Japan. Can we say that GDP is grasping this disturbing reality? No.
I am really tired of people bickering about growth in general. This is nothing much more than an ideology that says that if we have more, we’ll be happier. Buy more food, more clothes, more cars, more toys, more phones. Everything has to be brand new, faster, better. There is no time for kids to grow up, no time for us to read all the news that come from all over the world. There is so much of everything that we are drawn under this growing GDP, asking for even more, thinking that it will make us complete. And industrialized countries impose this vision of the world to less industrialized countries, pushing them to develop, produce and consume. We will push aside the issues of inequalities, democracy and happiness, putting them behind a % sign. After all, we can’t measure that; why should we care?
Listening to: BigBang – WHAT IS RIGHT