The Sorry Saga of Bhutan's North

The Sorry Saga of Bhutan's North
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Wednesday, September 16, 2009

Bhutan on the Seine

Peter Foster, Financial Post
Published: Wednesday, September 16, 2009

Being vertically challenged obviously bothers French President Nicolas Sarkozy. At a visit to a manufacturing plant in Normandy last week, his aides sought out the factory's twenty shortest workers as a backdrop. On the other hand, he wasn't too short to trade in his old wife for dishy model/songstress Carla Bruni. But then she is five inches taller than him. Is that a worry? Should President Sarkozy's anxieties and joys be somehow included in the French Gross Domestic Product?

Seems like a wacky idea, but eighteen months ago, M. Sarkozy established an International Commission on the Measurement of Economic Performance and Social Progress, headed by renowned Keynesian anti-capitalist Joseph Stiglitz. This was allegedly due to "dissatisfaction" with the state of statistical information. I can just imagine the conversations along the Champs: "Zoot alors, I am absolument fromaged off with the state of zee stats. When will they incorporate zee leg over in zee GDP?"

President Sarkozy apparently wants to follow the desperately poor, heavily subsidized Himalayan kingdom of Bhutan in installing the notion of "Gross National Happiness." He claimed at a speech at the Sorbonne on Monday that focusing on GDP was all part of the "overreliance on free market principles" that triggered the global crisis. Fannie Mae and Freddie Macdidn't rate a mention.

"If the market was the solution to all problems and was never wrong," continued M. Sarkozy, "then why are we in such a situation?" But who ever said the market was "the solution to all problems?" And it's not markets that screw up, it's people. Markets just hand out the bouquets and brickbats. However, according to M. Sarkozy, one means of avoiding future crises will be to incorporate measures of such joys/aggravations as vacations (a la M. Hulot?), recycling, doing household chores, and traffic congestion. The contribution to well-being of physical attributes and sex were not mentioned, but presumably will have to be shoved in there somewhere.

Professor Stiglitz laid out his thoughts on the inadequacy of traditional statistics in a piece in last Sunday's Toronto Star. "Are statistics giving us the right signals about what to do?" he pondered. But this question begged more fundamental ones such as: who is this "we" who are seeking signals? And what do "we" plan to do with them?

Professor Stiglitz pointed out that "What we measure affects what we do," but what he really meant was that "what government measures determines what government does." Which gets to the heart of the statistical problem.

In the good old days, GDP provided a rough measure of overall output, but such statistics were always dangerous because they were the raw material of planning. Gradually, as planning failed, planners turned to attacking markets by attacking GDP. Look, they would say, car accidents contribute to GDP! Bombs and tanks contribute to GDP!

Professor Stiglitz claimed that political leaders "are told to maximize [GDP], but citizens also demand that attention be paid to enhancing security, reducing air, water and noise pollution, and so forth -all of which might lower GDP growth." But who exactly is "telling" political leaders to maximize GDP? And are we short of environmental legislation, or the threat of it, in modern democracies?
Professor Stiglitz believes, as President Sarkozy's new statistical Robespierre, that there are opportunities to "improve metrics." His ideology was clearly showing in his eagerness to incorporate inequality. "If a few bankers get much richer," he wrote, "average income can go up, even as most individuals' incomes are declining." He suggested that U.S. growth was held up as a model, but that GDP numbers didn't take account of mounting household debt. But nobody hid the household debt figures. All this establishes is that you have to look at a full range of relevant statistics to come to any conclusions. More important, you tend to pick figures to support your conclusions anyway.

Professor Stiglitz claims that policy wonks are now in a better position to assess well-being and gather the relevant data, employing such insights as that losing a job means more than just loss of income. But who except an ivory tower Martian would not know that? Meanwhile somebody has also apparently just told Professor Stiglitz that "social connectedness" is important. Uh oh. Here come those old anti-capitalist favourites: anomie and alienation!

"It should have been obvious that one couldn't reduce everything to a single number, GDP," claimed Mr. Stiglitz. But it was only ever people like him who thought that such an exercise was possible in the first place.

Now they claim access to more subtle and comprehensive measures so that they can more subtly and comprehensively interfere with our lives. Or, as professor Stiglitz puts it "Such reforms will help us direct our efforts (and resources) in ways that lead to improvement in both."

The trouble is that when he writes "us" he doesn't mean you and me. When he refers to "our" resources, he does. Meanwhile expect a lot of French people to be bothered by nerds with clipboards and happy-ometers.

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