Economic indices say nothing on well being of society

IN Mike McCormack's short story A is for Axe, published in his collection Getting it in the Head (Jonathan Cape, £9

IN Mike McCormack's short story A is for Axe, published in his collection Getting it in the Head (Jonathan Cape, £9.99), the anti hero Gerard Quirke, jailed for killing his blather with an axe, reflects on his new found prestige in Irish society. "I am not alone," he observes, "in sensing a general awe that at last, small town Ireland has thrown up an axe murderer of its very own. It bespeaks a kind of burgeoning cosmopolitanism.

He might have added that his deed, and the process of society's retribution for it, had also greatly increased his economic significance. For now, from being "a sponger, a slacker, a parasite, a leech on the nation's resources", he had become a major contributor to Gross Domestic Product. The cost of maintaining him in jail, added to the cost of catching and putting him inside in the first place, had ensured that he now figured much more prominently than most of his fellow citizens in the standard calculations relating to national "well being".

The story is fiction, but these logical implications are not a black fantasy. When the Central Bank or the ESRI predicts that GDP will increase by, say, 6 per cent in the coming 12 months, it is an ungainsayable fact that one of the things which would contribute to vindicating this prediction would be an increase in axe murders. Increases in other crimes, road accidents or drug addiction would have the same effect. This is because the conventional indicators used to describe economic reality have no moral basis.

This is not an accusation, simply a statement of fact. GNP and GDP indicators do not differentiate between good and bad, healthy and unhealthy, vice and virtue. They arrive at their conclusions on the basis of market transactions alone. As Prof John Clarke of St John's University, New York, told last week's social policy seminar organised by the Conference of Religious in Ireland (CORI), these indices operate by adding expenses to income, rather than subtracting them. They are therefore, as he said, oblivious to the difference between costs and benefits, losses and gains, and are thus deeply misleading as indicators of progress.

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Ah. What is this thing called progress? In Ireland, what we call "progress" is really just change. The figures and predictions with which we are bombarded are simply measurements of gross (sic) economic activity, which is all they were supposed to be in the first place. As Prof Clark noted, a nation, like a business, needs a total income statement, which is "precisely what GDP is".

The problem is that, for reasons which have much to do with ideology and vested interests, these ostensibly neutral forms of measuring the general scale of economic activity have been elevated to the status of scoreboard, employed to convey not just levels of exchange of money for goods and services but the overall well being of society.

THE everyday interchange of terms such as "growth" and "progress" signals where the true problem lies. Business interests, including media, have both motive and opportunity to promote GNP and GDP as the most important economic statistics. In truth, all such figures really tell us is the extent to which things have become different than before, regardless of whether the elements of change are virtuous or otherwise.

And in a society in which there is growing divergence between these figures and the reality of people's lives, it is arguable that what they actually measure is damage.

An alternative indicator, as suggested by CORI, to assess more accurately the quality of life in society, is overdue. The picture revealed by CORI's Social Progress Index (SPI), which shows that the rate of progress, measured in a range of areas outside the conventional economic arena, has been stagnant for the past 20 years, corresponds much more accurately to people's true feelings about our changing society.

While both GNP and GDP have grown at an average rate of about 3 per cent per annum, the Social Progress Index has shown only infinitesimal levels of improvement.

Of course, there are elements of absurdity in creating an alternative index. There are, too, real problems with attempting to arrive at formulae for calculating the genuine well being of society. For example, because the CORI index includes factors like infant mortality, which has decreased during the relevant period, and traffic accidents, which have increased, there is a sense of one being traded off against the other to arrive at a net finding.

What we condescendingly call "primitive" societies did not require such indices because, in the first place, their aspirations were based on needs rather than wants, and in the second place they had a thing called culture to tell them how they here doing. They knew what their values were and also the extent to which these values were being upheld.

WHAT we think of as culture, however, is for the most part something external to the community of our society, yet another commodity to be consumed by those who can afford it. Because we no longer have a common value system, our feelings, either individual or collective, are no longer reliable as a common instrument for measuring well being. We must rely on empirical, supposedly objective techniques of measurement, and we have to accept more or less at face value their regular assurances that we never had it so good.

It is inevitable then that techniques for measuring progress will avoid any consideration relating to values or morality. In a society so deeply divided as to its value system, it is not possible to agree on the relative weighting of a particular phenomenon, or even whether it is to be designated as good or bad.

For example, an increase in abortion figures - might be seen by some as evidence of moral decline, and by others as evidence of modernisation. Who decides? And according to last week's Department of Health figures, the consumption of alcohol in Ireland has matched the rise in GDP virtually pint for point during the period of the CORI index - is this to be interpreted as evidence of increased conviviality or of greater levels of desperation?

A happy and secure society would not need to reassure itself with graphs and statistics. It would be able to trust its feelings. In truth, you cannot measure happiness, love, pleasure, self esteem, fraternity, excitement, creativity, any more than pain, hunger, cold, malevolence, alienation, or fear.

But if all important decisions are made on the basis of existing flawed measures, there is an urgent need to combat their unassailable pre eminence with an index or indices with some kind of ethical basis. Above all, it is important to beware of economic indicators which, in claiming to depict common welfare, make no distinction between axe murderers and anaesthetists.