To rid ourselves of GDP we need to move beyond capitalism, to ANOTHER NOW – Response to Timothée Parrique’s response

In a reaction to a throwaway line of mine in this interview relating to my new book ANOTHER NOW, Timothée Parrique wrote this piece. I find it hard to disagree with anything of substance he wrote. I was not even upset that Timothée (who clearly has not read my book) misrepresented my position, making me sound as if supportive/tolerant of GDP-growth as a reasonable goal (I am not and it isn’t!). Why? Because it is clear to me that this is a matter of semantics focussed on one word: degrowth. Let me clear on this: I loathe the word, not the criticism of GDP-growth that it represents. It is, in my considered opinion, a major own goal to enter the arena against powerful opponents with a campaign to de-anything.

So, let me be clear: Any society that seeks more GDP (that is, every capitalist society) is in serious trouble at all levels – economic, social, environmental, ethical. Having said that, when living under capitalism (a system predicated on profit maximisation at the level of the firm and GDP-maximisation at the level of the macroeconomy), replacing GDP with some other metric is besides the point. If we do not like the effects of GDP-growth (and I certainly don’t) then the only feasible solution is the replacement of the capitalist mode of production and distribution with something else. What that ‘something else’ should be is, of course, the pertinent question.

It was in an attempt to answer this question, from a very personal perspective, I wrote ANOTHER NOW as a book of science fiction, in which I describe an alternative postcapitalist present. Funnily enough (for the purposes of this exchange), there is a passage alluding to how GDP was ‘grossly demoted’ in that socioeconomic system. I copy it below for your amusement. Please note that, as a work of fiction, this is not me speaking but Eva – a neoliberal economics professor who is gradually warming up to the postcapitalist system in ANOTHER NOW.

Hope you enjoy it!

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EXTRACT from Chapter 6 (Markets without Capitalism) of ANOTHER NOW: Dispatches from an alternative present

GROSSLY DEMOTED GDP

“It counts special locks for our doors and the jails for the people who break them… It counts napalm and nuclear warheads and armoured cars for the police to fight the riots in our cities… Yet [it] does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry… It measures everything, in short, except that which makes life worthwhile.”

Bobby Kennedy’s famous condemnation of GDP, the dollar metric of a nation’s total income, had always irritated Eva despite its obvious poetic quality – or perhaps because of it. During her time as a post-grad in economics at the end of the noughties, GDP-bashing had become something of a cottage industry. Eva thought it was akin to lambasting a maritime navigation device for failing to appreciate the beauty of the ocean and its impact on the human psyche.

“Of course GDP rises when a terrible earthquake kills thousands,” she would argue with the students in her seminars. “That’s what it is meant to do: count the monetary expense of the rescue efforts at first and the cost of rebuilding later. And of course its needle does not move when a lover’s gesture uplifts one’s soul or a bush fire consumes a lush forest. The very point of GDP is not to condone the earthquake or to make us indifferent to intangible beauty or environmental disaster. It is to measure that which it was designed to measure: money expenditures by some that add, equivalently, to the incomes of others.”

Monetary profit drives capitalism. Under capitalism, like it or not, society’s resources are attracted by the anticipation of higher profit and repelled by anything that reduces the bottom line. Eva’s view was that GDP is a snapshot of these forces at work – a highly effective one that does not purport to be anything more or less.

“It seeks to capture capitalism’s dynamic and to map out the types of endeavour that generate money – ‘the alienated essence of our life’, as I believe your much-beloved Karl Marx once put it. To dump GDP and replace it with an arbitrary measure of something … nicer would be to take our finger off capitalism’s pulse – to ditch our only means of gauging the beast’s behaviour.”

Every time an environmentalist demanded a new, cuddlier metric with which to replace GDP, Eva despaired.

“If we want to protect trees or lakes that have no market price,” she argued, “we should just do it: slap preservation orders on them! What is the point of concocting an arbitrary price substitute by which to measure their intangible value?”

The irony is, Eva thought to herself, that these hip anti-capitalists are their own worst enemy: under capitalism, the only way a tree or a lake can be assigned a quantifiable value is by putting it up for sale to see what price it fetches. In the absence of any alternative to capitalism, Eva used to tell her students, we need to stop criticising GDP and instead invest in immeasurable public goods, like the health of our children or the beauty of their poetry.

At least, that was Eva’s view when, like almost everyone else, she believed there really was no alternative to capitalism. In the light of the latest dispatches, she was starting to re-assess.

On the one hand, markets in the Other Now appeared to be in rude health despite, or maybe because of, capitalism’s demise. A great deal of economic activity the Other Now could still be measured in terms of monetary incomes. On the other hand, much of private sector activity was driven neither by net revenue maximisation nor by market forces but by instruments such as the socialworthiness index, which played a large role in diverting resources to various activities. Compiled by customers, neighbours, artists, the community at large, it was a number with an impact on economic activity that reflected neither a price nor a quantity supplied. Or take, for example, the juries’ power to dissolve enterprises for failing the public interest. Those too created strong incentives for corporations to diverge from business plans that maximised profits. Freed from the tyranny of their share price, meanwhile, and the fear of hostile takeovers, corporations were more alive to society’s needs. So too with the County Associations, whose members allocated land for the benefit of local communities. While they exploited market forces to generate funding for social purposes, their decisions were uninfluenced by the prices generated by capitalist real estate markets.

Once capitalism died, and markets were freed from private ownership, a different kind of value had taken over. Instead of judging something’s worth by its ‘exchange value’, what it would fetch in return for something else, the Other Now judged worth according to its ‘experiential value’, what is worth in itself to the person who used it. Prices, quantities and monetary profits were no longer the sole masters of society. And the more experiential value liberated itself from the hegemony of exchange value, the less meaningful or relevant GDP could be. And so it was in the Other Now. Although it continued to play a role in measuring monetary incomes, GDP was simply one of many metrics they used to monitor the economy – a demotion that would have made no sense before capitalism died.