In the spirit of the other “culturally-focused” posts recently, I was going to post a section from Arne Naess’ book “Ecology, community, and lifestyle” on the topic of Gross National Product (GNP), and the flaws inherent that concept.

However, it’s a long section.  Instead, I highly recommend that everyone read that entire book.  It’s great from a variety of perspectives.

Allow me, instead, to sum up the main points.  These come from pages 110-120 of the book.

First I should note that the United States stopped using GNP as a main indicator of economic health in 1992.  We now use GDP (Gross Domestic Product) and other measures.  As we’ll see, though, the new measures are just as suspect as the old.

Naess’ first point is one that any “counter-culture” seeking to change established policies needs to make economic arguments to validate its claims.

Our world is now based on economics.  Making claims like “the economic policies we disagree with should go away” is like telling the warden of the jail you’re in that he should simply unlock your cell and walk away.

1. Production is making real objects by means of other real objects.

This point is especially interesting in light of the “internet economy” and stock market-based indicators of fiscal health.  Neither of those things are “real objects made by means of other real objects.”  They are conceptual entities based on agreed-upon rules.  They’re games, not products.

2. GNP + imports = consumption + gross investment + increase of stocks + exports

Naess points out that “good stands for the value of all goods and services which are used as production factors.”

3. The history of GNP

GNP really came about after WWII when many nations were trying to rebuild their economies, and people needed an agreed-upon method of measuring “progress.”  The problem is that growth far outstripped the way GNP had been designed to measure things, and quickly became vacuous.

4. GNP is value-neutral

“The GNP does not give any guarantee of the meaningfulness of that which is created.”

This is probably the biggest reason why GNP does not correlate with quality of life measures.

5. GNP is “Gross National Product”

The term “gross” means the full distribution, regardless of degree.  To paraphrase Naess – if 95% of the people live in abject poverty, and 5% live in extreme opulence, the GNP shows everyone as having the same standard of living.

6. GNP demands consumption

Naess’ next point goes to the point I made in my last post.  First, any self-reliance necessarily reflects a decrease in GNP.  Eat at home more, lower GNP.  Roll your own cigarettes, lower GNP.  Etc.

The second point here, though, is very important.  That any advertising or campaign that decreases consumption is contrary to GNP.  To use the example Naess uses – a vigorous anti-smoking campaign will result in fewer people buying cigarettes.  Which will decrease GNP.

7. GNP favors “hard and long” technology

GNP tends to favor concentrated areas of industry/industrialization, which require transportation costs as well.  Transportation becomes part of GNP, which increases its overall value.  The more products need to be transported, the greater the GNP becomes.

GNP, therefore, disfavors “soft and near” technology, or distribution methods.

7. “GNP growth favours wants, not needs”

“In GNP there is no place for distinction between waste, luxury, and a satisfaction of fundamental needs.”

Economic growth does not reflect the satisfaction of basic needs.  It is not designed to fulfill basic needs.  It is designed to fulfill its own ends (or the ends of the people holding the levers).

The outcomes of all of these points are that:

“GNP growth supports irresponsible and unsolidaric resource consumption and global pollution.”

Now, as compared to GNP, which is defined as “the value of all goods and services produced in a country in one year, plus income earned by its citizens abroad, minus income earned by foreigners in the country,” GDP is defined as “is the market value of all final goods and services made within the borders of a country in a year” 0r, the equation – GDP = private consumption + gross investment + government spending + (exports − imports).

The difference is the inclusion of money made/invested from abroad in GNP, which is not included in GDP.  You can probably see what little difference that distinction makes, based on Naess’ points above.  Production (as production-in-itself, value-less) reigns supreme in either measure, and results in the same mitigation of measures of health, happiness, or meaning in a society.