Change in Order to Grow

Comments - Beyond the GNP, with civil capitals

By Luigino Bruni

Published in Avvenire on 29/04/2012

logo_avvenireMario Draghi has also launched an appeal for a «pact for growthAngela Merkel is also becoming convinced that it’s a matter of necessity. It is becoming increasingly clear to many – and thank goodness, also to many influential people – that to base ourselves solely on the «fiscal pact» is not only too little, but runs the risk of further deteriorating the economic situation of the more fragile European nations. Growth, therefore: but growth of what? Without embracing the radical thesis, and at times naive (above all, in the  therapies that it proposes) of the so called de-growth, we need to be aware that the most important question on growth is really «of what?». When we think of growth, we normally think of growth in GNP.

And we error, because, even if we never say it, this crisis was also generated by a mistaken growth in the GNP. In these last decades, in fact, the GNP has grown too much and badly, since it grew – and grows – at the cost of the natural, social, relational and spiritual environment, augmenting the hypertrophy of speculative financing. In Italy and in Europe in crisis, the GNP has since grown thanks to an abnormal growth in the public debt  - it is too comfortable and irresponsible to make the GNP grow by increasing the cost of public administration.

Today we have no guarantee that re-launching our GNP means also to increase the number of jobs and the wellbeing of people, since if the growth would continue to be guided and drugged by financial speculation, and therefore by income, the life of Italians would certainly continue to worsen even with a few extra points in our GNP. As we know it today, the GNP is not an indicator of human wellbeing in general (and this we know), but neither is it a good indicator of economic wellbeing in the era of finance (and this is less known).  If we want to measure the good growth well, we need to reform the GNP and, above all, to compare it to other indicators, which however – and this is the point – need to be indicators of stocks and not of flows (as is the GNP).

In what sense? The concept of «Gross National Product» was born in the 1700s in France (with Physiocratics), with the genial and revolutionary intuition that the economic strength of a nation does not measure its capitals or stocks but the annual income (therefore a flow), since a nation is not rich because it has mines, oil and forests, but only if it is capable of putting these capitals «into income», which depends on many factors (persons, technology, culture…). And from there we arrived to the 1900s and the birth of the GNP, continuing to think that for the wealth of nations, the flows and stocks are what count. However, today that beautiful ancient idea risks being misleading. 

Even though wanting to leave its value to an indicator of flow (a new GNP), it is more urgent that the stocks and capitals return to occupy the core of the economic, social, and political scenario.  The environmental theme, but also the relational and social ones – dramatically central – are formed by stocks and not by flows, capitals accumulated throughout millennia (or millions of years, in the case of the environment), that today the race to increase income flows is damaging and deteriorating. 

If we want and we must re-launch growth, then we have to concentrate on the growth and the maintenance of these forms of capitals: if they were not strengthened, maintained and in many cases recreated, the economic flows would not start up again; or, even if they were to start up because drugged by the finance market or European funds, they would continue to fuel the crisis of our time.

It would be enough to think of the impoverishment of those ancient civil capitals that are called neighbourhood relationships, or of proximity, and of that “productive correlation” of territories that until recent times have generated the many experiences of cooperation and of industrial districts of “Made in Italy.” The deterioration of these capitals is determining the progressive sterility of our civil fabric, which is not able to generate other flows, nor cultural, nor spiritual or economic. 

In order to be able to rebuild, and soon, these indispensable capitals, we first need to know how to see them, and then perhaps to measure them, giving life to new measuring tools of stocks or, better yet, of patrimony, a word that better denotes because, if meant as patrum-munus, that is, the gift of the fathers, it symbolically reminds us that we have received these patrimonies as a gift from passed generations, and therefore we have to protect and develop them, if we do not want to be remembered as the first ungrateful generation in history, the one that broke the big chain of inter-temporal solidarity.

And we cannot allow ourselves this, in order to today re-launch the good economic growth.

All of Luigino Bruni's comments on Avvenire can be found under Avvenire Editorial.

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