Avvenire - 11/06/2010

The abuse of the "gross domestic product" reveals the alienating essence of capitalism. An antidote? The teachings of the Gospel. Geminello Alvi´s provocations raise debate

But salvation does not come from the GDP

By Andrea Galli
Published in Avvenire on 11/06/2010

"For years, any kind of universal happiness was made to depend on newspapers and the consensus of economists, on the nasal and muttering voice of Greenspan, while he dissertated on tenths of percents of GDP. But last year, this insistent relishing ended up as we know: with a collapse of the GDP which brought the world back into a Depression, as never experienced since the 1930s". This is how Geminello Alvi opens his presentation in the latest issue of Equilibri, a journal in favor of sustainable development, published quarterly by Mulino and dedicated to a topic that has come back in the last few years and is accomplice to the crisis. The question? Whether the Gross Domestic Product - the most successful economic political indicator from post-World War II to today and whose strength of coercion on global economic politics remains crushing - is adequate or not. Just nine months ago, the "Commission on the Measurement of Economic Performance and Social Progress", coordinated by Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi, handed over its report to Nicolas sarkosy. This was one the most explicit acts towards finding different evaluation parameters of the economic status of countries and societies - parameters that are, at the same time, capable of offering a way out of the "religion of the number", as the French president has called it.
Alvi, economist and essayist, noted for his non-conventional scholarship and analyses, does not conceal negative judgement on the abuse that is made of the GDP today and neither does he hide the pessimism over the research for substitute indexes that canvass "happiness" spread or perceived by populations, "value schemes still abstract and aberrant". For measuring indexes and for the economy itself, "happiness" is still an unreachable dimension. "According to the Gospel," says Alvi, "being better is being healed. According to economy (being better is) a measurement of increased pleasure. Economy is made to make men always more blessed, but the soul that deals with it and is cared for by it is not he who competes for the condition of happiness...modern economy wants more than to feed or clothe. It promises life in always more complete degrees, if one is only able to acquire it. Comunism disowns the idea of acquisition, but it is not less persuaded by this promise of life that, on the contrary, calls on the State to find balance. China´s successes depend exactly on an aberrant perception of happiness, reduced to utilitarianism in its social, collectivistic varient." According to Alvi, if a critique should be made, it is not so much one on the GDP itself - which remains inadequate and abused but not useless in its book-keeping properties. Rather, he criticizes the dark heart of the capitalistic processes that the Gross Domestic Product covers and nourishes. "Through the success of these thoughts, the ideological and inappropriate use of the GDP becomes revealer of something very different. It reveals capitalism in its always hushed and, yes, truly alienating, essence. Capitalism needs growth not only to pay capital with profits. Obsession with growth depends on the fact that all that is false and wicked, if known, diminishes. That is why there is this urgency to renew (capitalism) in an endless, infinite, loop. If what is bad is known, it diminishes, if what is good is known, it grows. Little is needed to make good things grow, and neither more or less is needed for the GDP."

Mgsr. Giampaolo Crepaldi, Bishop of Trieste and already the Secretary of the Pontifical Council of Justice and Peace, glossed over Alvi´s judgement. "I think that capitalism understood in this way is capitalism as an ideology, or as metaphysics, the metaphysics of utilitarian satisfaction of desires," he said. "However, economics is not automatically this kind of capitalism. And growth would be a good, if it is understood as increase in man´s capacity to produce better, to organize work in a better way so as to reduce costs - not only economic costs but especially human and social ones - to collaborate with one another to respond to the authentic needs of humanity". The Bishop, also president of the "Cardinal Van Thuan" International Observatory of the Social Doctrine of the Church, continued, "Growth is not something bad in itself. However, I´ve noticed that in this period of time, strong critiques of capitalism are arising again (right now Alvi is trying this, but Böckenförde had done the same). It seems to me that they still run the risk of understanding it, if you allow me to say this word, in an "ontological" way, while the Social Doctrine of the Church (as John Paul II said in Centesimus Annus) invites one to distinguish between capitalism as an economic system and capitalism as an ideology".

Instead, Luigino Bruni, professor of Political Economy at the University of Milano-Bicocca, disagrees with the uselessness of dedicating oneself scientifically to the relationship between economy and happiness. In the last few years, Bruni with others has relaunched this line of research. "The concept of happiness applied to economy arose in our country. When the English were speaking of the Wealth of Nations at the end of the 1700s, Italian economists were speaking of public happiness, a vision of communitarian, Latin and Catholic inspiration. They were aware that looking only at the "wealth of nations", neglecting other variables, would make it impossible to understand if higher well-being corresponded to economic growth, in a literal sense. An objective indicator anchored to the production of goods and services, as is the GDP, will always be important. It simply has shown itself to be a parameter that is more adapt to developing societies, where economic growth was tightly correlated to growth in freedom and of individual rights. The problem is that which Luigi Einaudi called the critical point. It is a threshold beyond which what was "good" before, as with growth, produces negative collateral effects that previously did not exist. The GDP must go hand-in-hand with other indexes that are complementary, like environmental impact, indicators of social capital or quality of life, which already exist, or indexes of human development, having arisen from the work of economists like Amartya Sen in the 80s and 90s".

Crepaldi adds, "One can say of the GDP what the Social Doctrine of the Church said about profit. It is an index of how well the economy is going, but it´s not the only one. I mean that, if taken alone, it doesn´t work even from an economic point of view. It isn´t a completely reliable indicator. If I think of when I am in the car, stopped in front of a stoplight and am consuming gas, the GDP of my country rises. I understand that, yes, it is an element, but not the only one. That speculation which caused a fall in GDP had previously made it rise". And for Crepaldi, hidden dangers also conceal themselves in complementary indexes. "We need to pay attention to the variables that we introduce to complete the GDP, or better, to free it from only quantitative characteristics. I remember when," he said, "already years ago, the United Nations Programme for Development substituted the ´Index of Development´ with the ´Index of Human Development´. We all applauded the change. It considered the index of development of peoples not only in terms of GDP but also keeping in mind qualitative indexes like infant mortality rate, access to drinkable water, medical treatments and education. It was a very important step ahead. It truly was. But, then, within the topic of "gender equality", which first measured the degree of empowerment of women in respects to the society, the ´ideology of gender´ and ´reproductive health´was insinuated. These cannot be considered as elements of human development according to the Social Doctrine of the church. The main topic is again ethical, or better, anthropological, and the economy still takes refuge from this."

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