Archive for the ‘Anti-capitalism’ Category

GDP :Grossly Distorting Perception

June 13, 2007

This is an old article written way back in 2003 but is still relevant
and should be an enlightening read.The author mainly speaks about the American
Economy and the American way of life which our rulers are busy replicating
and worshiping.

Grossly Distorting Perception

Measure for measure, GDP is the world’s hidden accounting scandal, the one that neither governments nor media will touch. Jonathan Rowe asks why we worship such a false idol.
Date:01/02/2003 Author:Jonathan Rowe

Several months ago a professor at the University of North Carolina published research that turned beliefs about the economy upside down. Health improves, he said, as the economy shrinks. And as the economy declines, deaths, smoking, obesity, heavy drinking, heart disease and some kinds of back problems all decline as well.

‘Sounds unlikely’, said a New York Times correspondent. And indeed it is, at least by standard reckonings. We all know that an expanding economy makes us better off. Or do we? Another study, from the UK, found that shopping, which is the driving force of the entire economy and which is supposed to make people feel good, can actually make us depressed. ‘For significant numbers, dissatisfaction is now part of the shopping process,’ one of the authors wrote. (As though we needed a study to tell us that.)

What is going on here? How could we feel better when the experts say we should feel worse, and worse we should feel better? Could it be that economists have got it all wrong?

This is the world’s hidden accounting scandal, the one that neither the government nor the media will touch. It concerns the accounting for the entire economy, the way the government purports to determine whether things are getting better or worse. This accounting is called the Gross Domestic Product or GDP. It is central to the big policy debate in Washington and is the template for the policies the USA projects upon the world. The media regard it with a reverence bordering on awe. The Wall Street Journal recently called the GDP ‘the world’s most reliable economic indicator’.

Yet, like the books of Enron and Tyco economic accounting at governmental level is a sham. It portrays regress as progress, and misery as economic advance. If leaders are really looking for chief executives who cook the books, they might well take a look at their own accounts. They truly are a mess.

Adding nauseam

Imagine an accountant who can add but can’t subtract and who is so short-sighted he can’t see past his nose. That is the mentality behind the GDP. The GDP simply adds up the the amount of money that people spend and calls the result growth, which equals good, regardless of where the money went and why.

So the more medical bills you incur, the more junk food your kids eat, the more you sit in traffic and the more your credit-card company rips you off with hidden charges, the better the economy is doing.

At the same time GDP accounting ignores the implications of expenditures that at face value might suggest advance. Perhaps your neighbour loves her new Renault Clio. Perhaps she regards it as a step up in her life. Still, when she drives the thing, she pollutes the air and adds to pressures to put oil rigs near coastal beaches. She takes up more space on the road, contributing to traffic and causing everyone to burn more gas. Honest accounting would show such costs. The GDP ignores them.

Worse, it actually shows such costs as economic gains. All the petrol, the fender-benders, the medical bills arising from exposure to bad air get added to the GDP as evidence of the nation’s growth. Americans spend over $5 billion on petrol they burn while stuck in traffic, going nowhere. That’s $5bn more for the GDP. Cook the planet, cook the books and call the result growth.

It’s this kind of ridiculous accounting that enables governments to claim that action to address global warming would be bad for the economy. If you define regress as progress, then steps to take us forward look as though they would set us back. What’s more, while counting bads as goods, the GDP totally ignores the genuine goods that don’t cost money: the air we breathe; the care that parents and grandparents give their children; the games children play with one another; the quiet of the night. These are invisible in the national accounts.

Only when the economy destroys them and forces us to buy substitutes do the governmental accountants spring to life. Day care counts but mum-and-dad care doesn’t. Driving a car counts but walking does not. The reason is not that government bean-counters are incompetent or ethically challenged. Actually they are top notch. The problem is the antiquated system they are forced to use. It is so out of touch with reality it would be comic – if the consequences weren’t so grim.

Thriving on absurdity

The absurdities of all this have not gone entirely unnoticed. Economists and the media reflect upon them from time to time in a feet-on-the-desk kind of way. But they continue to use the GDP anyway. Watch the news the next time the Treasury releases the quarterly GDP figures. Is there a single reporter or economist who says: ‘Wait a minute. Does this accounting really say what people think it says?’

Not likely. Moreover, they never acknowledge how deep the phoney accounting runs. They might remark occasionally upon the unfortunate side-effects of consumption, what economists call externalities – for example, the way off-road vehicles pollute the air. But the consumption itself is always positive, another step up the mountain of more. ‘A nation is by definition thriving if its major indices [such as GDP] say people are making more things and spending more money on them,’ a writer in the New York Times opined not long ago. ‘By definition’ means there’s no need to observe actual experience and see if it is true.

Blind faith

Yet reporters are supposed to be observers, not theologians, and these talents are desperately needed with regard to the hoary postulates of economic thought. The problem today goes far deeper than externalities. Increasingly the problem is ‘internalities’, the supposed cornucopia itself. Is the economy really thriving when kids nag their parents for junk food or when credit-card companies rip off their customers with billions in hidden charges? Is it thriving when teen magazines induce a pathological body-consciousness in young girls to the benefit of the cosmetic and plastic surgery industries?

According to a recent test, six out of seven brands of ‘off-road’ vehicles are designed to incur major damage – worth over $1400 – from a crash at just five mph. That’s GDP for you.

But let’s face it. The problem is not just the economy. It’s also ourselves.

In the belief system called economics, we all are shrewd little integers of acquisition, who go through life with an unfailing calculus of benefit and gain. Since economists believe us all to be ‘rational’, the sum total of our buying must be the nation’s prosperity and good. That’s the belief embedded in the national accounting – more buying equals more happiness.

Leave aside for the moment the buying the economy thrusts upon us. Leave aside, too, whether it is really so rational to be obsessed with shopping to begin with. If we simply observe the life around us, what we see is – surprise – a lot of bad choices. We see people who seem in constant lament over the bad choices they have made.

Our book shops are full of titles for such people. Support groups proliferate for those who can’t stop eating, drinking, smoking, falling for the wrong people, spending money they don’t have. The pharmaceutical industry is marketing drugs for people who can’t stop shopping. And there are myriad counsellors waiting to counsel them.

Yet somehow, when the accountants put all of these bad decisions together, the result is supposed to be prosperity and growth. And when people start to get control of their lives – when they toss the gin down the toilet, put the credit cards in the freezer and timers on their telephones – we hear dire warnings of a drop in ‘consumer confidence’ and a ‘sluggish’ GDP.

Rejecting the hype

For a McDonald’s, an Exxon or a General Motors, GDP is of great comfort. It turns obesity and pollution into economic advance, and the perpetrators of these into the heroes of the script. Politicians also like the accounting. It enables them to say that in helping their campaign contributors they are actually helping humankind. Oil drilling in wilderness areas is not a plum for the oil industry, they say. Rather, it’s a boost for the GDP.

For the media, meanwhile, the GDP provides a way to turn a complex story into a simple number, one that comes weighted with a combination of government authority and an economists’ expertise. It enables reporters to pontificate about the economies of entire countries without the need to leave their desks. And the fact that the GDP aligns economic reporting with the interests of advertisers doesn’t hurt either.

These mental grooves are deep, and they are set in concrete. They are not likely to change any time soon. But that does not mean we have to follow along. The first step to change is to withdraw our consent. The next time we hear the solemn voices on the BBC talk about the GDP and ‘growth’, we can just chuckle at how out of it they are. As the exposés of corporate corruption have shown to the great pain of many in the USA, phoney accounting can’t cover up reality forever.

Jonathan Rowe is director of the Tomales Bay Institute, California, and a contributing editor of The Washington Monthly. Enough! is a publication of the Center for a New American Dream.

BOX: Isn’t GDP Wonderful?

There are few human misfortunes that do not have a silver lining where the economic mind is concerned. The result is a strange take on the world that permeates the mainstream media yet goes almost entirely unnoted.

• Teenage girls prone to pathological body-consciousness, egged on by images of physical ‘perfection’ that barrage them in teen magazines, have helped create a teen cosmetic industry worth almost $25bn annually.

• Americans owe over $7 trillion in household debt, used to make purchases that boost the GDP. And in a curious twist, the debt interest payments add $100 billion more.

• For the purchases they don’t really need or use, there is the burgeoning self-storage industry and garage extensions on suburban homes to hold the stuff. The accoutrements alone – shelves etc – are expected to become a $650mn business, according to the Wall Street Journal.

• Growth development problems, otherwise known as erectile dysfunction or impotence, is on the increase, which is excellent news for manufacturers of Viagra – in itself a $1.5bn industry in the USA.

• Over 500,000 Americans contribute to the US GDP with purchases made on stolen credit cards. Add to this identity theft insurance which costs over $100 a year per person.

• Economists love web pornography since it adds some $2bn to America’s GDP.

• Gambling is another affliction that contributes impressively to the US GDP – by some $63.3bn a year.

• GDP also thrives on noise pollution – sound-proofing insulation for an apartment ceiling costs about $400. And the 5.2m American children who have damaged hearing from listening to their headphones too loud are an investment in the GDP as later in life many will require treatments and hearing aids.

• More than half of Americans are overweight. Yippeee! Direct medical costs from diabetes alone add some $44bn to the GDP. And over 50,000 Americans had their stomachs stapled last year at a cost of around $20,000 each.

• Manufacturers of soft drinks are targeting children with hyper-caffeinated sodas, with names like Jolt and Code Red. And to calm them down? Easy. Americans spend $758m on the drug Ritalin. GDP heaven – self-perpetuating supply and demand.

• Approximately one-fifth of America’s food goes to waste, and that’s not counting the vast amount that ends up as flab. This adds about $31bn to the GDP, a figure which could feed those who die of starvation each year twice over.

• American motorists sitting in traffic jams spend over $5bn a year on petrol. In Los Angeles alone the figure is close to $1bn. Note, coincidentally, that Los Angeles also leads the nation in the number of hospital admissions for respiratory problems – more medical costs, higher GDP.

• Depressed – excellent. Over seven million Americans take anti-depressants. Prozac alone has generated over $2.5bn a year. Even better, when the Grim Reaper finally arrives, the typical American funeral costs over $5,000, not counting the price of the cemetery and monument.

The ecologist

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Anti-Capitalism In Five Minutes Or Less

May 12, 2007

Anti-Capitalism In Five Minutes Or Less

By Robert Jensen

09 April, 2007
Countercurrents.org

We know that capitalism is not just the most sensible way to organize an economy but is now the only possible way to organize an economy. We know that dissenters to this conventional wisdom can, and should, be ignored. There’s no longer even any need to persecute such heretics; they are obviously irrelevant.

How do we know all this? Because we are told so, relentlessly — typically by those who have the most to gain from such a claim, most notably those in the business world and their functionaries and apologists in the schools, universities, mass media, and mainstream politics. Capitalism is not a choice, but rather simply is, like a state of nature. Maybe not like a state of nature, but the state of nature. To contest capitalism these days is like arguing against the air that we breathe. Arguing against capitalism, we’re told, is simply crazy.

We are told, over and over, that capitalism is not just the system we have, but the only system we can ever have. Yet for many, something nags at us about such a claim. Could this really be the only option? We’re told we shouldn’t even think about such things. But we can’t help thinking — is this really the “end of history,” in the sense that big thinkers have used that phrase to signal the final victory of global capitalism? If this is the end of history in that sense, we wonder, can the actual end of the planet far behind?

We wonder, we fret, and these thoughts nag at us — for good reason. Capitalism — or, more accurately, the predatory corporate capitalism that defines and dominates our lives — will be our death if we don’t escape it. Crucial to progressive politics is finding the language to articulate that reality, not in outdated dogma that alienates but in plain language that resonates with people. We should be searching for ways to explain to co-workers in water-cooler conversations — radical politics in five minutes or less — why we must abandon predatory corporate capitalism. If we don’t, we may well be facing the end times, and such an end will bring rupture not rapture.

Here’s my shot at the language for this argument.

Capitalism is admittedly an incredibly productive system that has created a flood of goods unlike anything the world has ever seen. It also is a system that is fundamentally (1) inhuman, (2) anti-democratic, and (3) unsustainable. Capitalism has given those of us in the First World lots of stuff (most of it of marginal or questionable value) in exchange for our souls, our hope for progressive politics, and the possibility of a decent future for children.

In short, either we change or we die — spiritually, politically, literally.

1. Capitalism is inhuman

There is a theory behind contemporary capitalism. We’re told that because we are greedy, self-interested animals, an economic system must reward greedy, self-interested behavior if we are to thrive economically.

Are we greedy and self-interested? Of course. At least I am, sometimes. But we also just as obviously are capable of compassion and selflessness. We certainly can act competitively and aggressively, but we also have the capacity for solidarity and cooperation. In short, human nature is wide-ranging. Our actions are certainly rooted in our nature, but all we really know about that nature is that it is widely variable. In situations where compassion and solidarity are the norm, we tend to act that way. In situations where competitiveness and aggression are rewarded, most people tend toward such behavior.

Why is it that we must choose an economic system that undermines the most decent aspects of our nature and strengthens the most inhuman? Because, we’re told, that’s just the way people are. What evidence is there of that? Look around, we’re told, at how people behave. Everywhere we look, we see greed and the pursuit of self-interest. So, the proof that these greedy, self-interested aspects of our nature are dominant is that, when forced into a system that rewards greed and self-interested behavior, people often act that way. Doesn’t that seem just a bit circular?

2. Capitalism is anti-democratic

This one is easy. Capitalism is a wealth-concentrating system. If you concentrate wealth in a society, you concentrate power. Is there any historical example to the contrary?

For all the trappings of formal democracy in the contemporary United States, everyone understands that the wealthy dictates the basic outlines of the public policies that are acceptable to the vast majority of elected officials. People can and do resist, and an occasional politician joins the fight, but such resistance takes extraordinary effort. Those who resist win victories, some of them inspiring, but to date concentrated wealth continues to dominate. Is this any way to run a democracy?

If we understand democracy as a system that gives ordinary people a meaningful way to participate in the formation of public policy, rather than just a role in ratifying decisions made by the powerful, then it’s clear that capitalism and democracy are mutually exclusive.

Let’s make this concrete. In our system, we believe that regular elections with the one-person/one-vote rule, along with protections for freedom of speech and association, guarantee political equality. When I go to the polls, I have one vote. When Bill Gates goes the polls, he has one vote. Bill and I both can speak freely and associate with others for political purposes. Therefore, as equal citizens in our fine democracy, Bill and I have equal opportunities for political power. Right?

3. Capitalism is unsustainable

This one is even easier. Capitalism is a system based on the idea of unlimited growth. The last time I checked, this is a finite planet. There are only two ways out of this one. Perhaps we will be hopping to a new planet soon. Or perhaps, because we need to figure out ways to cope with these physical limits, we will invent ever-more complex technologies to transcend those limits.

Both those positions are equally delusional. Delusions may bring temporary comfort, but they don’t solve problems. They tend, in fact, to cause more problems. Those problems seem to be piling up.

Capitalism is not, of course, the only unsustainable system that humans have devised, but it is the most obviously unsustainable system, and it’s the one in which we are stuck. It’s the one that we are told is inevitable and natural, like the air.

A tale of two acronyms: TGIF and TINA

Former British Prime Minister Margaret Thatcher’s famous response to a question about challenges to capitalism was TINA — There Is No Alternative. If there is no alternative, anyone who questions capitalism is crazy.

Here’s another, more common, acronym about life under a predatory corporate capitalism: TGIF — Thank God It’s Friday. It’s a phrase that communicates a sad reality for many working in this economy — the jobs we do are not rewarding, not enjoyable, and fundamentally not worth doing. We do them to survive. Then on Friday we go out and get drunk to forget about that reality, hoping we can find something during the weekend that makes it possible on Monday to, in the words of one songwriter, “get up and do it again.”

Remember, an economic system doesn’t just produce goods. It produces people as well. Our experience of work shapes us. Our experience of consuming those goods shapes us. Increasingly, we are a nation of unhappy people consuming miles of aisles of cheap consumer goods, hoping to dull the pain of unfulfilling work. Is this who we want to be?

We’re told TINA in a TGIF world. Doesn’t that seem a bit strange? Is there really no alternative to such a world? Of course there is. Anything that is the product of human choices can be chosen differently. We don’t need to spell out a new system in all its specifics to realize there always are alternatives. We can encourage the existing institutions that provide a site of resistance (such as labor unions) while we experiment with new forms (such as local cooperatives). But the first step is calling out the system for what it is, without guarantees of what’s to come.

Home and abroad

In the First World, we struggle with this alienation and fear. We often don’t like the values of the world around us; we often don’t like the people we’ve become; we often are afraid of what’s to come of us. But in the First World, most of us eat regularly. That’s not the case everywhere. Let’s focus not only on the conditions we face within a predatory corporate capitalist system, living in the most affluent country in the history of the world, but also put this in a global context.

Half the world’s population lives on less than $2 a day. That’s more than 3 billion people. Just over half of the population of sub-Saharan Africa lives on less than $1 a day. That’s more than 300 million people.

How about one more statistic: About 500 children in Africa die from poverty-related diseases, and the majority of those deaths could be averted with simple medicines or insecticide-treated nets. That’s 500 children — not every year, or every month or every week. That’s not 500 children every day. Poverty-related diseases claim the lives of 500 children an hour in Africa.

When we try to hold onto our humanity, statistics like that can make us crazy. But don’t get any crazy ideas about changing this system. Remember TINA: There is no alternative to predatory corporate capitalism.

TGILS: Thank God It’s Last Sunday

We have been gathering on Last Sunday precisely to be crazy together. We’ve come together to give voice to things that we know and feel, even when the dominant culture tells us that to believe and feel such things is crazy. Maybe everyone here is a little crazy. So, let’s make sure we’re being realistic. It’s important to be realistic.

One of the common responses I hear when I critique capitalism is, “Well, that may all be true, but we have to be realistic and do what’s possible.” By that logic, to be realistic is to accept a system that is inhuman, anti-democratic, and unsustainable. To be realistic we are told we must capitulate to a system that steals our souls, enslaves us to concentrated power, and will someday destroy the planet.

But rejecting and resisting a predatory corporate capitalism is not crazy. It is an eminently sane position. Holding onto our humanity is not crazy. Defending democracy is not crazy. And struggling for a sustainable future is not crazy.

What is truly crazy is falling for the con that an inhuman, anti-democratic, and unsustainable system — one that leaves half the world’s people in abject poverty — is all that there is, all that there ever can be, all that there ever will be.

If that were true, then soon there will be nothing left, for anyone.

I do not believe it is realistic to accept such a fate. If that’s being realistic, I’ll take crazy any day of the week, every Sunday of the month.

Robert Jensen is a journalism professor at the University of Texas at Austin and board member of the Third Coast Activist Resource Center http://thirdcoastactivist.org . His latest book is Getting Off: Pornography and the End of Masculinity (South End Press, 2007). Jensen is also the author of The Heart of Whiteness: Race, Racism, and White Privilege and Citizens of the Empire: The Struggle to Claim Our Humanity (both from City Lights Books); and Writing Dissent: Taking Radical Ideas from the Margins to the Mainstream (Peter Lang). He can be reached at rjensen@uts.cc.utexas.edu. His articles can be found online at http://uts.cc.utexas.edu/~rjensen/index.html