Robert Kennedy was eloquent on the limitations of GNP as a measure. But money does make the world go round.

12 January, 2015

Below is a quote from Bobby Kennedy on what Gross National Product means and what it does not mean. 

“Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product … if we should judge America by that – counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.

“Yet the gross national product 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 or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”

Fantastic rhetoric, for sure, equal to anything JFK (or his speechwriter) ever produced.

But to add a corrective balance to RFK’s outpouring, look at what Eduardo Porter, in “The Price of Everything“, has to say.  If you are a romantic type, look away now.

Porter quotes Kennedy but goes on to add:

“Yet despite its growing popularity, the belief that money has little or nothing to do with happiness is misleading. Like Schopenhauer’s musings and Mariana’s troubles, the sweeping rhetoric about the emptiness of material wealth supports a dubious proposition that the pursuit of economic progress is somehow a waste of time because it does not deliver what is most important in life. Despite the scepticism about run-of-the-mill economic growth, despite the angry denunciations of materialism, it is usually better to have a big gross domestic product than a small one. Just ask one of the more than 3 billion people – half the world’s population – how happy they are making do with less than $2.50 a day.

In fact, surveys find that richer people tend to be happier than poorer people. That’s because money provides many of the things that improve people’s lot. Richer countries are generally healthier and have lower child mortality and higher life expectancy. They tend to have cleaner environments, and their citizens often have more education and less physically demanding and more interesting jobs.  Richer people usually have more leisure time, travel more, and have more money to enjoy the arts. Money helps people overcome constraints and take control over their lives.  Whatever Kennedy said, gross national product does allow for the health of our kids.

Researchers in Britain found that an extra 125,000 a year increased people’s sense of satisfaction with their lives by one point on a scale of one to seven. A study in Australia pored through surveys to understand how people’s feelings of happiness responded to life’s events. It found that a windfall of $16,500 to $24,500 provided more or less the same boost to happiness as getting married.”

And that’s presumably Australian Dollars.  So getting married is only worth €15,000 in happiness terms. Clearly something wrong with that analysis!

 

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