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Economic Alternatives

No ecosystems, no hopeAlternative Economic Measures
Related section>> Follow the Money & Economic Measures

Our society places tremendous importance on a healthy, growing economy. Somehow the assumption is made that a healthy economy equals a healthy community, that a country's economic growth means increased happiness and wealth for its citizens. But many of us know that the amount of money moving through our country's economic systems says very little about the health and wealth of citizens. We need alternative economic measures that reward positive growth while taxing growth that is harmful.

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What gets measured, what doesn't?
The usual Economic Measures have no way of measuring how money is distributed within a country nor how economic activity contributes to production and services that are healthy for society and the environment. If we look at economic growth without looking at the costs of this growth, we leave many people out of our economy and we create havoc for the earth. Reducing the economy to a simple money equation means missing out on many opportunities to care for ourselves, each other, and the earth.

Aboriginal mother with FAS childWe all make many decisions a day, some more important and having greater implications than others. We choose how to respond to our arguing children, which jobs to apply for, what foods to buy, whom to love, whether or not to make large purchases like a washing machine, and where to live. We also choose whether to walk or take the bus, whether to buy that sweater or not, to eat at a restaurant or at home. Our lives are full of decisions. But how do we make decisions? For most of us, the biggest decisions of our life, like choosing relationships, are not made according to money. If we were asked to name the most important aspects of our lives, those at the top of the list are more likely to be relationships, experiences, and opportunities, rather than our savings accounts and RRSPs.

Rather than a simple mathematical equation of GDP, our economy needs a set of measures that includes financial cost as well as other kinds of costs, such as costs to the environment, costs to ourselves, costs to society. And we need a system that allows us to measure the things that are truly valuable in life: happiness, health, community, and life. (See Rae's story.)

Time use surveys

Feminist economist Marilyn Waring suggests that instead of charting the flow of money, time-use surveys should be the starting-point for analyzing our society. For example, Waring points out that research done by Status of Women Canada shows that 2/3 of primary health care in Canada takes place in the home. This leads her to ask why 2/3 of the primary health care budget is not directed to the home.

Since 1996 time-use surveys have been a part of the Canadian census. A percentage of respondents are asked to fill out detailed forms noting all their activity in a given week. This means that governmental officials, statisticians, and policy-makers know how much time is spent on unpaid work in Canada. Using different methods, they can also calculate the monetary value of that unpaid work which turns out to be between 30.6% and 41.4% of the GDP - no small amount. The spread of almost 12% between the two numbers is a result of the two different valuation methods used. Replacement value is calculated on the basis of how much it would cost to replace unpaid workers with paid workers based on current hourly wages for comparable work. In Canada in 1992 this was $284.9 billion. Opportunity value, on the other hand, is calculated on the amount women would be earning if they were in the paid labour market instead of doing unpaid work. In Canada in 1992, the opportunity value of unpaid work was $318.8 billion. To read more about these measures visit Valuing Unpaid Work (notes on a talk by Evelyn Drescher.)

Child playingUnfortunately both replacement value and opportunity value perpetuate the fact that women's work, even in the paid work force, is undervalued and paid less than men's. However, numbers as staggeringly high as $300 billion do highlight the absolute dependency of paid work activities on women's unpaid work of reproduction and care of life. The calculations rely on time-use surveys to gather statistics on unpaid work. The wealth of information a time-use survey generates is a crucial tool to be used in the policy creation work of the federal and provincial governments of Canada.

Genuine Progress Index (GPI)
The founders of Nova Scotia's Genuine Progress Index (GPI) took Waring's suggestion to measure time and they went even further. They wanted an economic measure that would allow for values beyond market values. As they say, "What we measure is literally a sign of what we value as a society. If critical social and ecological assets are not counted and valued in our measures of progress, they receive insufficient attention in the policy arena." And so they came up with a system that consists of 22 social, economic and environmental components used to measure genuine progress within the province. The components include:

1. Time Use
  • Economic Value of Civic and Voluntary Work
  • Economic Value of Unpaid Housework and Child Care
  • Costs of Underemployment
  • Value of Leisure Time
  • 2. Natural Capital
  • Soils and Agriculture
  • Forests
  • Marine Environment/Fisheries
  • Non-renewable Subsoil Assets
  • 3. Environment Quality
  • Greenhouse Gas Emissions
  • Sustainable Transportation
  • Ecological Footprint Analysis
  • Air Quality
  • Water Quality
  • Solid Waste
  • 4. Socio-economic
  • Income Distribution
  • Debt, External Borrowing, and Capital Movements
  • Valuations of Durability
  • Composite Livelihood Security Index
  • 5. Social Capital
  • Health Care
  • Educational Attainment
  • Costs of Crime
  • Human Freedom Index
  • If the GPI were used as a measure of economic growth, governments would not likely support the expansion of the arms industry or the development of casinos as these are shown to have destroyed the health of communities. In contrast, governments would be more likely to support social services that provide for the most vulnerable members of society.

    What can I do?

    In our own lives there are many things that we can do to broaden the way our society measures economic growth. What can you do?

    1. We all need to start talking about economics, recognizing that it is our right to say how we want the economy to be structured.

    2. All citizens of Canada have the right - and responsibility - to talk to their elected government officials and question on what basis they make decisions. We can ask them how they are using time-use data collected by Statistics Canada. We can also ask them what they know about alternative accounting and encourage them to use measures like the GPI Atlantic as tools for measuring healthy societies.

    3. We can join organizations like the Canadian Centre for Policy Alternatives (CCPA) and GPI Atlantic joining our voice with others to demand that economic growth not be the only measuring stick used to make decisions in our society. Some organizations, like the CCPA, produce Alternative Budgets and look for citizen input in this process.

    4. We can work with our governments and civil society to ensure the maintenance of systems that protect the most vulnerable (health care, education, social assistance). These are not charity but rather essential parts of a healthy economy.

    5. We can join trading and bartering networks or start our own informal systems that create societies of equality and caring. We can refuse to participate in economic activities that are harmful to people and the earth by not buying violent games, reducing the amount of imported foods and other goods we consume, and choosing to support small businesses instead of large corporations.

    6. We can adapt our language so that we don't say things like, "My mother doesn't work." We can start to see that all people of all ages and all abilities are contributing to the society we live in regardless of whether or not they are recognized by the monetary economy.

    7. We can learn to judge the richness of our society and ourselves on things other than money. Many people who have money are very poor in time because they are so busy working to accumulate that wealth. Those of us who have little money may be rich in ideas, time, sensitivity, and have other gifts that are much needed in our society.
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