by David Boyle
It wasn’t a new discovery that wealth meant more than money. ‘To my big brother, the richest man in town!’ says George Bailey’s brother in It’s a Wonderful Life, even though we know he has very little money. ‘When I was a boy, my family had little money, but still we had wealth,’ said the businessman Sir Ernest Hall more recently.
But it’s a lesson that has to be constantly re-learned. ‘The sentence “let’s get out of this airy stuff and look at the bottom line” ends with one small phrase,’ wrote the American poet Robert Bly. ‘And yet a whole civilization can disappear through that small hole.’
II
It slowly dawned on people that there was something wrong with the numbers. Maybe things shouldn’t have to ‘grow’ at all. John Stuart Mill certainly believed that ‘it is only in the backward countries of the world that increased production is still an important object’. There might, anyway, be some difference between counting money and counting ‘wealth’ or ‘progress’ or ‘success’. There are other things we want to achieve apart from money. But what could we do instead? The solution was, as always, to measure something else – and preferably a lot of different things: if you want to measure the unmeasurable, this usually seems the best solution. But the backlash to GNP was a long time coming.
It has been a revolution brought about by a long list of people, but four stand out. The first was the economist E.J. Mishan. Mishan’s book The Costs of Economic Growth came out at the height of flower power in 1967, and four years before the green movement arrived with a fanfare of trumpets and the publication – within a month of each other – of Blueprint for Survival and Limits to Growth. It was also the year of the Torrey Canyon disaster, where an oil tanker split open off the Scilly Isles and covered the beaches of the West Country with oil. It required an enormous clean-up operation – all of which counted as a plus in the national accounts. ‘The civilization of the West carries with it the seeds of its own disintegration,’ wrote Mishan, whose colleagues at the London School of Economics regarded him as an ‘amiable eccentric’ as he railed against what he called the ‘mass flight from reality into statistics’.
‘Our environment is sinking fast into a welter of disamenities, yet the most vocal representatives of the main political parties can’t raise their eyes from the trade figures to remark the painful event,’ he wrote. ‘We have become so preoccupied with the ups and downs of the indices that we fail to raise our sights to the larger issues that confront us.’
Mishan was a prophet, but no revolutionary. Quite the reverse – he prefaced the new editions of his book with long rants about schoolgirl pregnancies, junk-mail, gay hotlines and one-parent families. ‘The suburbs were quiet and pleasant,’ he wrote nostalgically in 1993 about the days before economic growth. ‘Nobody’s ears were assailed by low-flying aircraft or the neighbours’ stereophonics, nor indeed by screaming chainsaws and long-wailing lawn-mowers. In English seaside resorts it was still possible to smell the salt sea air. The Mediterranean coastline had not yet been wrecked by “development” and the waters were clear and fit to bathe in.’
But as his analysis grew in influence, he became the target for more abuse. What about the costs of not growing, said his critics? What about the poor people who need economic growth? ‘Ministerial twaddle,’ said Mishan. What about the fact that raw materials haven’t actually run out yet? ‘A man who falls from a hundred-storey building will survive the first ninety-nine storeys unscathed,’ wrote Mishan. ‘Were he as sanguine as our technocrats, his confidence would grow with the number of storeys he passed on his downward flight and would be at a maximum just before his free-fall abruptly halted.’
The free-fall continues unabated. But help was at hand for Mishan from a completely different point of view. New Zealand MP Marilyn Waring, whose book If Women Counted was published in 1988, used the example of a tree. When it is chopped down and sold as wood it has a measurable economic value. But while it is alive and creating oxygen it doesn’t. Surely we should start measuring in such a way that we can include the living trees as well, she said.
It was her time as chairman of the New Zealand public accounts committee that really opened her eyes to the problem. Waring noticed that many of the aspects of life that mattered most were completely ignored by the government, because officials only counted money. And one of these aspects of life was the work done around the world by women, often in the home – which had previously been regarded by economists as an infinite resource. She wrote a paper for the Women and Food conference in Sydney in 1982, and submitted it for comment to Australia’s deputy chief statistician. ‘His memo of reply to me – a classic of sexist economic assumptions – was one of the major incentives to write this book,’ she wrote in the introduction. If Women Counted was a brave book to write, and she quoted her fellow New Zealander Katherine Mansfield at the outset: ‘Risk – risk anything. Care no more for the opinion of others, for those voices. Do the hardest thing on earth for you to do. Act for yourself. Face the Truth.’ It was a risky move for someone with a political career.
She dug out the lists of students who worked under Kuznets in the 1930s to develop national accounting in the first place. The names were all men, but at the bottom was an important note: ‘Five clerks, all women with substantial experience and know-how, assisted importantly in this work.’ These women – all with substantial experience apparently – had become non-persons. And their invisibility had spread to the system they created which still ignores women’s work. In the UN accounting system, farmers’ wives and daughters were excluded from the statistics of agricultural labourers because there was no money changing hands. When a man marries his housekeeper, said Waring, the value of GNP goes down.
In 1970, the feminist Lisa Leghorn used a survey by Chase Manhattan Bank to find out ‘what a wife was worth’. By multiplying the figure by the number of housewives in the USA, she came up with a total figure of about half of US GNP or twice total government spending. There have been endless studies since, all of them arguing about whether you should value housework at prevailing wages, at the cost of actually getting the hoovering done or the cost of something else. Strangely enough, however it gets worked out, most studies seem to come up with a figure somewhere around half GNP.
The first step was to come up with an alternative to GNP or GDP. Economists were busy suggesting ones right from the beginning. One of the best known was the Index of Sustainable Economic Welfare (ISEW), which measured money but also subtracted the ‘bads’ (the pollution, disease or depletion of natural resources) from the total. It was drawn up by the alternative economist Clifford Cobb, whose father – theologian John Cobb – teamed up with the World Bank economist Herman Daly to publish the idea in their book For the Common Good.
The ISEW reached a much wider audience as the Genuine Progress Indicator in a long article in the magazine Atlantic Monthly in 1994. It was called ‘If the GDP is up, why is America down?’ The article was written to mark the foundation of a new think-tank in San Francisco called Redefining Progress. It was written by Clifford Cobb, with the journalist Jonathan Rowe and Ted Halstead – the whizzkid founder of Redefining Progress, then still in his twenties – and it had an enormous response.
What’s more, the article seemed to hit home. It was the period in the UK when politicians were searching for the elusive ‘feelgood factor’ which explained why people were so stressed, unhappy and angry with the government even though the numbers said they were wealthy. It was the same in the USA: ‘There seemingly inexplicably remains an extraordinarily deep-rooted foreboding about the economic outlook,’ said the fearsome Alan Greenspan of the Federal Reserve. People had money in their pockets, but they weren’t content. It was a mystery to the politicians. They hate that kind of complexity.
The article piled on the evidence against GNP. The Wall Street Journal had just worked out that the O. J. Simpson trial had cost the equivalent of the total GNP of Grenada. Was that progress? Then there were the liposuction operat
ions – 110,000 of which take place every year in the USA, each of them pumping $2,000 into the growth figures. GNP seems to win both ways – there is growth making people overeat the least healthy foods, then there’s growth operating on them to make them look thin again. There’s growth making pesticides that cause cancer and growth selling drugs to cure it – often made by the same company. People in Los Angeles spend a total of $800 million a year just on the petrol they use up in traffic jams. Is that ‘progress’? Not only do GNP and GDP ignore the collapse of environmental and social underpinnings to the world, but they pretend it is a gain. Readers reached the end of the article sweating with statistics, but doubting the measurements of success.
Of course this wasn’t anything new. A century before, the art critic John Ruskin had urged people to distinguish between wealth and money spent making life worse – what he called ‘illth’. But the Genuine Progress Indicator was something fresh. It showed that ‘genuine progress’ had changed direction some time in the 1970s and was now back to what it had been in 1950. Rab Butler was wrong.
Cobb, Rowe and Halstead attracted hundreds of letters from all over the country. Some of them were supportive and excited. ‘Gross National Product is writ; the economists and statisticians its keepers,’ wrote one of President Johnson’s former ministers in response. ‘A tranquillity index, a cleanliness index, a privacy index might have told us something about the condition of man, but a fast-growing country bent on piling up material things has been indifferent to the little things that add joy to everyday living.’
It also attracted the rage of many economists. ‘GDP is not, and never was intended to be, a measure of national welfare,’ wrote the acting director of US economic analysis, warning that it was not the job of economists to say what was good and what was bad. ‘Personally, although I enjoy arguments, that’s one argument I’m going to stay ten miles away from.’
Jonathan Rowe popped into the meeting of the American Economic Association, just around the corner from the Redefining Progress offices in San Francisco’s Kearney Street. He went to hear the future Treasury Secretary Larry Summers urging the media to distinguish between economic doctors and what he called ‘quacks’. Even the great hope of the economic profession, Paul Krugman, described the people behind the article as ‘incompetents’.
Rowe introduced himself as one of these incompetents to Krugman on his way out. ‘Well I’m sorry, but it’s true,’ he mumbled, dashing off to do an interview.
III
In 1961, Hazel Henderson was a newly-naturalized American citizen, living in a small flat with her daughter. Like Cary Grant, she had made the transition from Bristol to New York City and found it a thrilling place, bustling with new ideas in the first years of the Kennedy presidency. Unlike Cary Grant, the main thing she noticed was the smog and air pollution. ‘I was always getting bronchitis,’ she said. ‘I found that the city had an air pollution index but that nobody knew about it, and I thought it would be incredible if we could get it on the weather broadcasts.’
So while her daughter was asleep during the afternoons, she started writing letters – to the newly-appointed federal communication commissioner and the heads of NBC, ABC and CBS. When the commissioner wrote to say he liked the idea, she forwarded copies to the broadcasters, and five weeks later, the head of news at ABC phoned up to say they would do it. Soon the air pollution measurements were in the New York Times and on the local radio stations, and they have been ever since in most American cities. ‘It was my first experience of the power of indicators,’ she said.
Soon she was organizing a radical environmental group called Citizens for Clean Air, releasing praying mantises into Central Park to cut down the need for insecticides, and learning about economics in her spare time. Her 1981 book, Politics for the Solar Age, made her one of the foremost critics of conventional economic measures in the world – but the air pollution index was an important step towards new ways of measuring success. Maybe we should stop measuring money altogether, she said, and start measuring the stuff that’s really important. ‘Back then, I really thought that economics could be overhauled if we expanded the framework enough,’ she said. ‘That we could make all the necessary changes for GNP to reflect all the intangibles. When I finished the book, I realized that didn’t work. A multidimensional society can’t be measured using one discipline. Using money as the co-efficient would re-anoint economists and use their values to decide how to relate more clean air to more money. Why would we want to re-enthrone economists as philosopher-kings?’
But what should you measure instead? By the 1970s, the most popular alternative to measuring money was measuring ‘quality of life’. The phrase dated back to 1939 – about the same year as somebody first coined the phrase ‘economic growth’ – but in those days it meant ‘the good life’, luxury, indulgence and fun. It wasn’t until President Eisenhower’s Commission on National Goals in 1960 that it took on its present meaning, and for the next four decades, policy-makers have been trying to define it and measure it. Quality of life has played the same role in government as intellectual capital has in business – the elusive Eldorado of measurement.
Then suddenly, cities began to wonder whether there was money in quality of life too. Most cities used to think they could attract corporations to set up factories and headquarters by offering lucrative tax breaks or the chance to pollute happily and without fear. But then it became clear that, while the dodgy companies liked the idea of regulation-free zones, these perks were not that high on the priority list of others. Many decisions about where to move headquarters to were often influenced not by money at all, but where the chief executives and their families happened to want to live. Good schools, nice trees and exciting theatres attracted more companies than low taxes.
The US map publishers Rand McNally capitalized on this in 1981 by launching their regular Places Rated Almanac, which ranked 277 American cities in terms of their ‘liveability’. Atlanta came top the first year. Those at the bottom reached for their lawyers. In the second year, the Almanac staggered policy-makers by putting Pittsburgh top. This was a city which had once been so polluted that it had to keep its street lights on all day. At its best, measuring can shock people into realizing that something has changed.
British geographers were not far behind. A group of academics at Glasgow University managed to convince the Scottish Development Agency, and the regeneration body Glasgow Action, that they should try the same idea. But the UK almanac would be measured more accurately. Before anything else, they would do an opinion poll all over the country to ask people what they thought were the most important aspects of city life. Would it be good schools, low crime, cleanliness, high art? Only if you measured that first could you find out how to weigh the data. The public overwhelmingly rated low crime as the most important aspect of the good life.
The academics set to work. Alan Findlay was an expert in migration and believed that it was ‘quality’ rather than money that was shaping where people were moving. Arthur Morris was interested in where industry wanted to move – and it wasn’t a polluted crime-ridden hell-hole with tax advantages. Findlay and Morris took on a geomorphologist Robert Rogerson – an expert in movements of ice and continents – and in the next 18 months, they set about measuring everything.
Often that meant being on the road. Rogerson visited all the 97 places they measured in the next few years, talking to people at random in the streets and at bus stops to get a sense of place. This was no dry measuring project. Just as Charles Booth hit on the idea of asking school board visitors first, Rogerson and his colleagues hit on the idea of asking estate agents. They gossiped to them about house prices and neighbourhoods. Then there were all the other measurements: how long did people have to wait for operations city by city? How long did they get to spend with their GPs? How much violent crime was there? How big were the school classes?
It all went into the pot and their first index was an enormous success. For three days, the un
iversity switchboard was jammed by reporters from all over the world wanting to cover the story. Birmingham came bottom because of the Bull Ring centre, but the problem was that Glasgow didn’t do very well either. Worse, their historic rivals Edinburgh came top. It was the height of the ‘Glasgow’s Miles Better’ campaign which did so much to improve the city’s image, and this was about the last thing Glasgow’s leaders wanted to hear. They had helped fund the index, after all. The presentation to the city council was a stilted affair around a large oak table at Glasgow city chambers. ‘They either printed the list of cities upside down or the interviews were conducted in Esperanto,’ the enraged city provost Pat Lally told the local press.
Rogerson moved the Quality of Life Group to Strathclyde University and extended the study to cover smaller towns. Most of them used the findings as the basis for improvement, but not all. The angriest confrontation was in the worst place in Scotland, according to their measurements – the notoriously corrupt district of Monklands. Red-faced with fury, one councillor called Rogerson an ‘upstart from Strathclyde University’, shouting ‘I don’t believe a word you say!’
A decade on, and everyone seems to be putting together tables of places which measure how good they are to live in. Most chose somewhere different for the topmost place. A Reading University study in 1986 put Frankfurt top. The pioneering ‘Booming Towns’ studies in the 1980s put Winchester top. When they tried again taking house prices into account, they replaced it with Milton Keynes. Fortune magazine’s best ‘foreign’ cities for business in 1996 put Toronto top, followed by London on the grounds that it is safe, friendly and bustling. Money magazine in the USA chose the small town of Nashua in New Hampshire. The UK marketing group Mintel even published a European Lifestyles compendium of quality of life data in 16 volumes costing a cool £2,450 a set. The London office of the Swiss-based Corporate Resources Group publishes annual surveys of quality of life in different world cities, to help companies work out what they have to pay their executives for working there. Using London as the base city of 100, their weighted index gives Moscow 52.
