LRT and GDP
- George Sweetman
- 04 Sep 2015
Measuring transit’s true impace
IN A SPEECH at the University of Kansas in March 1968, Robert F. Kennedy eloquently summarized the short- comings of gross national product:
Gross national product counts air pollution and cigarette advertising, and ambulances to clear away our high- ways of carnage. It counts special locks for our doors and jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl…. 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 measures everything in short, except that which makes life worthwhile.
Forty years later, former French president Nicholas Sarkozy contracted a study titled the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP) to identify the limits of gross domestic product (GDP) as an indicator of economic performance and social progress. The challenges with GDP have been clear for four decades so why was it necessary to commission another study?
It is well known in business that what gets measured is what gets produced and this lies at the core of the problem with GDP. Joseph Stiglitz, author of The Price of Inequality and a member of the CMEPSP commission, writes that “market signals drive financial allocations, but the signals are distorted because nations of the world ’price’ many of the world’s priceless resources (stable climate, clean air, water) at zero.” The zero value placed on the environment results in a perception that society must choose between the environment and GDP. Stiglitz suggests that this may be a false choice once environmental degradation is appropriately included in our measurement of economic performance.
As author Wendell Berry points out in his 2014 essay titled Our Deserted Country, “it has been a mistake to allow industrialism, from the beginning, to measure its conduct exclusively by its own success, using such standards as mechanical efficiency or monetary profit, and ignoring all else.”
Too often we allow elected officials and corporations to make decisions based solely on economic factors — factors which allocate a value of zero to the environment and to our social fabric. Perhaps the fate of the steel industry would have been different if the decision to “off-shore” assigned a value to the unemployed workers, the impacted local economy, the reduced social fabric, the empty storefronts and the contaminated land no longer available for use.
Hamilton is in the midst of a revitalization. Projects such as LRT and the west harbour lands will have a trans- formative and enduring impact on our city. We need to ensure that decisions regarding these projects are based on more than just economics — the social and environmental aspects must have equal weight in the decision matrix. The citizens and the environment will be here long after the corporations and elected officials have moved on. Let’s make sure that when these projects are completed, they have contributed to what makes life worthwhile.
Note: GDP is the market value of everything produced within a country; GNP is the value of what’s produced by a country’s residents, no matter where they live. In 1991, recognizing that virtually all other countries measure GDP, the U.S. Bureau of Economic Analysis switched its primary measure from GNP to GDP to be consistent with other nations and make comparisons easier.
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