Quality of life posted 9/15/2009 5:02:20 PM | 6 kudos what's this?     report abuse

eastham

French President Nicholas Sarkozy convened a panel of 37 economists, led by Nobel laureate Joseph Stiglitz, to devise a new way of assessing economic growth. Currently, economic growth is measured by gross domestic product. Sarkozy was looking for a more nuanced and forward-looking econometric that includes an examination of quality of life indicators. And it appears that he’s gotten one.

Using GDP as the sole indicator of economic prosperity has been under the gun for many years. Critics contend that it is overly narrow, and in an article in today’s Deutsche Welle, it ignores important factors, “such as environmental degradation, people’s health, workplace safety, job security, vacation time and a population’s general degree of happiness.” Stiglitz, Sarkozy and company contend economic prosperity is complex and using only one economic indicator to measure it is a fool’s errand.

As the economists on Stiglitz’s panel argued, a country can cut down all of its trees, sell the wood and temporarily raise its GDP. However, in cutting down the trees, people living in the country are more vulnerable to bad storms, will suffer from degradation of the drinking water, etc. Sarkozy will be pushing hard for the change at the next meeting of G-20 countries. “For years, we have been telling people that their living standards are getting better, while at the same time their lives were growing more difficult. We must understand the people who have lost their homes, their jobs and some of their pensions in the wake of the financial crisis and who feel they have been cheated, although it is not their fault."

Who will support and who will oppose Sarkozy’s efforts at the G-20? China? China is in a difficult place. If quality of life issues are assessed along with GDP, China fares far worse. Opposing the effort outright, however, will cause China problems internally. First, they have been pushing for new, greener industries. Secondly, they have been sit-ins and other forms of civil unrest in areas of China blighted by pollution. Those who have not resorted to civil disobedience have resorted to courts of law and have received (by Chinese standards) sizeable judgments.

India is in a similar quandary. While India is now one of the destinations of choice in our global economy, it scores poorly on various quality of life scales. The gap between the haves and the have-nots grows ever wider. The poor in India are unimaginably poor by western standards.

But how would the US fare? Not as well as you think. Private companies like Mercer Human Resources Consulting already rank the world’s cities and the best we do is Honolulu at number 27 – Zurich is #1. Here is the list of criteria used by Mercer:

• Political and social environment (political stability, crime, law enforcement, etc);
• Economic environment (currency exchange regulations, banking services, etc);
• Socio-cultural environment (censorship, limitations on personal freedom, etc);
• Medical and health considerations (medical supplies and services, infectious diseases, sewage, waste disposal, air pollution, etc);
• Schools and education (standard and availability of schools, etc);
• Public services and transportation (electricity, water, public transport, traffic congestion, etc);
• Recreation (restaurants, theatres, cinemas, sports and leisure, etc);
• Consumer goods (availability of food/daily consumption items, cars, etc);
• Housing (housing, household appliances, furniture, maintenance services, etc);
• Natural environment (climate, record of natural disasters).

While we would certainly score very highly for political stability, we have a high crime rate (although in our defense, it is falling). The catastrophe of the banking industry during the past year wipes the 2nd bullet point right out. While we do enjoy a good deal of personal freedom, that has been compromised by the passage of the Patriot Act and local censorship dust-ups ruin the chances of Cincinnati to make it through the top 100. In education, US children score far below their European counterparts. As evidenced by the recent collapse of several bridges, traffic jams, and the age of our electric grid and sewer systems, we don’t do too well. Well, we do have lots of stuff to buy, unfortunately, it’s all made in China and our food has been contaminated with bioengineered grains, E. coli, and other pathogens I shudder to think about. And natural disasters...don't ask the residents of New Orleans.

Hmm.

Here's a link to the Stiglitz/Sarkozy report -- English version.

Copy & paste to friend: (Click inside box; Ctrl + C to copy; Ctrl + V to paste)

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