Sunday, May 31, 2015

God’s Economy: What You Count

GDP on
What you count, you get.

As I mentioned last week, if you count varieties of violets, you’ll start to see more varieties of violets.

Count offensive behavior and you’ll see it everywhere.

What we currently count, as indicators of our country’s health, are narrowly focused economic indicators. 

One of my favorite radio voices is Kai Ryssdal, host of NPR’s Marketplace, weekdays at 6:30 p.m, “the most widely heard program on business and the economy – radio or television, commercial or public broadcasting – in the country,” according to the show’s own totally unbiased webpage.

Ryssdal interviews economists, explains terms and trends, and midway through each show, he says, in a cheerfully irreverent tone: “Let’s do the numbers!”

The numbers? 

DOW, NASDAQ, GDP: the numbers that declare the health of our corporations, the  size of our profits, the all important growth in our domestic production.

Our economic construct is devised to feed those particular numbers. 

And those numbers are predicated on consumption: more cars, more burgers, more houses, more gas.

What I enjoy about Ryssdal’s show is that he’s not convinced. He does a great job of explaining the numbers, suggesting connections, describing the way things work.

But he also does a good job of holding those all-important numbers at arms length. Do they matter? Sure, to someone, somewhere. To him? Maybe not so much.

And yet, what you count is what you get.

Publicly owned American corporations, companies that have sold stock to investors through publically traded offerings, focus strongly on the numbers: primarily production and profit. In 1919, Henry Ford found he was paying unexpectedly large dividends to shareholders and created a plan to adjust his economic model to allow  lower prices, better quality, and generous benefits for workers.

The Dodge brothers, key investors who had already enjoyed great returns on their initial investment, took Ford to court. In the ensuing lawsuit, the judge sided with the Dodges. According to that historic decision: 
A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes.  
As corporate litigation has unfolded across time, it’s become clear that attention to quality is okay as long as it benefits the bottom line, that care of workers is fine if more motivated, healthier workers can produce more and better products.

But there’s one bottom line, easily captured by numbers, and one, all-consuming goal: income up, expenses down, profits maximized. 

According to our current economic model, it’s a moral good to pay as little as possible, even if that means sweatshops in Bangladesh or child slaves on cocoa plantations in West Africa.

The numbers offer no incentive to curb excess consumption, treat employees fairly, shift to sustainable models, provide family friendly benefits.

What you count is what you get.

Johann Christoph Weigel, Germany, 1695
Then he said to them, “Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions.”
And he told them this parable: “The ground of a certain rich man yielded an abundant harvest. He thought to himself, ‘What shall I do? I have no place to store my crops.’
“Then he said, ‘This is what I’ll do. I will tear down my barns and build bigger ones, and there I will store my surplus grain. And I’ll say to myself, “You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry.”’
“But God said to him, ‘You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?’
“This is how it will be with whoever stores up things for themselves but is not rich toward God.”   
It’s a jarring story that calls into question much of what we assume about profit and wealth. 

According to Jesus, the rich man didn’t earn the profit himself. It was “the ground” that yielded the harvest. 

And while we might think it’s wise to store up surplus for ourselves, God says, emphatically, “You fool!”

The story challenges the political linkage between the Christian faith and free-market capitalism as it critiques our reliance on a material bottom line, suggesting other metrics are needed.

In the US, a new brand of corporation has been emerging that attempts to broaden the bottom line and apply new metrics to corporate life. Benefit Corporations, orCertified “B” Corps, incorporate with a triple bottom line: accountability not just to shareholders to create profit, but to workers and suppliers for fair, safe, and healthy work environments, and to communities to protect the environment and function in sustainable ways that benefit rather than harm local economies. 

It’s a growing movement. As of today, there are almost 1300 Certified B corporations in 41 countries and 121 industries, and 30 US states have passed legislation recognizing Benefit Corporation contracts

That’s a start, but critics of our consumptive economy suggest we need to reject completely an international metric that measures growth in consumption, since growth in GDP is by definition dependent on growth in consumer demand, which is in turn dependent on making consumers want more, newer, bigger, better, to the detriment of happiness, stability, and environmental resources.

In 1971, the Buddhist nation of Bhutan rejected the GDP as the way to measure progress and created in its place measurable indicators of gross national happiness (GNH) based on equitable social development, cultural preservation, conservation of the environment and promotion of good governance. Since then, despite low per capita income and stagnant GDP, key indicators like levels of clean drinking water, literacy, and life expectancy have been on the rise. 

In 2010, Maryland became the first state to explore an alternate metric, adopting the GPI: theGross Progress Indicator. The 26 indicators address issues like pollution, wetland health, college completion rates, employment, housing, cost of ozone depletion. 

Vermont and Oregon have since implemented the same GPI and together those states have found that during the decades their GDPs were rising, their citizens saw little benefit: “Their workers have longer commutes, they have depleted natural resources, volunteerism and free time have declined and income gains have been unequal."
from Questioning Economic Growth, Peter Victor
Nature, 18 November 2010

What you count is what you get. 

Reading through the Maryland indicators, I find myself wondering what measurements would point us toward an economic model more like what God had in mind. 

Acreage set aside as food for the poor?

Single mothers and children well cared for?

Less homes lost to extortive debt?

A slowing of the mass extinction of species?

I’ve been posting for the last few weeks on God’s Economy. Next week my goal is to highlight indicators that would be worth measuring in a new economic model.

What would it be called? What would be the most important things to measure?

I’d love to hear your thoughts. Check back next week for the final installment. 

This post is part of a series on God's Economy. Other posts:
Fruit that Will Last April 19, 2015
God’s Economy: Subtract or Multiply?  April 26, 2015
God’s Economy: Inescapable Network of Mutuality  May 3, 2015
God's Economy: Generational Investment May 10, 2015
God's Economy: Managing Anger Assets  May 17, 2015
God’s Economy: Muchness and Delight May 24, 2015