Why progress might have peaked 40 years ago

Shannon Roberts
July 11, 2017
Reproduced with Permission
Demography is Destiny

Did genuine progress peak 40 years ago? The most recent of a series of articles discussing the positives and negatives of population growth in The Conversation claims that it did; at least in Australia:

The fact that GDP, our main measure of growth, might be an utterly inadequate and inappropriate yardstick for our times remains a kooky idea to most economists, both in business and government.

One of the oldest and best-researched alternative measures is the Genuine Progress Indicator (GPI). Based on the work of the American economist Herman Daly in the 1970s and '80s, GPI takes into account different measures of human wellbeing, grouped into economic, environmental and social categories.

Examples on the negative side of the ledger include income inequality, CO2 emissions, water pollution, loss of biodiversity and the misery of car accidents.

On the positive side, and also left out of GDP, are the value of household work, parenting, unpaid child and aged care, volunteer work, the quality of education, the value of consumer goods lasting longer, and so on. The overall GPI measure, expressed in dollars, takes 26 such factors into account.

Since it is grounded in the real world and our real experience, GPI is a better indicator than GDP of how satisfactory we find our daily lives, of our level of contentment, and of our general level of wellbeing.

As it happens, there is quite good data on GPI going back decades for some countries. While global GDP (and GDP per capita) continued to grow strongly after the second world war, and continues today, global GPI basically stalled in 1970 and has barely improved since.

In Australia the stall point appears to be about 1974 . GPI is now lower than for any period since the early 1960s. That is, our wellbeing, if we accept that GPI is a fair measure of the things that make life most worthwhile, has been going backwards for decades.

The discussion of progress in this way is thought-provoking and has become more common internationally. As the author states, measuring wellbeing by reference to GDP growth is deceptive and wider measures provide a better approximation of actual well-being.

For instance, government policies which aim to increase the entry of mothers of young children into the workplace are just one example of policies which may increase GDP growth in the short term to make a government look good, yet ignore the long-term societal benefits of a mother spending time raising her young child. It can also be a false increase in GDP with no more actual work being done at all, as commentary on the GPI discusses:

Unpaid household work has always made a large contribution to human welfare. Indeed, the history of industrialisation has been the history of transferring activities out of the household sector into the market sector. This trend continues. With changes in the workforce − and in particular the entry of women into paid labour − more tasks that were previously performed unpaid and in the home are now purchased in the market. These include housekeeping, takeaway food, restaurant meals, gardening services and paid childcare. Transfers from the household to the market sector are recorded as increases in GDP, but this exaggerates the true increase in well-being. The GPI is therefore adjusted to account for the value of household labour in Australia.

However, the article goes on to reach the wrong conclusion by arguing that it was population growth which stalled progress. It appears to argue that Australia's social ills would be cured if the population returned to the level it was before well-being began to decrease; that is to below 15 million.

Australia's population currently stands at 24 million and, with only three people per square kilometre of land area, the country has one of the lowest population densities in the world. While a loss of Australian cultural values, a failure to adequately care for the environment or failing to provide adequate infrastructure could well be factors caused by human behaviour, it seems simplistic to argue that it is population growth which has caused a decrease in wellbeing.

There are numerous other factors which drastically began to change around the 'stall point' of 1974 which may have affected wellbeing and happiness. The sexual revolution, an increase in divorce rates, a decrease in marriage, an increase in double-income working families and the corresponding increase in the busy-ness of family life, a large drop in fertility rates and family size, increased materialism, and consumer goods which are designed to break and be re-purchased in a year or two just to name a few.

It is worth wondering if some of these changes could have stalled progress when measured as human well-being, rather than simply the increase in population size. However the article's discussion of worthwhile measurements of social wellbeing is pertinent, especially given the ever-increasing need internationally for caregivers for the elderly and the renewed recognition of the contribution of mothers caring for their children.