Where GDP misses out

Geoffrey Heard writes: Re. “We need to talk about China” (yesterday). The problem is that GDP measures no such thing as “output” — it just measures the laundry, the money, that is sloshing around in the big washing machine. And it is tied to western-style economics and economies where EVERYTHING is tradable, everything has a cash value.

Applied to many of the “poor” countries, it pays no attention to a huge amount of activity which is not counted as economic activity — but it is. Subsistence farming and hunting/fishing puts food on the table, traditional methods provide housing and even some items of clothing, barter moves goods around, entertainment is generated without a penny being spent, people walk from one place to another, and so forth.

So the majority/vast numbers of people in the world — certainly in the third world — live the major part of their lives and even die without worrying the GDP counter.

Drop dead in Australia and you trigger a flurry of money exchange measured in thousands or even tens of thousands of dollars, contributing to GDP. Drop dead in New Guinea and your family gathers around, mourns your death, maybe spends a few hundred kina on extra food, and buries you free with hymns sung a cappella in parts by village church members (NOT a designated choir) except for some traditional shell money exchanges.

Oh — they might buy a coffin whipped up by a local carpenter if time is of the essence and no-one has appropriate planks to hand.

This insistence in imposing western style economics on everything also affects the value of the big asset that nearly everyone in the islands has — land.

People are told they need to register their land so it can be valued, i.e. it can be bought and sold in a western sense, with ownership transferring absolutely. Until land is registered, it has a very low value, when it is registered, it has a much higher value, says the spiel.

Actually, this is 180 degrees from the truth. While land is held traditionally, it has infinite value. It both feeds and houses you but not only you, your ancestors going back deep into the mists of the past, and your descendants, moving forward deep into the mists of the future.

No amount of money anyone could pay you today could compensate for that.

If you sell the land of which you are the steward, not the owner traditionally, how will you eat? The money won’t last even your lifetime, let alone provide for the future like traditionally held land will.

And invest it? How sure are you of getting a return in the greatest ponzi scheme of them all — the world economy?

Even in somewhere like Australia, GDP falls down in failing to take into account untold amounts of voluntary activity, but when applied to a poor country where subsistence farming is a significant activity, it is just nonsense.

On campaign scorecard

Geoff Edwards writes: Re “Crikey campaign scorecard: Scare campaigning sets the tone” (yesterday). All four Scorecard discussants seem to regard Bill Shorten’s claim that the Coalition would privatise Medicare as overreach. Bernard Keane: “It’s brutal, cynical politics”; Sue Cato: Labor “have flicked the ‘switch to vaudeville’”; John Hewson: Shorten’s “scare campaign over Medicare”; Simon Brehney: “biggest lie of the campaign”.

I would have thought it is these dismissive reactions that constitute overreach. The process by which public authorities are gutted and their functions farmed out to commercial providers has been played out many times during the past two decades of neoliberal re-engineering of our society. Think Commonwealth Employment Service. Think vocational education. Think grain marketing. In NSW, even the Office of Titles seems set for outsourcing. Why on earth should we assume that the Coalition has no such plans for Medicare, or that Malcolm Turnbull’s denial would bind the party the day after he vacates the leadership?

Perhaps your discussants are simply following the lead of businessman Tony Shepherd, who placed this on the government’s agenda, and who last evening differentiated outsourcing of payment operations from privatisation. Looks mightily like privatisation to me.