Posted by Our friendly neighbourhood liberal rag, the The Star, managed to mangle the obvious with this inane article, “Canada may not be as wealthy as you think“. As the The Star now puts a limit on free viewership, I will reproduce a few of the pertinent quotes here so you don’t have to click through.
The resources that make Canada wealthy aren’t increasing at the same pace as economic activity, potentially leaving future generations worse off, a new report on the country’s wealth has found.
Canada’s Gross Domestic Product (GDP), a metric that captures the total economic input and output of a country, has been rising steadily since 1980. It’s the metric politicians most often cite as an indicator of economic health, but more and more leaders and researchers are saying that countries need to find something better.
Well, at least they admit that Canada is resource dependent for its wealth and economic health. I made that point abundantly clear in my article “Hewers of Wood and Drawers of Water” that I wrote nearly two years ago.
“It doesn’t distinguish between activity that is beneficial or destructive to us as humans,” said Sonia Furstenau, Green party MLA for Cowichan Valley and an advocate for more comprehensive economic measurements.
“The economy should be serving people,” Furstenau said. “It should operate in service to humans and ideally to future generations as well.”
What’s missing, according to Robert Smith of the International Institute of Sustainable Development (IISD), is a “comprehensive” measurement of wealth. The concept doesn’t just apply to cash.
Here we go again with hairy-fairy terms like “the economy should be serving people.” What does that even mean other than sound hoity and lofty? Wait, I know where I’ve heard that term before; in Oxfam’s report complaining that the richest 8 people in the world owned more than the poorest half of the world; “Our economy must stop excessively rewarding those at the top and start working for all people”. I wrote about that in this article titled “The 1% of the 1%“. I also made the assertion that “Today’s socialists know that communism has been tried ad nauseum in many places over the past century and has failed miserably. We all know the end result of the socialist system is that everyone ends up being equal but equally poor. That is why modern day liberals try to couch their propaganda in nicer terms like ‘our economy must stop excessively rewarding those at the top and start working for all people’. I’m sure if Karl Marx wrote Das Kapital today, he would use those same words; Oxfam should re-title the report, The Communist Manifesto 2017 edition.”
Yup. I addressed exactly all of these points previously and came to the same conclusions a few years ago without the benefit of a large organisation of well paid over-educated “think tank” experts to help me research and analyse reams of data. In the article “Hewers of Wood and Drawers of Water” I pointed out that oil and gas dominates our net exports and in the article “Canada’s Housing Bubble” I noted: “We have a dangerous housing bubble in Canada and it is not one we can extricate ourselves from easily given how dependent the economy is on this bubble at this point in time. The oil and gas industry is in the toilet still and manufacturing just isn’t what it used to be. So are we doomed? Probably”.
This Smith is a bit of an idiot because despite being affiliated with all these self-proclaimed deep thinking intellectuals (the IISD is supposed to be a “think tank” after all) that contributed so much time to research and write this stupid report, he still manages to be surprised that “human capital” in Canada is dropping despite being “technologically advanced… with great education”. What planet is this moron living on? Is he smoking too much of the now liberalised high THC marijuana? It comes as completely no surprise to me because as I have pointed out in the past:
Which brings me back to my original point about Canada basically being a country full of hewers of wood and drawers of water. Nothing drives Canadians more nuts than to say we are a natural resource based economy. Just say these three words (resource-based economy) to an educated Torontonian liberal elitist and the vitriol of spite that will rain down on you could power the Hoover Dam. We are highly educated and innovative! We are services driven! We have great manufacturing! We have technology! The clichés fly fast and furious if you say Canada is nothing but a giant farm, cutting down trees, pumping oil, and mining minerals, to feed our gigantic industrial behemoth neighbour to the south. Unfortunately it happens to be true for the most part.
The article then goes on to try to finish on a high note which is to promote the idea that we should be promoting using alternative measures to gauge “progress” other than GDP.
Marc Lee, a senior economist with the Canadian Centre for Policy Alternatives, said the exercise of moving beyond GDP as a measurement for economic well-being is crucial but contested.
“Depletion of natural capital is pretty serious and potentially existential,” Lee said, and “any way you slice it there are limitations to GDP.”
The communique from the 2018 G7 summit in Charlevoix acknowledged the shortcomings of measuring only economic output and said “monitoring other societal and economic indicators” is important for future well-being.
That can get complicated, Lee said, because not everyone agrees on which metrics are important — or what the numbers mean.
“There’s different approaches to doing it but it’s a worthwhile exercise for thinking about how we want to evolve as a society,” he said.
Well, this is hardly different than what Oxfam said in its own report:
Valuing and measuring what really matters. Moving beyond GDP, we need to measure human progress using the many alternative measures available. These new measures should fully account for the unpaid work of women worldwide. They must reflect not just the scale of economic activity, but how income and wealth are distributed. They must be closely linked to sustainability, helping to build a better world today and for future generations. This will enable us to measure the true progress of our societies.
My response to Oxfam and now to the mendicants at the IISD remains the same:
And what does this mean? More liberal speak like my kids report card which “moves beyond” percentages and A-F grades with pithy phrases like “generally meets requirements appropriate to age group”. I have no idea what that means. I do know what an A and 90% means. Maybe Oxfam means we should adopt Gross National Happiness like what the Kingdom of Bhutan uses. I can tell you the problem right now. Happiness is a relative and subjective state. You want everyone to be happy? Let’s go back to being hunter-gatherers in little African tribes because study after study shows that happiness is always reported to be higher in these societies than anywhere in the West.
GDP is a flawed measure just like any metric taken on its own. Heck I even take issue with the calculation of GDP, not just what its supposed to measure. GDP is calculated using net exports so if I’m Donald Trump, the fact that the US imports more than it exports means a NEGATIVE hit on GDP numbers. Of course that neglects all the great benefits and efficiency gains from trade but yes, that’s how the number is calculated. You want to boost your GDP to win an election? Hope for an earthquake or other catastrophe that destroys major infrastructure as the existing “capital stock” is not calculated but all the investment and economic spending activity used to rebuild is; so reconstruction after a natural disaster actually will boost GDP (ignoring the cost of doing so like running deficits to finance all this spending). So yeah, GDP is not a perfect measure – not even of what it’s supposed to be measuring which is economic output and productivity. But the other stupid measures that the IISD and Oxfam would have us adopt are even worse and serve nothing but to muddy the issue under a cloud of politically correct issues like social responsibility, climate change and environment, sustainable development, etc. That’s why the thumbnail I picked for this article is from the Bhutan Observer relating to the fact that the prime minister was off in New York to promote the concept of “Gross National Happiness” (a term that Bhutan is famous for as it doesn’t even report GDP) while the economy was collapsing and other social issues remain unaddressed.
Alternative economic measurements are already top-of-mind for some B.C. politicians.
Furstenau championed the inclusion of developing a “Genuine Progress Indicator” for the province in the 2017 Green Party election platform.
The platform point, which commits to developing an indicator that includes economic activity, education, income security, health of people and the environment became part of the confidence and supply agreement between the Green caucus and the NDP caucus, which allowed the NDP to form government.
Furstenau said there hasn’t been much movement on the policy point since the agreement was signed.
Well Furstenau, there hasn’t been a lot of movement simply because many of these things simply aren’t clearly quantifiable and measurable economic indicators (at best you could call most of them socio-economic indicators) in the dollar and cents meaning of the word – but GDP is. In fact, we already measure pretty much most of these in one form or another already. Income security – unemployment and underemployment as well as social safety net, poverty lines and pensions. Health of people – infant mortality, life expectancy, infectious disease rates. Education – number of people primary, secondary and post-secondary educated and performance on global standardised knowledge tests. But how do you weight these disparate items to come up with an index? What’s more important and what unit of measure do you use? The idea of a Genuine Progress Indicator is not particularly new but hasn’t ever gotten traction (just like Gross National Happiness) for the simple reason that it doesn’t work. There is no way to calculate a single number from all these variables because they mean different things to different people and are measured using vastly different yardsticks (ie, many are not measurable in terms of dollars and cents). Heck, I could even argue that over-education is a negative as the larger number of unemployable basket-weaving liberal arts students not only don’t contribute to the economy during their extensive schooling; they end up being a drag as they weren’t productive during that time plus they consumed resources in the process. It also, by implication, makes the assertion that a philosophy degree is actually more useful to the country/economy than someone who spent four years apprenticing on the job for a trade like an electrician; an idea that I vehemently disagree with.
Even if you could devise a better yardstick, whether it be GNH or GPI, I wouldn’t trust it anyways because, while GDP isn’t perfect, it is hard for politicians to manipulate because it’s a pretty hard number (unless you’re China where most provinces have historically reported GDP growth faster than the national average – a mathematically impossible outcome). With so many other variables in the equation, I have no doubt, like in Bhutan, that politicians would manipulate the figures to make themselves look good while real underlying problems remain unaddressed. “Look, our Gross National Happiness (per capita) is rising because we’re kinder to the environment with our lower carbon emissions. What do you mean the 60,000 people in Ontario who had their electricity cut off don’t agree that they are better off? They must be Trump or Ford supporters and climate deniers”. What a bunch of complete bollocks.