Thursday, October 23, 2008


Don Speich, Pacific Sun - West Marin's Jonathan Rowe strongly believes that the economists, the Federal Reserve, Congress, the White House-all who have anything to do with measuring and reporting the health of the economy-have it all wrong.

Rowe-co-founder of West Marin Commons, a community organizing group-is not an economist. But he spent many years as a staffer on Capitol Hill listening to scores of economists expound and pronounce at Senate committee meetings-and came away not very impressed.

Economists-those whom politicians listen to and learn from and then introduce bills reflecting what these experts think-are stuck, Rowe believes, in a system centuries old. It's a system that, clinically and using outdated formulas, tells us everything we need to know except what effect money has on the middle class, the environment and social services. . .

Does increased oil production, which results in more fuel for cars at cheaper prices (all usually good signs in the economic measuring stick, the gross domestic product) include calculations about how much more fuel emissions are going to foul the air we breathe and the amount of money it will cost to clean up the air so we don't suffocate in it?

No, he says, if you include that latter cost you more than likely find that the so-called improvement more fuel adds to the GDP is considerably less than reflected in the "good news" often trumpeted by economists, politicians and journalists. In this case, more, he says, is often considerably less and the less usually means the detrimental effects these types of gains in the GDP have on us all.

Testifying before Congress last March (and in an articles based on that testimony), Rowe stated:

"By the standard of the GDP, the worst families in America are those that actually function as families that cook their own meals, take walks after dinner and talk together instead of just farming the kids out to the commercial culture. Cooking at home, talking with kids, walking instead of driving, involve less expenditure of money than do their commercial counterparts.

"Solid marriages involve less expenditure for counseling and divorce. Thus they are threats to the economy as portrayed in the GDP. By that standard, the best kids are the ones who eat the most junk food and exercise the least, because they will run up the biggest medical bills for obesity and diabetes."

What are the specific problems with the GDP and the way economists think about the economy?

Rowe - The first problem is that this view sees only the part of life that is transacted through money. Economy equals money to them. If most economists were fish, money would be the water. Yet money defines just a part of the actual economy that sustains us. We don't pay for sunlight, or the many functions of the atmosphere. We don't pay to breathe. The same is true in the social realm. We don't pay for the help and company of neighbors, or to walk to school or to the store. . .

There's another problem that's even more basic. It has to do with a theology of stuff-and stuff equivalents called "services." Stuff is always and forever good, and more of it is always better. This assumption is embedded in the language. The economy, we are told, consists of "goods" and "services." There are no bads, and no disservices. Shoddy or hurtful products, the lawyer or credit card company that gouges us-in the theology of the GDP, these cannot exist.

It sounds like we should be rethinking our definition of "growth."

When you get down to it, much that is called "growth" today isn't growth at all, as that term usually is understood. It is rather a kind of iatrogenic spiral, in which the economy itself creates problems that more expenditure seems necessary to address. Corporations push junk food at kids. Kids become obese and develop diabetes. Medical treatments are summoned to address those. On and on it goes. . .

Are there economists who see the problem-and are they doing anything about it?

A growing number. But it's tough. They have to bow to the orthodoxy to get their degrees and tenure, and then to be taken seriously within the profession. A few can get away with transgression, such as John Kenneth Galbraith, who wrote past his peers to a popular audience. Galbraith's book The Affluent Society was written half a century ago, but it was prescient. Economists curse him to this day.

Despite all this, the embedded narrative of the GDP is starting to yield. I'd say that within 25 years it will be pretty much done. The Clinton administration actually tried to add footnotes to the GDP to take account of such things as resource depletion. The coal industry killed that. A number of independent groups have produced alternative indexes on their own. Data is a big problem. My own view is that there's not going to be a single master index of well-being. We need to look at a lot of different things.

What should journalists be doing?

They should be reporting-by which I mean they should look at people's lives in concrete terms. Where is the money going and why? What needs are being met off the grid of monetary exchange? Reporters need to shed the theological abstractions of economics-"consumption," "product," "growth" and so on-with all the built-in assumptions, and just look at the world through clear, uncluttered eyes. . .

What does all this have to do with a solution to the current financial meltdown?

The finance people will deal with the finance mess. For the rest of us this could be a chance to rediscover the kind of real economy that tends to languish when there's lots of money. People revert instinctively to that in tough times. It happened in the Depression, for example, the large-scale co-ops that emerged in the Bay Area and elsewhere, based on a work-barter principle. The United Exchange Association in the East Bay had farms, factories, trucks, all operating outside the cash market and what we now would call the GDP. . .

Here in West Marin, I helped found a group called West Marin Commons that is serving as a hub for ride-sharing, sharing of surplus from fruit trees and gardens-a real community-based economics. The ride- and errand-sharing board has been bustling since gas prices began to soar. . .

In the bigger picture, the economic collapse of the late 1920s produced the New Deal on the one hand and the Third Reich on the other. The authoritarian clouds have been gathering in Washington for the last eight years. These things usually get pretty far along before people start to see the picture.