PROBLEMS OF USING PRODUCTIVITY COMPARISONS
There are many reasons why measuring GDP alone is an untrustworthy
yardstick in determining a nation's well-being.
First, GDP does not reflect work done without pay, like housework,
bartering or self-sufficiency work. In times of recession, these forms
of work may actually increase to make up the difference. Housework in particular
is a tremendous omission. Harvard economist Juliet Schor calculates that nearly
half of all labor done in the United States is housework; in 1987, the
average person worked 1,157 hours at home and 1,316 on the job.1
Second, GDP includes market waste and inefficiency. For
example, if you grow a tomato and eat it yourself, you have contributed
nothing to the GDP. But if you sell it to your neighbor for 10 cents, who
sells it for 20 cents, who sells it for 30 cents, then the GDP grows with
each additional distributor.
Third, GDP includes productive waste and inefficiency. An incompetent
manufacturer who produces shirts at $5 a pop contributes more to the GDP
than a smart manufacturer who produces them at $2.
Fourth, GDP contains contradictory goods and services. For example,
it includes the production of cancer-causing cigarettes as well as cancer-curing
Fifth, GDP does not indicate how wisely the goods and services are
used. Americans produced $17 billion worth of tobacco in 1991, a product
that kills 400,000 Americans a year.2 This
not only drags down our productivity, but also claims another share of
it for the treatment of smokers. A much better use of the money would be
to computerize our nation's schools, increase AIDS research, or vaccinate
children. The wisdom (or the lack thereof) in using our productivity becomes
especially apparent when you consider health care. The U.S. spends over
14 percent of its GDP on health care, but this is spent mostly on emergency,
after-the-fact treatment. Nary a drop of this is invested in preventative
health care, unlike many nations who have reduced their health care expenses
by doing so.
So we must consider a great many more statistics than just productivity
to judge how well a nation is doing. As the following statistics will show,
the rest of the industrialized world has used their productivity much more
wisely than the U.S.
Return to Overview
1 Juliet Schor, The Overworked American
(New York: HarperCollins, 1991), p. 36.
2 Tobacco productivity: U.S. Bureau
of Economic Analysis, Survey of Current Business, May and November,
1993. Tobacco mortality: Michael Evans Begay et al., "The Tobacco
Industry, State Politics, and Tobacco Education in California," American
Journal of Public Health, Vol. 83, No. 9, Sept. 1993, p. 1214.