Economic Evaluations

Greetings from inside a workshop on economic evaluation in the Courtyard Marriott hotel in Toronto. Here’s a bit of trivia: toilet seats in the Marriott are heated!

Something one of my economics instructors said this week has resonated with me: if you hire a housekeeper, the economy improves (GDP goes up). But if you marry your housekeeper, the economy deflates. This is because the way that governments keep accounts is from a market perspective, whereby only businesses can produce, and whereby the only role for households is to consume.

But the reality, as I hope is obvious, is that there is a great deal of economic activity that occurs within the household, but which is invisible to formal accounting. When you raise your kids, you are improving the economy by creating more consumers and producers and by preventing the creation –one hopes– of criminals and other resource drains. When one spouse does the chores, it frees the other spouse to do more measurable economic activities. By tending your garden you improve property values. And so on.

Yet societies who have excelled at such subtle and long term economic activities have been artificially devalued by the expanding global market perspective. The result is that the Western-style accounting stance is being exported to all societies, with mixed results.

The positive results are there: seeming increased wealth. But the negative results are often hidden because our methods of accounting do not permit us to measure or even acknowledge them: reduced social cohesion, less time spent between parent and child, etc.

More and more, I’m starting to suspect that much of the woe in the world is not caused so much by capitalism per se, or by evil imperialists (though both play a role). Rather, it’s all due to our mistaken reliance on flawed and non-inclusive economic models, the outputs of which feed the overvaluation of such things as the free market and currency valuation.

Okay, back to the heated toilets…