Philosophy Hammer
Philosophy, Economics, Politics & Psychology Tested with a Hammer

103: Marilyn Waring Part VII:
Two Ameliorations to the UNSNA

Summary by: Jeff McLaren

The United Nations System of National Accounts has a value hierarchy with material war production counted through market transactions at the top. Immaterial production is lower on the list and non-market transactions, such as the free gifts of nature and women’s traditional work are valueless; not even counted. If this value system is morally offensive, how do we change it? In her development as an economist, politician, professor and author, at various times throughout her development she found two solutions which she, at the time of writing, came to feel were not so much solutions, rather they were partial solutions and ameliorations.

The first amelioration would simply be to impute value for women’s unpaid work. Imputations are already done for black market work and are very easy to do. The debate would be how much to impute. One objection would be that black market activity is a market activity that needs to be counted but traditional women’s work is still a non-market activity. This objection is answered by a policy change: a basic income guarantee would be the market counting mechanism for that work. Since non-market work takes up more time than market work, imputations of this value would dramatically change the amount and distribution of wealth and value in the national accounts.

The author believes that imputing value for women’s unpaid work is a good and giant step forward: every policy decision made by government would be influenced by different metrics and data resulting in different and better outcomes for human welfare. However, war and material production would still be at the top of the value system and therefore would override all other values in times of manufactured crisis. Further, there would still be an invisibility to women’s work and reproduction because a BIG would only facilitate half the market transaction: the consumption part. Simply imputing has the effect of treating all women’s work or classes of reproduction the same. (Q1) The imputation of value in the current system will not allow for qualitative differences in affective and immaterial production.

“While I knew that reproduction should not be imputed, I also know that we must insist that it be….While I shall insist that we work to transform the system in this way, and use all its tools to do that, we must not rest there. With all its immediate relief and distinct policy possibilities, we would still be left with a system that reduces women’s lives to statements of mathematical formula.”

Another short coming of merely imputing value to women’s work is that it leaves out the environment. How do we give value to the free gifts of nature?

The second amelioration to deal with the free gifts of nature is to consider the creative or destructive nature of consumption and production. The author gives credit to E.F. Schumacher in his book “Small Is Beautiful” for this line of thought. “Economics, he argued, should distinguish between those manufactured goods made from renewable resources and those based on nonrenewable resources. Cost, to a manufacturer, is the same whether he uses five dollars worth of oil or five dollars worth of coconuts. And his decision will be rational if he makes the choice that brings the greatest profit. To the rest of us, the two costs are not the same. Since oil supplies cannot be renewed, the overexploitation should be counted as disruptive growth.”

In other words, in the national accounts GDP calculations we should further divide both income and expenditure columns into “creative” and “destructive” production and consumption of goods and services. Then we subtract the destructive from the creative. The debates that this accounting change would bring about would focus on a new boundary: the creative/destructive boundary which is similar to our current debate on a production boundary but qualitatively different. Instead of asking: “is an activity productive or non-productive in the market from the perspective of war making potential?” we would be asking: “is an activity creative or destructive?” This would be a major value change. (Q2)

Again this would be a significant and positive step forward. However the author notes that environmental issues do not respect borders and many are issues of the commons. (Q3)

But ultimately the deficiency in both these solutions is that it perpetuates the current inverted value system. The best solution would not reduce all values to a cash value. She quotes E.F. Schumacher again: “To press non-economic values into the framework of the economic calculus economists use the method of cost benefit analysis….it is a procedure by which the higher is reduced to the level of the lower and the priceless is given a price. It can therefore never serve to clarify the situation and lead to an enlightened decision. All it can do is lead to self deception or the deception of others;…what is worse and destructive of civilisation is the pretense that everything has a price or in other words, that money is the highest of all values.” (Q4)

Next time we will glimpse the whole.

Q1 One thing the market does do well is to measure difference in performance, quality or image value. For example superstar athletes can be ranked and their abilities given a price; different makes and models of cars can be ranked and priced accordingly; and the relative value of a brand image can be also ranked and priced accordingly. But how does one rank and value motherhood or special needs? The market is good at measuring and ranking for a clearly determined purpose: goals scored, reliability or trending fashion. The problem of treating all women’s work as the same means that an abusive parent and a loving parent that both provide the same material needs for their children are valued the same. Does anyone have a problem with this?

Q2 If we subtract costs from benefits we would be getting a more realistic picture of the effects of human action in the world. The notion of creative and destructive add new values into the system however she fears that the arguments from the existing paradigm would settle on creative or destructive for war, defense, security or some other violent or competitive value. Is adding values to a hierarchical list of values a step in the right direction? What if the top value is still war?

Q3 The author believes that our environmental problems are transnational. National solutions may help but will not solve the problem (in most and the most important cases). I suspect that she would not have been surprised at the failure of Kyoto Protocol and would likely feel the same with the Paris Climate Agreement. In our market system these agreements are a prisoner’s dilemma: the individual best and most rational way to act is to ignore the agreement regardless of whether others follow it or not because they impose market costs with potential non-market benefits. Does this worry you?

Q4 Is money the highest of all values? Our system does make money the measure of all values and puts war capabilities as counted with money as the highest value. Can you imagine a system in which money is not the measure of all values and war is not the highest value? Stay tuned for our last session next time.

© 2008 - 2018, James Jeff McLaren