Who's Counting?

Marilyn Waring’s main point is that:

1. economics seems to value the wrong things. For example:
            a. unpaid work is not valued
            b. the environment is not valued.

Waring also provides a critique of economics as a discipline, pointing out that:

1. Economists use language and math to create a power differential between them and the 'people;'
2. Economists' use of math and numbers is promotes the idea that economics is 'scientific' and 'objective;'
3. Behind these 'objective' numbers there are a number of subjective value decisions.

Can you pick out some of the subjective value judgments that economists make?

Much of her discussion is based on macroeconomics – a critique of GDP and growth theory, but some of what she has to say is important from a microeconomic perspective as well.  Micro and macro cannot be separated.

We have already talked quite a bit about microeconomic labor theories and how they are problematic because they ignore unpaid work.
Why is unpaid work so important to the economy?

As we discussed, unpaid work is important because it provides the basis for the economy. (I made a small error in presenting the cake theory the last time.)

Caring labor, which includes the work of raising children, feeding families, etc. provides the basis for the labor force, the educational system, etc.

Why do policy makers need to be aware of it?

1. Because policies need to address not only the monetary economy, but also the state of the nonmonetary economy. If these activities are invisible, policy makers will not see the need for policies to address concerns in these areas, and yet this could have a vital impact on the economy. Are people overwhelmed by the amount of nonmarket work they are doing? Do they have the kinds of supports available to do this work effectively? If not, what might the impact on the economy be? Less well trained adults, malnutrition, health epidemics, etc.

2. If these activities are ignored or not measured then policy changes which worsen conditions in the nonmarket economy will also go unnoticed. During structural adjustment, government spending was cut and this caused hardships, particularly for women, because they had to make up for the cut government programs, by increasing their care of the sick, the elderly, the young. This increased women's labor burden, but was not included in the cost/benefit analysis when these program cuts were proposed, because this work was invisible. Basically, policy makers ignored the unpaid sector, but at the same time relayed on it to replace government spending.

What will help us understand the nonmarket economy better – collecting time use data. We need to know how people spend their time.

Waring also talks about the need to monitor the environment better through the development of qualitative environment indicators which can monitor air and water quality, measure deforestation, mineral extraction, and the survival of animal species.

Have various countries/international organizations carried out her suggestions?  You will find out about time use data collection on the next homework assignment.

How should the environment be valued?

Should a tree be valued by its market value, or does it have some other, intrinsic value? What is the value of clean air, a more diverse species base, etc.?

Clearly going back to a single number, reported in monetary terms is not the answer to all these questions. Unfortunately, policy makers prefer 'hard' numbers.

How should the use of natural resources be distributed both across time and countries?

20% of the world's population accounts for 53% of carbon monoxide emissions.

Poverty leads to the need to exploit resources, which in turn leads to worse conditions.

At the same time wealth leads to more consumption, which also worsens the environment. So income inequality at both ends contributes to environmental problems.

Some have argued that the developing countries cannot develop to the level that the West has achieved, but this means that people in these countries will have to stay in extreme poverty, while the West continues to enjoy massive consumption.

One solution is for developing countries to "leap-frog" technologies and move directly to more sustainable forms of development.

But developed countries also must do their part, by shifting their consumption patterns.