Things look really good…if all you care about is money
Are things really getting better? Well, the answer is a resounding ‘yes’ if you’re a monetary consequentialist (i.e., think all that matters is maximizing the amount of monetary resources in the world). A group of 21 economists plus one Bjørn Lomborg have a new book coming out soon that will survey 10 pressing global problems such as health, air pollution and gender equality in the world from 1900 to 2050. According to Lomborg’s précis, they have found that on most of the dimensions, things are improving (only biodiversity is identified as having gotten worse), and the positive trends are expected to largely continue. This will come as some relief to those bemoaning recent political, environmental and humanitarian crises. But don’t break out the champagne just yet – their analysis evidently relies on a crude GDP-centric measurement tool that obscures a number of crucial issues.
Lomborg et al. admirably set out to measure/predict past and future progress across the very domains. Quantitative analysis of problems is important, to be sure, and having commensurable metrics can indeed be very useful. Lomborg vastly overstates his case, though, when he infers from their findings that “the world is doing much better” and will likely continue to do so. This is because the book measures progress ultimately in terms of minimizing monetary costs – losses in percent of GDP, in particular. This metric was presumably chosen because it is relatively easy to analyze and can be used as a foundation for comparing progress in diverse domains and across different time periods.
But percent cost to GDP can only tell you about how good things are overall (or overall within a specific domain) if all you care about is GDP. This indicates an odd sort of morality according to which all that matters is money. Well, if that’s the case, we don’t need very fancy analysis of the book to tell us how things are – we could just compare real GDP from varying eras, and note its growth to prove the optimistic point. But more importantly, such a perspective would rely on an impoverished morality that cares about dollar signs, not people. So, for instance, gender equity progress is measured purely in terms of the marginal contribution to the GDP via women’s participation in the workforce - not in terms of enfranchisement, reproductive rights, elimination of patriarchal norms or other concerns of those interested in gender equity. The authors might contend that GDP is a mere proxy for well-being, and they are – like many economists – embarking on utilitarian analyses. It is far from clear that GDP is a good proxy for well-being, though, and Lomborg certainly does not bother trying to make that point.
What’s more, a purely utilitarian outlook would itself be insufficient to capture what are often perceived as society’s contemporary ills. Famously, utilitarianism cannot adequately account for distributional justice. In an era where inequality is indeed rising within countries (though, notably, falling between countries) and movements like Occupy Wall Street become increasingly concerned with the disparity between the vast majority and a small wealthy minority, these concerns should be taken seriously by anyone making sweeping claims about global improvement. Similarly, robust inalienable rights have a hard time under utilitarianism. How can rights violations be meaningfully translated into GDP loss? Indeed, it is perfectly plausible that an institution like slavery might contribute positively to GDP growth, and modern-day slaves make similar contributions. On the Lomborg’s model, if slavery is a boon to GDP, then more slavery would count as a boon to the world and emancipation an unfortunate cost.
To be fair, the book title is more upfront about this limitation (titled “How much have global problems cost the world?”) than Lomborg’s popular press report (titled “Of course the world is better now than it was in 1900” or, in a different venue, “A better world is here”). But given that most people will only see short press summaries like Lomborg’s than read the actual book (indeed, as it’s not out yet, I haven’t had the chance to peruse it – maybe they’re more careful about the scope of their claims in the text), it is crucial that those summaries are fair and don’t overstate the conclusions. Lomborg may well be right that things are overall getting better, but the evidence he adduces is far too limited to make such a claim, and it is important to keep in mind competing considerations that the book’s economic analysis excludes.
One final thought – even on the book’s own terms, it is rather limitedly backwards-looking. It may well be that the greatest future threat to GDP is not the 10 problems they list, but instead the existential risk posed by things like novel technological advances in biological warfare, artificial intelligence and other powerful, potentially world-altering forces. Measuring existential risk is difficult as we can’t just look at past performance – humanity hasn’t been completely wiped out before (as far as we know) – and extrapolate from there. But there are a number of research projects seeking to more accurately quantify those risks, and economists should take such issues into account. The sheer magnitude of loss involved in extinction or near-extinction is such that a small increase in existential risk may well swamp marginal improvements due to fluctuations in, say, medical care.