The Value of Nothing: GDP Alternatives to the Alternatives

In an issue brief released today by Food & Water Watch, the national consumer advocate highlights the importance of creating alternatives to Gross Domestic Product (GDP) that do not facilitate the financialization of nature. The brief, And the Value of Nothing: Alternatives to Gross Domestic Product and the Financialization of Nature, explains that GDP was never intended to account for distribution of wealth, quality of natural resources and schools, and other factors that measure the overall health of a society.

"Relying on market-based schemes to protect the environment and fight climate change is misguided and it will have serious repercussions in the future," said Food & Water Watch Executive Director Wenonah Hauter. "Consumers must be diligent in monitoring the decisions of policymakers who seek to financialize our public resources."

While economists promote many alternatives to GDP, the most prominent alternatives attempt to impose market values on common resources, which would lead to their commodification. But these recommendations do not offer solutions to the problem of GDP; they merely extend its parameters to include our priceless resources. Pollution trading and water privatization are concrete examples of these misguided efforts to apply market mechanisms to environmental problems.

"The idea that you can correct the damage caused by the spread of markets by expanding markets even further is misguided," said Mitch Jones, director of Common Resources at Food & Water Watch. "We shouldn't try to counter neoliberalism with some sort of left neoliberalism."

In the wake of a major economic crisis fueled by the deregulation of Wall Street and riddled with staggering unemployment statistics, state governments and economists have been pursuing alternative means to GDP. Unfortunately, many of these alternatives would aid aggressive efforts to financialize nature and profit from privatizing resources that should be managed by the public.

Two prominent alternatives to GDP, the Index of Sustainable Economic Welfare (ISEW) and the Genuine Progress Indicator (GPI), are actually more of an expansion of the philosophies of GDP that extend their indicators to include non-market values.

From water markets to pollution markets, Wall Street has its ambitions set on expanding into new and newly profitable areas. These alternatives to GDP will facilitate the financialization of nature, placing our essential, common resources under the power of Wall Street bankers.

Putting a market value on resources like water comes with large repercussions. For example, in 2012, natural gas companies seeking water for hydraulic fracturing outbid farmers. The result was that the oil and gas industry froze out farmers from access water for agriculture.

The financialization of nature is the process of replacing environmental regulation with markets. In order to bring nature under the control of markets, new commodities need to be created by the commodification, marketization and often privatization of our common resources. It is a means of transferring the stewardship of our common resources to private business interests.

And the Value of Nothing: Alternatives to Gross Domestic Product and the Financialization of Nature is available here: https://documents.foodandwaterwatch.org/doc/ValueofNothing.pdf