What do heroin, “paper” coffee cups that don’t biodegrade for 500 years and Kim Jong-un’s smart new collection of intercontinental ballistic missiles have in common? The answer is that they all contribute to the growth of the economy.
Britain, since 2014, has counted heroin – along with crack cocaine, powder cocaine, cannabis, ecstasy and amphetamines – as part of measured economic activity. So if you take any of those substances, Britain thanks you. In 2014, these activities, plus paid sex work – which is also counted, though not for some peculiar reason if the sex worker is male – added nearly £10bn to the British economy.
Almost anything we produce, so long as we sell it, counts towards gross domestic product, the single-most important way we measure our economy. (Anything like housework or volunteer work, for which no one earns a profit, sadly counts for naught.)
The paid-for economy – the one we count – includes armaments, such as nuclear bombs, ballistic missiles and chemical weapons. It also includes the 2.5 billion supposedly disposable coffee cups (laminated with plastic) that we throw away in Britain each year, enough to circle the world five-and-a-halftimes. These cups contribute to today’s economic growth, even though our children’s children’s children’s children will be fishing them out of the ocean for the next several hundred years.
The key word, as I write in my book The Growth Delusion, in gross domestic product is “gross”. We take nothing away. From the point of view of GDP, the more we produce – of anything – the better (I almost called the book: ‘What’s so gross about gross domestic product?’). That goes for the financial derivatives that helped supercharge growth in the first years of the century – before the 2008 financial meltdown and the inevitable call on taxpayers to bail out the irresponsible banks. It goes for a bloated healthcare service too. In the US, healthcare is a huge contributor to GDP, making up about 17 per cent of the US economy versus only nine per cent in Britain. That is because it is far more expensive. Prices are inflated by private profit, a parasitical insurance industry, unnecessary procedures and litigation. For GDP, bigger is always better.
We take for granted that whatever is good for the economy must be good for us – often without really stopping to wonder why. It has not always been thus. Until the Fifties, the word “economy” did not appear once in a UK political manifesto with its modern meaning. Now it is almost inconceivable – though in these angry times not entirely out of the question – that a politician could stand up and say that she was going to make the economy smaller in pursuit of other goals.