[OPE] Stiglitz's wellbeing indicators: the case of infant mortality

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Mon Feb 18 2008 - 19:30:50 EST

Save the Children has a report just out http://www.savethechildren.org.uk/en/docs/saving-childrens-lives.pdf Every year 10 million children still die before their fifth birthday, 99% of them in the developing world. That is equal to a world war in terms of annual deaths. The Marxist Ernest Mandel wrote in 1993 that "According to the statistics of UNICEF,every year 16 million children die from hunger or curable diseases in the third world. This means that every four years there is an equal number of deaths of children as all the deaths of World War II, Auschwitz, Hiroshima and the Bengal famine combined. Every four years a world war against children, every year 16 million children die from hunger or curable diseases in the third world". www.marxsite.com/Socialism%20and%20Futureplus%20Neoliberalism.pdf There has been progress since that time, but the problem stays devastatingly big.

The BBC comments in a somewhat sexed up way that, using their "Wealth and survival" index, UNDP statisticians http://www.undp.org/  calculate more than half of the babies who die in Angola could be saved, were the country to spread its wealth more fairly. 

The story is that poor countries should be more egalitarian, share the poverty around more fairly as it were, to save lives. Some of the poorest countries in the world - Nepal, Malawi, Tanzania and Bangladesh - are actually among the top ten performers in this index, showing success in reducing mortality. But India, the fastest growing economy in South Asia, lags well behind its poorer neighbours. Some states in India, including Orissa, Rajasthan and Bihar, have child and maternal mortality rates that are among the worst in the world.

The general idea that comes out of this is that although your GDP might be rising, a lot of people die anyway. But that is not especially news. GDP can rise even if unemployment rises, and so on. The real problem is that GDP data, as Stiglitz admits, tells you almost nothing about the distribution of real incomes in society, apart from providing compensation of employees and operating surplus by sector. The income and outlay accounts are likewise an abstraction from reality. 

It is of course true that economic growth is not the be all and end all of human life, but the important intellectual problem is that the conditions for economic growth, and the distribution of income and wealth, are being mystified. The point is that "economic growth" hardly means human progress, if the newly created wealth is concentrated in just a few sectors and owned mostly by a small elite, and if more and more of gross product is exported, while the incomes of the local population producing it remain stagnant or even fall, and their quality of life is miserable.

Why does the mystification occur? Essentially because vastly more money is nowadays made from trading assets, than from activities that create more jobs for people making tangible new things that improve the quality of life. The very fact that this is so, effectively puts the boot into all the conventional economic theories - it defies conventional economic thinking. Conventional thinking is that to reduce poverty, you need economic growth, and to increase economic growth you need the market to expand. But in reality markets expand without a proportional increase in value added and new real output, and without a significant spreading of wealth, and the poverty stays, with all that implies.

>From there, the apologia can go all sorts of ways - economic growth is not important, marketisation is not an answer, poverty is not such a bad thing, we should all go green etc. De Soto came close to an answer when he pointed to property relations in a class-divided society. The essence of the thing is who owns what and who has access to what, and how that comes about. That is what Marx was talking about. 

The Steve Miller Band did a song once with the line "Time keeps on slipping into the future". Nowadays credit makes it possible for property-owners to claim the wealth produced by poor people before they have even created it. The consequences of present consumption can be displaced in space and time, to the point where it is incomprehensible where wealth originates. That is the problem.

I had a conversation recently with an English gentleman who opined that Western youth could obtain the goodies of life far too easily. They expected to be paid very well for very little effort at all. "I had to work five and a half days a week for my money", he said. Point is that Western youth get away with this, because faraway somebody else is slaving away in a factory or on a farm to produce the goods that make it possible. The "money for nothing and your chicks for free" mimicks speculative profits.


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