Wednesday, 30 April 2008

Has increasing GDP improved the USA's Quality of Life?

I’ll start by apologising for the gap in this blog – I am still unsure whether it’s worth the time and effort given the conflicting demands on my time, so would welcome feedback from any readers, positive and negative. (So far, it’s been exactly 50:50, but from a small response rate.) A second reason for my absence from the blog has been a physical absence – I have been in the USA. So what did I bring back apart from the obligatory Obama’08 T-shirt (and a nasty cold from the plane)?

I have been reflecting on the environmental impacts and benefits of differing living styles. It is increasingly striking me that in wealthier countries GDP has become de-coupled from quality of life. Fifty years ago, had I returned to Europe from the States I would almost certainly have been enthusiastic about their greater material wealth: most families having cars, refrigerators (and even a few with home freezers!), and being able to eat out inexpensively at roadside restaurants. Sure, I might have been slightly bemused by Americans’ love affair with the atomic age, but it would be clear that this was the direction everyone was moving. Cheap and plentiful oil was fuelling the nation to a standard of living unheard of elsewhere. Bill Bryson captures this sense of optimism in his autobiographical “The Thunderbolt Kid” which makes excellent airplane reading[i].

Roll forward 50 years and the experience has perhaps gone just a little sour. Americans are still more upbeat than most Europeans; although I’m not sure it’s optimism – there does seem to be a need to be constantly reminding themselves that America is the world’s greatest nation. And of course, in resource use, it is the world’s greatest nation; in other ways I’m not so sure.

Let’s look at just a few of the ways in which the US GDP exceeds that of Europe:

  • More and larger private cars. This is an immediately obvious difference, with a direct impact on the average per capita energy consumption and emissions of CO2. In part this reflects the greater land area of the country, and so congestion tends to be not as bad as in Europe despite the higher car numbers in most of the USA. But this is at the expense of a huge land take from the freeway system (and allied roads) with noise blighting many homes, and the near abandonment of some areas on routes since bypassed by newer highways. Of course, if you want to see real congestion, you need to travel to the rapidly developing economies of Asia or Latin America.
  • But are larger cars better? Certainly they add to GDP (all that extra steel and chrome, not to mention oil being guzzled). But to take an extreme example, compare a Hummer to my Honda (of a model not sold in the USA). The capital cost and pretty well everything else about the Hummer will be around 3 times my Honda, as will its contribution to GDP. But does the driver get three times the facility? I suspect not. (I have never driven one; I did hire a Pontiac this year and found that in some respects it was far inferior to my normal car – I had this vague sense of driving a silver blancmange with that had its own desire to stop at all of America’s many gas stations to be refuelled.)
  • More and larger meals – especially at restaurants. It is said that you can never go hungry in America, with every type of “dining experience” available almost anywhere. Certainly food is cheap; but it’s not always of high quality (and rarely meets expectations raised by the descriptions on the restaurant menu, except perhaps for US beef.) That’s partly because, compared to European food, it’s still full of additives – guar gum thickening everything and waxed fruit are two of my personal dislikes. Visit a large supermarket and try and find natural yogurt with no flavours, thickeners or preservatives – I couldn’t find it. (Actually US supermarkets are an enigma – they are always well-stocked with copious quantities of everything – but no customers. When do Americans shop – after midnight; most stores are open 24 hours after all)? Or is that one reason for additives: food has to have a long shelf life as Americans eat out more or buy snacks from the gas station to survive. But the downside of this quantity over quality can be seen everywhere – obesity. The USA has a time bomb strapped the waists of its citizens – no longer does the US diet create the world’s healthiest and longest lived population. Again, I question whether more food adds to the experience[ii] – or just to GDP?
  • More money spent on healthcare. America should have the best healthcare in the world - and probably does, if you can afford it. In contrast European state-funded systems may not reach the heights of the US system, but are at least reasonably universal.
  • More lawyers, policemen (and felons)... Probably enough said – crime is one of the silent contributors to GDP through the need to replace assets funded via the insurance system. And although I may have had a cousin who worked for the NYPD, I remain amazed at the numbers of US police (and forces – even Washington Zoo seems to have its own police force!)
  • And finally more guns and a bigger military presence – definitely enough said on this one.

In case you think this is a typical liberal European’s anti-American diatribe, I should add that I love America (in small to medium doses) and have many fine American friends, with some of whom I agree to disagree on energy policy and global warming. But I do feel that America has lost its balance, and that the higher GDP no longer relates to a higher quality of life.

Economists sometimes refer to this as the Easterlin paradox: as countries GDPs grow, on average their population fails to become happier, although richer people tend to be happier than poorer people in the same country. And there is an important lesson for those of us who suspect that our current level of consumption is unsustainable: we may be able to shrink consumption (especially energy) and GDP in a way that does not make people feel less well off. This may be one of the challenges that we face in the next 20 years – how to manage citizens’ expectations in a process of contraction and convergence.

[i] Bill Bryson may be a bad choice as he recognises that the USA is no longer the “promised land” and lives permanently in the UK, chairing the Campaign to Protect Rural England

[ii] I ate in a great little restaurant, The Village, on Chincoteague Island, Virginia. The flounder with crab imperial is truly recommendable – but if you’re a European ask for one serving with two plates: psychologically unable to leave good food on the plate, I found it very hard work to finish the meal. At least there was a 15 minute walk back to our hotel – but being in the USA there was no sidewalk (pavement) and no street lights either.