ISEW is crap

John Clark (
Sat, 5 Sep 1998 01:32:03 -0400

Hash: SHA1

J. Maxwell Legg Wrote:

>GDP measures the "goods" but not the "bads." That's why ecological
>economists have developed their own measures of economic welfare.
>The three graphs on this page show the GDPs of the US, UK and
>Germany all heading merrily upward from 1955 through the 1980s.
> However, a more accurate measure of economic progress, the
>ISEW (Index of Sustainable Economic Welfare) developed by Herman
>Daly and John Cobb in 1990, tells a very different story. When some of
> the "bads," such as pollution, depletion of non-renewable resources
>and car exhaust-related health costs are factored in, a radically different
> picture of the economy emerges.

How on earth can a simple calculation determine if something is "Sustainable" or not? What new oil reserves will we find? What new Tungsten deposits will be discovered? How fast will the demand for Molybdenum grow? What new technological breakthroughs will be made? Nobody knows, and to pretend we do by issuing a precise figure and giving it the pretentious name "ISEW" is ridiculous.

It GTE's worse. The ISEW includes data about income distribution and yes the way income is distributed is objective, but the ISEW subjectively determines that any variation from pure equality is bad and it puts a precise figure on exactly how bad.

ISEW babbles about environmental damage but again, this is purely a matter of personal taste. The amount of money you would be willing to pay to live in a world that had .01% less Sulfur Dioxide in the air would probably be different from what I would pay.

I know I haven't convinced you and so you have an opportunity to prove me wrong and have vengeance against all those evil capitalists by becoming richer than any of them, just take your life savings and invest it. You know how wonderful the ISEW is and how it can magically tell when a resource will run out and what new discoveries will be made, this gives you a huge head start over the competition because most money managers think GNP is an objective and effective measure of wealth and they think the ISEW is crap. Let's see you put your money where your mouth is, and when you become richer than Bill Gates I'll admit you're right.

John K Clark

Version: PGP for Personal Privacy 5.5.5

iQA/AwUBNfDM0t+WG5eri0QzEQI32ACdHwlHDjSuUrX/w2N72wbvbTVDhOQAoO+A /isYG5dGBADZdJt2Q2W55PBe