It was interesting to see former New Zealand Prime Minister Helen Clark pop up in the news again this week. I had not realised that she had been taken on as the head of the United Nations Development Programme (UNDP). It appears to be the privilege of the elite band of left-wing politicians whose careers as elected representatives can no longer be sustained to be given a lucrative job in a body that is not remotely accountable to the people it purports to represent. It is, nevertheless, a relief to know that, as prime minister of a country eight times the size of Hull, she managed to become (according to Forbes) the 20th most important woman in the world but now she is in charge of the development of seven billion people across the world in the UN’s third highest position she is only the 60th most important woman in the world.
The UNDP held a forum this week entitled: ‘Beyond GDP: Measuring the Future We Want’. What they actually mean, of course, is ‘measuring the future the UN wants’. The best way to ensure that we get the future we (the people) want is to have a free market, governed under the rule of law, with good protection for property rights (including, where appropriate, property rights for environmental goods). The seven billion people in the world all want a rather different future from each other. We can only achieve those different aspirations if we are free.
That is not to say that an argument cannot be made for the subsidisation of, for example, education and health care for the poor and for other forms of assistance through government. However, the success of the human race as a whole cannot and should not be measured by some kind of unified aggregate index.
Specifically, Helen Clark has proposed that the UN develop an index that combines: ‘Equity, dignity, happiness, sustainability’ arguing that ‘these are all fundamental to our lives but absent in the
It is just about possible, nevertheless, to make a coherent case for measuring
We can also look at other statistics such as working hours, travel time, leisure time, carbon footprint (if it is thought necessary), and so on, to obtain a more comprehensive picture if we wish. However, once we try to produce an aggregate index of everything that is important, the index will lose all meaning. How can we trade off a small increase in reported happiness for somebody in Zambia for an extra £500 a year of national income per head in New Zealand? How can we trade off a tiny change in the Gini coefficient in Rwanda with a small change in the stability of marriages in India, and so on? These things have completely different values to different people.
Even trying to track one of these datasets is problematic. As the IEA’s monographs on happiness economics showed, well-being measures are suspect. There is no clear indication of a relationship between reported well-being and almost any other reasonable indicator of social progress.
Overall, we have the biggest folly imaginable: the body that some would desire to be a world government attempting to measure in a single index number everything that matters to everybody. It matters a lot to me that supranational bodies do not do this sort of thing; it also matters a lot to me that retired politicians are not given well-paid jobs in such agencies. Will these things be included in the index? Of course, they will not. Personally, I find the following quotation from Hayek’s Nobel Laureate lecture more convincing: ‘We know: of course, with regard to the market and similar social structures, a great many facts which we cannot measure and on which indeed we have only some very imprecise and general information. And because the effects of these facts in any particular instance cannot be confirmed by quantitative evidence, they are simply disregarded by those sworn to admit only what they regard as scientific evidence: they thereupon happily proceed on the fiction that the factors which they can measure are the only ones that are relevant.’