Spring 2010
Letters to the Editor

Comments from readers about how we measure society’s progress, ads that watch you, and protecting birds in the city

Welfare Indexes Are Unconvincing

Kurt Kleiner does a splendid job of knocking gross domestic product (GDP) as a measure of welfare. However, he does not really explain why welfare indexes, such as the UN’s Human Development Index or our own Canadian Index of Wellbeing, are unconvincing to economists – who then resort to GDP, imperfect though they know it is.

The problem with welfare measurements is not the choice of what to include in the index. After all, the mighty GDP itself does not count every last market transaction that takes place. There are simply too many. So GDP is calculated by sampling − taking a “basket” of economic interactions and multiplying their value by the number of times each of them takes place (which is itself an estimate). GDP is a selective, sample-based measure, not an actual count, and exactly the same procedure could be applied to welfare measurements. Why don’t we do it, then?

As Kleiner hints here and there, the problem with welfare measures is the weighting − the relative importance attached to any given item in the index. This is not just a technical issue; it is the core of the problem. If education in my community improves but the life expectancy of people in Nunavut declines, what happens to the index? This is another way of saying, how important is my children’s schooling compared to the health of people in Iqaluit or Kugaaruk? Any answer is subjective, so that movement of the welfare measure is arbitrary. You can get the opposite answer by changing the relative importance of the two measurements.

The strength of the GDP measure, for all of its other faults, is that the relative importance of goods and services is already known: it’s their price. If a haircut costs 10 times more than a tin of beans, and we produce 20 fewer tins of beans and one more haircut, our GDP falls. There is no ambiguity here, no subjective evaluation, no doubt.

In many ways GDP is a flawed and misleading number. But, within the limits of human ability, it is not arbitrary, and economists and politicians and journalists will keep using it until welfare indexes can be based on firmer foundations.

My fellow economists know that these firmer foundations exist, by the way: they’re called “welfare equivalences,” but I am not aware of attempts to transform their principles into operationally feasible procedures.

Francesco L. Galassi
BA 1981 UC, MA 1982, PHD 1987

A Chilling Scenario

The Ads Have Eyes” (Winter 2010) describes a new technology that can track how many pairs of eyeballs are looking at onscreen ads. The system can also make a stab at identifying the gender and age of onlookers. According to one of its creators, it will not be Big Brotherly intrusive.

We shall see. It isn’t too far from counting anonymous eyes to the chilling scenario depicted in the film Minority Report, where digital scans of everyone’s eyes are kept on file and known to every business and, of course, the police.

Do we really want our every glance monitored by Coca-Cola and Harvey’s so they can make another buck? Even if Tom Cruise’s character in the movie had not been wanted by the police, he might still have wanted to swap out his eyeballs in exchange for a little privacy.

Geoff Rytell

Unspeakable Mistreatment

I find it shocking that John Allemang’s outstanding profile of author Denise Chong makes no mention of the unspeakable mistreatment of Falun Gong practitioners in China over the past 20 years.
I believe Canadians and people throughout the world should condemn the torture inflicted by the Chinese government on these innocent, peace-loving persons. It is our duty if we wish to vigorously uphold the principles of human rights everywhere.

Dr. Abraham L. Halpern
MD 1952
Mamaroneck, New York

Protecting the Birds

For those of us who obtained our architecture degree while working in a building unsuited to that practice, the renovation of the John H. Daniels Faculty of Architecture, Landscape, and Design, featured in the Winter 2010 issue, is welcome.
However, environmentally friendly or LEED-rated buildings should not be confused with being bird-friendly. Judging by the rendering in the magazine, there are no assurances that the building’s facade will be bird-friendly.

Every year, almost a billion birds are killed when they strike buildings, primarily due to reflective glass. The City of Toronto Bird-Friendly Development Guidelines, for which Toronto received a Canadian Urban Institute Leadership Award for City Initiatives, was to become mandatory at the end of January.
I look forward to learning of the strategies the architects will employ to achieve bird-friendly status for the refitting of 230 College Street.

John Robert Carley
BARCH 1974

Reader Comments

# 1
Posted by Skeptic on March 17th, 2010 @ 9:54 am

Forget GDP, I’m in favour of GNH – Gross National Happiness. Let’s all move to Bhutan.

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