Coulter, J. E. (2019). Reckoning GDP by Counting Chemical Bond Exchanges. Solutions 10(3): 7-15. https://www.thesolutionsjournal.com/article/reckoning-gdp-by-counting-chemical-bond-exchanges
Envisioning
Reckoning GDP by Counting Chemical Bond Exchanges
In Brief
by John E. Coulter
I
n managing how the world should work, an influential article in Nature led with the statement that “Gross Domestic Product is a misleading measure of national success” and urged countries to “embrace new metrics”.1 As reported in this journal, there has indeed be a move by many countries and provinces to seek more realistic data on sustainability.2 A solution to identify key factors serving wellbeing is in the combining of science and economics to measure all activities by the changes in chemical bonds made. From the simple act of breathing, up through the refining of metals, to complex manufacturing and what a whole country produces, the aggregate of oxygen-oxygen bonds exchanged for an oxygen-carbon bond is an insightful indicator of work done. As shown in the graphs leading this article, the poor performance in production in the US 2001-2010 can be identified objectively in science but was hidden in dollar-based National Accounts until after the crises of 2008. The wealth of nations has been mused since the reign of Solomon. Chests of gold and silos of grain were the early measures, and the advent of national accounting in the USA 80 years ago soon led to a movement within each country having buildings of staff working on their GDP. Leaders across the spectrum of polities hope to placate constituents with news of GDP growth even if not reflected in infrastructure and social fabric. GDP data shines even with and especially if reckless growth results in more pollution cleanups and increased health costs. Money management becomes
unhinged from the real goods and services that money is supposed to represent, and “making money” sinks into to “making-up money”. Backlash in the form of a search for a new economic paradigm3 has led to attempts at Green GDP and the Genuine Progress Indicator. China published Green GDP data in 2006, embarrassing provincial leaders to the extent that it was not published in subsequent years, even though an army of public servants collect data and present a Green GDP Report which is not released.4 The Genuine Progress Indicator (GPI) can show what many people feel—that they are no better off in general wellbeing than twenty years ago, even though GDP would suggest otherwise. The GPI is now an official instrument for policy planning and management in some regional governments, and is proving a useful tool.5 However the basis for the index relies on surveys, interviews, and people’s perceptions, and not on the hard facts of financial records. To tie financial accounting down to what is really happening, attempts are made to link to science. The First Law of Thermodynamics can be comprehended as the conservation of matter and energy. In practice a good representative of finite matter is gold. Various attempts at linking a nation’s money to gold have been tried, most responsibly by Great Britain and then the USA, but no country has been willing to try in the last 50 years. Energy is a more malleable concept, yet said to be conserved (indestructible) and therefore applied as a measurement of economic activity. During the energy
Measuring production in money leads to the production of more money and less wellbeing across a country. Money is a moving measuring stick. An objective, science-based account of economic activity reveals major problems hidden in claims of GDP measured in dollars. Wealth and income are measured in money, but output, as contribution to a community, and subsequent worthiness and wellbeing, demand a more objective assessment. Managing financial systems inevitably leads to gaps between who does work and who benefits. Work is a real concept in economics and science. Dissatisfied with accounting in money terms, one avenue pursued to assess levels of economic activity is energy analysis. This paper takes steps back in science to address the physics of force and work and identifies the electromagnetic force stored in the chemical bonds of oxygen, triggered as available to do work by carbon bonding, as a useful universal metric for economic activity, serving as a backdrop to check GDP growth. Calculating work done applies at any scale in any situation, from an individual climbing stairs to global GDP, all based on oxygen bonds gulped and broken. Viewing capital as a history of embodied work done, a graph of purposive oxygen bonds broken on Earth 1750-2017 covers at a glance the sum of human endeavors. All human activity fits within that framework and zooming in on economic analysis at any scale forces acknowledgement of boundary constraints. Increased entropy has nowhere to hide.
www.thesolutionsjournal.com | Summer 2019 | Solutions | 7