A Story About Economic Growth and the Quality of Life

Anton and Marti once owned a small three hectare farm where they worked hard to be self-sufficient. They grew as much their food as they could. Their two children also helped out. They had a rich home life – but they were not good for the nation’s business because they consumed so little.

However, one sad day, Anton and Marti realised they could no longer make ends meet, especially with increasing medical and education costs for their children. So, Anton found a job in the city, over 100kms away. He borrowed money to buy a car to drive to work each day. The cost of the car and the weekly petrol bill all added to the nation’s GDP.

Anton worked very long hours and, increasingly, stayed in the city overnight to avoid driving home. He also started drinking more often. The costs of his beer and hotel bills were also added to the GDP.

Two years later, Marti asked Anton to leave the family because his absences and bad city habits were disrupting the family. The lawyer’s fee for the divorce was added to the GDP – as was the rent that they were now paying on two apartments after they sold the farm and the cost of a car for Marti and the children.

The people who bought the farm built some townhouses and sold them for $100,000 each. This resulted in a spectacular jump in GDP.

Two more years passed by.

Then, after work one day, Anton and Marti met. After having dinner a few times, they decided to live together again. They gave up their apartments, sold one of their cars and moved back to the country.

They lived in a small barn on a farm owned by Marti’s family, and started to renovate it themselves. They lived frugally, watched their money, started to grow their own food, and learned to live as a family again.

Guess what?

The nation’s GDP registered a fall – and many economists would say that we are now all worse off!

Source: Adapted from Adbusters Quarterly, 1 (4), p. 74.