IF THE CENSUS IS the first minotaur at the heart of the maze, deciding what raw data are gathered and in what categories, the United Nations System of National Accounts is the second minotaur. It chooses from this data, as well as from a river of ongoing economic estimates and transactions, to calculate the gross domestic or gross national product. An accounting system based on the assumption that monetary exchanges are pretty much the whole ball game, the UNSNA was universalized for worldwide application in the 1950s by a U.N. task force headed by a British economist, Sir Richard Stone. This accounting system gained the authority of use by the World Bank and other financial institutions that are lending agencies, investors, and aid-givers: the “haves” in a world of “have-nots.” Its guidelines became the general accounting principles determining what is and is not included in a country’s GDP/GNP, a function whose importance is hard to overemphasize. To turn to Galbraith again: “The test of success in a modern economic society, as we all know, is the annual rate of increase in the Gross National Product. At least until recent times this test was unquestioned; a successful society was one with a large annual increase in output, and the most successful society was the one with the largest increase. Even when the social validity of this measure is challenged, as on occasion it now is, those who do so are only thought to be raising an interesting question. They are not imagined to be practical.”46

Information not included in the GDP/GNP, even if available as what is often called a satellite account—for example, the computations of the replacement value of homemakers, or the cost of air or water pollution in a particular year or area—is not part of the bottom line and is much less likely to be taken seriously. Even to break the information out of its computer nest may require a payment, thus restricting information to those who can afford it. Like the so-called “social audits” now done by some companies in response to questions on the diversity of their work force or impact on the environment, satellite accounts are a step forward, but they still don’t show up in the stock market pages, or within the accounting system that determines GDP/GNP.

This powerful UNSNA didn’t evolve entirely from the minds of Stone and his colleagues. In order to properly disrespect what we have been taught to respect, we might look at its origins. Understanding how narrowly and haphazardly it began shows how replaceable it is.

Economic theorists had been squabbling over how to estimate the income of “the People,” not just the government, since the seventeenth century when only agriculture was calculated, on the theory that it was the only enterprise that produced a net product after costs. There followed a century or so of debate over whether any services at all should be included or, as Adam Smith and Karl Marx argued, only those services directly related to the production, distribution, and repair of goods. As Smith wrote in The Wealth of Nations: “the labour of a manufacturer adds, generally, to the materials which he works upon, that of his own maintenance, and of his master’s profit. The labour of a menial servant, on the contrary, adds to the value of nothing.”47 You can imagine what he would have said about homemakers.

By the 1920s, governments had taken over from private scholars and theorists this function of measuring national income, with all the conflicts of interest that this implied. Even the most market-oriented monetarist countries included some items whose value had to be imputed (for instance, dweller-owned housing), thus proving they were able to value nonmonetary transactions when they wanted to. But neither the value of the natural resources being used nor the unpaid productive work done mostly by women made it into the mainstream discussion. By the 1930s, the Depression had so sobered this country that the U.S. Senate decided to find out what the national income really was, and gave the job to a brilliant statistician named Simon Kuznets. The report that resulted acknowledged its male staff members by name but thanked its equally experienced female staff in a nameless clump, a good indication of how women’s work fared within its pages.

To be fair, Kuznets later criticized the government’s refusal to measure such things as subsistence farming as a cheaper source of nutrition, but as a statistician, he, too, was spurned by some of the academic economists. He later won a Nobel Prize for opening an era of measurement, not just theory, and he remained critical of an accounting system that told so much about where the money was and so little about how people were actually living. Nonetheless, his idea of “devising a single yardstick (of nutrition, warmth, health, shelter, etc.)”48 remained a dream. Other valuable lessons learned during the Depression—for instance, people’s survival through subsistence farming and a barter economy—didn’t show up in the Senate’s figures at all. Neither did the fact that bank loans made on character and past performance were more likely to be repaid than those based on collateral.

In the late 1930s, Richard Stone entered the picture as a coauthor with John Maynard Keynes of a paper entitled “The National Income and Expenditure of the United Kingdom, and How to Pay for the War.” The uniform accounting system Stone eventually advanced in the 1950s had its roots in these limited definitions, and in the wartime system of paying for the huge costs of arming England during World War II. There was thought only of winning, not of accounting for the human or ecological costs of war, or the cost to the civilian population of diverting raw materials and productive capacity into the war effort. These are the crumbling pillars on which our complex system is built—and it is complex. While still in the U.S. Senate, Vice President Gore persuaded the Joint Economic Committee to hold hearings on cataloging all the economic formulas that would have to be changed to include environmental and natural resource costs in our calculations. (Needless to say, the human resources of unpaid productive labor weren’t included in this effort.) At a minimum, however, the principles Stone universalized are being recognized as limited, fallible, destructive, and out-of-date—even if they are still the only game in town.

It is the rising consciousness of environmental danger that has brought the values embedded in UNSNA into increasing question in the last decade, not the exclusion of a third to three quarters of all productive labor (depending on the country)—always overwhelmingly female labor. Like female production and reproduction, the environment has been regarded as conquered, unlimited, and free. Thus, the environment has no value in this worldwide accounting system. It doesn’t appear on the balance sheet at all. Consider these examples:

• A tree standing there giving us oxygen has no economic value—as an environmental asset for us or a home for other species—but the minute a paid ax strikes its bark, it acquires economic worth.

• Forests or other newly extracted raw materials aren’t being deducted from national assets, which is why recycled paper and environmentally smarter materials may seem to be more expensive. The true cost of new paper isn’t recorded.

• Water acquires a value if it is “employed” in production (for instance, if it arrives through a meter to sustain cattle, or over a water wheel to create electricity), but otherwise it has none—though the World Health Organization estimates 25 million deaths per year from waterborne diseases, and lives lost by lack of water are incalculable.

• The cleanup costs of polluting a river, injecting pesticides into the groundwater, or putting noxious gases into the air have not been figured into the cost of the manufacturing or agribusiness that put them there in the first place. Historically, the economic incentive has been to pollute.

• Current toxic waste sites will cost $400 billion to clean up over the next thirty years, according to a 1993 estimate by the Departments of Energy and Defense. Since the GDP/GNP will include that amount on the positive side, and environmental damage doesn’t turn up the debit side, this will actually come out as an economic boon.

• Clearing, selling off, and building roads into the Amazon rain forest was counted as “development” and financed by the World Bank and its agencies* —with no resource depletion on the other side of the ledger and no value attributed to one of the world’s last rain forests as an asset for climate and pollution control, medicinal plants, species diversity, and much more.

When environmental costs are deducted from the GDP/GNP, there is a whole different picture of progress. For example, in Costa Rica, the World Resources Institute calculated that in the past twenty years, natural resources worth one entire year’s GDP have been lost.49

But the old economic values grind on. The air you’re breathing and the grass outside your door have no value, but the concrete and asphalt do; safe driving has no economic value, but a car crash enriches the GDP/GNP; the work generated by an oil spill makes the GDP/GNP grow, as do the claims the oil company may pay out, but the damage done to the sea and its species, and therefore to a balance crucial to us, is economically invisible.

Mind you, fixing any of the above isn’t impossible. If you can imagine a world in which value is attributed to natural resources, it can be created. If it sounds logical that a television manufacturer should take back your old set and recycle its materials, then it can be done. If environmentally skilled engineers and architects can now create modern buildings with materials that are entirely biodegradable, then it’s been possible for a long time. (And it is possible, you know. As environmentalists say now and indigenous cultures have always said, the waste of this generation must contribute to the food of future generations.) If we figure out the real cost of what we buy, its damage will begin to be self-limiting. According to the World Resources Institute in Washington, for instance, a gallon of gas would cost 400 percent more if pollution, waste disposal, health impact, and the costs of defending foreign oil fields were figured in. A study of the University of California at San Francisco showed that each resident of the state was paying another $3.63 in hidden health care costs per pack of cigarettes. If women control reproduction, the cost to our health and bodies causes us to limit and space births—as cross-cultural experience shows—and to replace, not exponentially increase, the voyagers on this spaceship Earth.

A different world can be created or re-created—but not until we stop enshrining the economic values of invisible labor, infinite and obsessive growth, and a slow environmental suicide.

There have been rhetorical steps forward. Change has to be imagined first. At the 1992 Earth Summit in Brazil, 178 countries supported Agenda 21, thus agreeing to include environmental costs and benefits in their GDP/GNP measurements; a statement of great importance for its intent, though there is still little research and less agreement on how to go about it. Thanks to fervent lobbying by international women’s groups, a limited but important pledge of women’s role in environmental decisions, and of counting women’s work, was also included.* On Earth Day, 1993, President Clinton ordered the agencies of the U.S. government that calculate the GDP to begin this process of including the environmental costs and benefits. Growing up like grass around the old concrete of the GDP/ GNP values, there are also alternative measures. Guidelines for calculating environmentally adjusted and sustainable national income have been given in the 1993 Handbook of National Accounts issued by the U.N. Statistical Office. There are also the Physical Quality of Life Index and the Measure of Economic Welfare, both of which have been around as extra indicators for two decades. In the wake of the Amazon rain forest damage, even the World Bank has been under such pressure from environmental groups that it began in the late 1980s to include an environmental assessment unit within each of its regional offices.

But so far, as homemaker Carol Lees pointed out when she was offered an alternative process to “sample” homemaking work in Canada, those are still optional satellite events, not transformations of the main system. Right now in the United States, systemic values still count education as an expenditure, not an investment; don’t make the connection between prenatal care or inoculations for children and economic development; and are generally far more likely to reward investment in things than in people. The term “infrastructure” is taken seriously because it applies to highways and sewer systems, but it could also be applied to prenatal care and child care, the educational and health care systems. When public education benefits by comparing it to highways—but not vice versa—that in itself reveals values.

Yet our system of national accounts is so limited to a profit psychology that even the physical infrastructure isn’t counted as an asset. This in turn has discouraged maintenance, and left it in bad shape, not to mention leaving our national budget askew. As futurist Hazel Henderson wrote, with her gift for making the complex understandable: “we need to account for our country’s infrastructure on the books, so as to have a national ‘net worth’ statement, just as companies do. As we try to cut the deficit, we need to be sure that we have a correct account of it. If our infrastructure is not included as an asset, we may actually cut too deeply.”50

Most pressures are still on the side of accepting the values of the UNSNA—especially because old Cold War tensions are being translated into fear of international economic competition whose very language is like an alternate form of warfare. There is no such effort toward saving the environment. In overdeveloped countries where current values and accounting systems originated, many of us have been persuaded that they’re the most advanced or even the only ones. In developing or more agricultural countries where such systems have been imposed—for instance, formerly colonized countries left without the industrial capacity to process their own raw materials, or indigenous cultures that are isolated inside industrial nations—loans and investments are dependent on earning the cash to repay with substantial interest, instead of creating satisfying, balanced, sustainable ways of living.

Fatima Mernissi, a feminist and sociologist from Morocco, writes about the view from outside this system:

The new imperialism that dominates us, the non-Westerners, no longer appears as physical occupation. … It is more insidious—it is a way of reckoning, of calculating, of evaluation … of consuming, of buying. The multinational corporation forces us to make diagnoses, prognostications, and programs according to its models. The vocabulary that we use for our national budget is its language. … The West, “drugged with growth,” projects its present into the future and forces us to realize that, in order to take up its challenge, we must fight on the grounds that it has chosen: the present.51

* The biggest single source of loans for international development, and the main link between the world’s overdeveloped countries (where most of the top 20 percent of the world population lives and receives 82.7 percent of its income) and its underdeveloped countries (where most of the bottom 20 percent lives and gets 1.4 percent of the world’s income). Created at the Bretton Woods Conference in 1944 as part of the post–World War II economic order, the World Bank has always been headed and headquartered by the U.S. and dominated by the U.S., Japan, Germany, France, and the United Kingdom.

* Among the goals stated by Agenda 21:

“Countries should take urgent measures to avert the ongoing rapid environmental and economic degradation in developing countries that generally affects the lives of women and children in rural areas … women should be fully involved in decision-making and in the implementation of sustainable development activities. …

“The integration of the value of unpaid work, including work that is currently designated ‘domestic,’ in resource accounting mechanisms in order better to represent the true value of the contribution of women to the economy using revised guidelines for the United Nations System of National Accounts, to be issued in 1993.”