I first heard about how much opium was produced in the Golden Triangle (Myanmar, Laos and Thailand) in the eighties - around a thousand tons at that time. When I made some rough estimates of how much money was involved, even allowing for 50% loss in distribution, I was amazed. In my innocence, I wondered how it could possibly be that the various authorities around the world, did not know about and trace that much money.
Co-incidentally, in the nineties I worked with a guy on a major UK IT project (for IBM) who had previously worked at UBS, the giant Swiss bank. He explained that banks were well aware of which accounts were used by the various drug cartels and their bosses. Lack of knowledge was not the issue. Perhaps there were other reasons not to close down the drug trade.
Fast forward to today and take a look at a recent (rather dry) paper coming out of the UK's Office for National Statistics. The Quarterly National Accounts for Q2 2014, bring us up to date with changes that have been made (across Europe) in the way that GDP is calculated.
Those of a cynical disposition will not be surprised to read that one consequence of the changes is that the figures show we recovered from the 2008/09 depression quicker than we thought and that growth is now better than we thought! How about that! What a surprise!
But what is really interesting is: where have these improvements come from? Well, you will be pleased to know that in the search for positive, wealth producing activities that can be included in our measures of national well-being, they have found two outstanding candidates.
Henceforth, the measure of GDP, by which politicians can reassure voters that they are upright custodians of our well-being, will include revenue estimates for the illegal drug trade and prostitution. To the tune of £11 billion annually.
When we include these estimates, we now 'know' that the UK returned to it's 2009 peak in 2013 rather than 2014, and that under it's current coalition government, cumulative GDP is up 7% rather than 5.2%.
For as long as I can remember, politicians have pontificated about GDP and how important it is to our standard of living. We must increase GDP. Even now, Osborne and co. are forcing austerity on the British people in a bid to hold down expenditure and raise GDP. They will do anything to raise the number and avoid a recession.
With this latest accounting gimmick it is clear that the establishment has become committed to increasing illegal drug taking and prostitution. It is inconceivable that in future, they would willingly take so many billions of pounds out of the equation.
No one seems to have asked if this form of GDP is good for society. Does such growth represent what we want for ourselves and our children. Is that the kind of world in which we wish to live?
If GDP had any worthwhile moral relevance, the estimates for illegal drugs and prostitution would be entered as negative values. As it is, their increase will really mean that society is worse off.
Posted by Nicholas Moore 10:59:40 pm