A Big Slice of Econ Pie

"The more money we spend, according to the GNP ... the better off we are," explains Eric Davidson in You Can't Eat GNP. The Gross National Product, or GNP in common parlance, is the cumulative value of products and services created and traded by a nation, and the traditional measure of economic well-being. Yet in the past decade or so, the flaws in this measuring system have become increasingly clear to a growing number of economists, social scientists, and other observers. As Davidson learned during his time as a Peace Corps volunteer in Zaire, not only does the GNP fail to account for the state of a country's health-care, education, and welfare systems -- it also fails to recognize the overall and long-term costs, environmental and otherwise, of producing goods and services.

You Can't Eat GNP is a primer for a new school of economics in which the economy is considered "a wholly owned subsidiary of the environment," in the words of Earth Day founder Gaylord Nelson. Under this rubric, environmental impacts must be considered not only in the abstract, but tallied up along with more tangible costs of doing business. Within this scheme, "natural capital," those goods and services that nature provides and humans cannot create, must be added to the balance sheet and treated as a valuable endowment or nest egg too precious to be squandered.

A soil scientist by training, Davidson's current research focuses on the relationship between agricultural land and forests, so he approaches the GNP with an ecologist's perspective. His whirlwind but trenchant tour of ecological economics seems to be aimed at readers not already familiar with these discussions. Those who have read Herman Daly, Paul Hawken, Amory and Hunter Lovins, Jane Jacobs, Alan Durning, Lester Brown, Robert Frank, or Juliet Schor, to name but a few, will probably find little new in You Can't Eat GNP.

Still, Davidson provides a good perspective on the field for newcomers, and he does not shy away from any of the hard subjects. In his overview, he tackles population growth, biodiversity, discount rates, global warming, soil erosion, forest protection, sustainable agriculture, and technology. In his final and most provocative chapter, Davidson makes what he calls "some modest proposals for profound changes" in how the world does business. In addition to asking readers to examine their own ecological impacts, he calls for the elimination of tax deductions for more than two children, an increase in consumption taxes, an end to subsidies that encourage degradation of air, water, and soil, and the signing of international agreements to protect natural resources worldwide.

While You Can't Eat GNP probably does not break any new ground, it presents a clear and cogent case for rethinking our measures of economic well-being and a sturdy introduction to the the principle that a health economy depends on a healthy environment -- a notion we can't afford to ignore.