An Inquiry Into the Definition and Measure of the Economy
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tt.q. Between Statistical lmperatives And Theoretical Obsessions: An lnquiry lnto The Definition And Measure Of The Economy Greg Ogle Thesis submitted for the degree of Doctor of Philosophy in the Department of Social Inquiry University of Adelaide June 2000 UT TABLE OF CONTENTS Title Page i Table Of Contents..... u, List Of Tables.........._ vt vi Absract vul Declaration TX Acknowledgments x Introduction: The Offt,cial Story and the Unoffi,cial Thesis. .... I Production I Different Offrcial Definitions . 4 Outline of Thesis.... SECTION 1: IN THE MARKET FOR A DEFINITION 13 Chapter 1: The Unofficíal History of the Officíal Story 15 The History of '?roduction" 15 The Neoclassical Moment.. 2t The Keynesian Moment 25 Epistemolog........... ..29 Standpoints. 34 ..37 Chapter 2: The Inlvísíbilìty ol Women's Work in 'The Econorny' 39 Feminist Arguments ......39 Valuing Women's \ilork........ ......46 Australian Estimates ......48 Market Centrism ......54 Conclusion ......58 Chapter 3: Femínist Debates about Accountíng for Women's Work Problems with the Extended Accounts Time Based Alternatives Household Time Use and the Politics of Measurement Socialist Feminist Parallels.... Domestic Labour Debate ... Post Domestic Labour Debate Formulations Conclusion ....... Interlude: Environmental Parøllels. Defensive Expenditures and Environmental Costs . GDP as a Welfa¡e Measure Critiques of Valuation Conclusion TV SECTION 2: CROSSROADS - EMOTIONAL LABOUR 99 Chøpter 4: Emotional and Etnbodied IOI Household emotional labour....... 101 Emotional Labour in Paid Work 10s Differences, Definitions and Critiques 109 Importance of the Analysis..... Lt2 t14 rt7 More Than Commodity Production ....... 120 Difference From Commodity Production t2t Conclusion 123 Chapter 5: Measuring the Holograrn Problems in Measuring Emotional The Impasse............... The 'Value' of Emotional Labour. The Neoclassical Nexus SECTION 3: BREAKING THE NEOCLASSICAL NEXUS 143 Chapter 6: Breaking the Nexus I: A Restricted Definitíon of Productíonl4í Feminist Concerns... ................14S Marxian Definitions 149 Transaction Costs Emotional Labour.......... ..155 Problems in Transaction Cost and Marxian Frameworks ..157 What is the Purpose of Accounts?. ............161 Consistent Comparison... ............ 162 Making Women's Work Visible ............167 Conclusion ...........168 Chapter 6a: Empirical Estimates of 'Production 169 Existing Estimates.. ,169 Market Production .t7t Defining Non-Production Activities... ,.173 Estimating_ Market Production (Narrowly Defined).. t77 Household Production 180 Defining Non-Production Activities 182 Estimating Household Production (Nanowly Defi ned) 184 Combinõd Results...... ...184 Chapter 7: Breaking the Nexus II: Economic Welfare Definítions. Economic Welfare Indicators. Results and Implications Critiques Gendered Inequality........ 20 1 Wider Issues. Recognising Different Labour - Exchange l¿bour... Potential for Revised Measures v Chapter 7a: Revising the Estimates of Economic Welfare Gendered Inequality Adjustments.... Estimates and Results.. Other Structural Adjustments....... Exchange Costs Adjustments. Estimates and Resuls.. SECTION 4: CONCLUSION AND FOUNDATIONS 235 Conclusion..... ..237 Appendix 1: Døta for Restricted Prod.uct Estimates..... 245 Appendix 2: Further Data and Methodological Issues in the GPI Revisions.... ....247 Gender Wage Gap......... ......247 'Why an Index? .......247 The Data ,'.,..,248 TheIndex....... ,.,,..'250 Exchange Expenditures...................... ......252 Changes in ABS Industry Classifications.... .......252 Calculation & Raw Data........... ,55 Bibliogrøphy 257 v, LIST OF TABLES f.i Kushnirsky and Stull's Categorisation of Un/productive Activity 19 2.r Value of Unpaid'Work in the Household Sector 1987, 1992 50 3.r A Time-Based System of Accounts (UK) 65 6a.I Restricted Market Product and GDP 178 6a.2 Gross Household Product (restricted) 184 6a.3 Comparing Market and Non-market Production 185 7.1 Structure of the Index of Sustainable Economic Welfa¡e, 1990 192 la.I The Gender Inequality Index 218 7a.2 GPI Revised for Gender Inequality 2t9 7a.3 Exchange Expenditures 229 7a.4 Exchange Expenditure and GPI 230 41.1 Industry Product: Gross Value Added 246 A2.L Derivation of the Revised Distributional Inequality Index 252 ¡^2.2 I-O Accounts' Exchange Expenditure 257 LIST OF FIGURES 6.1 Shaikh and Tonak's Economic Taxonomy 150 6a.I Production: Restricted v GDP 180 7a.I Gender Revised GPI per capita 220 7a.2 Exchange Expenditure and GPI per capita 23r 4.1 Revised GPI p.c. Using Raw Gender W'age Gap Figures 247 4.2 The Inequality Indexes 257 V'I LIST OF ABBREVIATIONS ABS Australian Bureau of Statistics A}IA Australian National Accounts ANZSIC Australian and New Tnaland Standa¡d Industrial Classification ASNA Austalian System of National Accounts FIRE Finance, Insurance, Real Estate industries GCI [Snooks' ]Gross Community Income GDI [UNDP's] Gender-related Development Index GDP Gross Domestic Product GEP [konmonger' s] Gross Economic Product GFP lMaorian] Gross Final Product GHP [Ironmonger's] Gross Household Product GMP [Ironmonger' s] Gross Ma¡ket Product GNP Gross National Product GPI Genuine Progress Indicator HDI [UNDP's] Human Development Index ISEW Index of Sustainable Economic'Welfare MEW [Nordhaus and Tobin's] Measure of Economic Welfa¡e NBER [US] National Bureau of Economic Resea¡ch NIPA National Income and Product Accounts [US National Accounts] SEEA System of integrated Economic and Environmental Accounting SNA System of National Accounts TISA Bisner's] Total Income System of Accounts UNDP United Nations Development Program WRET Wholesale and Retail industries vut ABSTRACT This thesis inquires into the definition and measurement of the economy, critiquing the official statistics found in the national accounts and asking feminist, green and socialist questions about "the Australian economy". The "economy", as defined by the national accounts, is a reification of neoclassical and Keynesian economic theory. It ignores non-ma¡ket production, environmental costs and ecological sustainability. Yet, while extending the existing def,rnitions and measures might make women's work and environmental issues more visible, the market based approaches hide as much as they reveal about "the economy". This is particularly evident when emotional labour is considered. The analysis of emotional labour challenges the whole notion of work as an alienable product which can be measured. An altemative political economy which seeks to reflect these concerns faces either the co- option of its analysis if it relies on market measures, or marginalisation if it eschews measurement. Underlying this impasse a¡e the neoclassical definitions which equate the concepts of work, production, welfare, the market and the economy. Breaking this impasse requires breaking the neoclassical nexus. This can be done by seeing the economy as a hologr¿un: a metaphor which emphasises that what is seen in the economy is standpoint dependent. But with a hologram, the dependence on standpoint, and the existence of other perspectives, is highlighted, not hidden. Thus, the (unmeasurable) embodied nature of work can be seen alongside, rather than in contradiction to, measures of production and welfare. Similarly a focus restricted to the production of alienable goods and services does not usurp other views. It also allows for a more consistent comparison of market and non-market production, and suþgests that the latter is more important to the economy than even the (neoclassical) extended national accounts reveal. The green measures of economic welfa¡e also produce a different view of the economy and of economic growth, although these measures themselves could be improved by an analysis of gender [inequality] and the costs of ma¡ket exchanges. Yet such revised economic welfare estimates (like the revised production measures) remain market based. This limits the proposed measures, but, because they allow for some engagement with market economics, the proposed measures provide a bridge to more transformative understandings of political economy. ¿x DECLARATION This work contains no material which has been accepted for the awa¡d of any other degree or diploma in any university or other tertiary institution and, to the best of my knowledge and belief, contains no material previously published or written by another person, except where due reference has been made in the text. I give consent to this copy of my thesis being made available for photocopying and loan 'zAA Signed: Date: Ls I x ACKNO\ryLEDGMENTS This thesis would not have been possible without the friendly environment of the Department of Social Inquiry at Adelaide University, and without the support of Australian taxpayers who paid for the university, the Department and my ApA scholarship. Particular thanks to my supervisors. Chilla Bulbeck's comments on drafts were invaluable, and the final thesis owes much to her questions and suggestions. Ray Broomhill was personally supportive throughout the project, asked the right questions in important stages early on, but never attempted to control the project. Others who read and made valuable cornments on drafts of particular sections included chris Beasley, Nancy Jackson, Mike Donaldson, Mary Heath and two anonynous referees from the journal Environmental Politics. Thanks. And thanks to the people who proof-read and provided other logistical support in producing the thesis: Mary Heath, Chris walsh, Pam Papadelos, Shannon Dowling, Kate Lawrence,