GLOBAL CITIZEN: Count Nature, Not Money

Every month I get a kind of Readers Digest for people interested in the future. It's called Future Survey, issued by the World Future Society. Each month it contains about 50 extended summaries of recent publications about the paths -- economic, environmental, social -- we seem to be following.

The November 2000 issue, for example, starts with a review of a Cato Institute book called "It's Getting Better All the Time." American average life span rose from 47 years in 1900 to 77 in 1998. Median household wealth has doubled since 1965. The fraction of the population living in poverty is falling, as are teen drinking, drug use, and pregnancies. Relax and rejoice. Life is getting ever better.

Immediately following is a speech by Graham Molitor, vice president of the World Future Society, about a future of leisure. Robots will do more of our work; increased life expectancy and fewer child-bearing years will open half our lifetimes to pure fun. Cruise ships, luxury hotels, theme parks, and gambling are already booming.

But the next article by sociologist Stanley Eitzen documents the fragmentation of American social life. Personal bankruptcies are at a record high, hunger and homelessness are rising, 44 million people have no health insurance, American rates of poverty, murder, and imprisonment are the highest in the industrial world.

That may be why, going on to the next review, we are "Bowling Alone." The update of this book by Robert Putnam contains "data-drenched chapters" about declining political, civic, and religious participation, less altruism and volunteering, more disputes, lawsuits, commuting and TV.

And so on, article after article, all written by informed, articulate, sincere experts. Breathless accounts of the digital revolution and the information age and the thrilling world of venture capital alternate with gloomy reports of global climate change, horrible deformities in frogs, impending water scarcity, rising depression and suicide and divorce, plummeting work satisfaction, growing distrust and loneliness.

If you read any one of these books or articles, you'd be convinced either that we're making progress or going down the tubes. If you read them all, back to back, you see how different observers select particular data to shade the picture dark or bright. Many of us seem to have some sort of glandular urge to notice exclusively either the bad news or the good. The real world is full of both. We're not good at reporting on the whole fairly or completely.

The World Bank, among other organizations, is trying to fix that reporting problem, by expanding its capital accounts. Capital, in a financial sense, is an accumulation of dollars in a bank or stock or bond account. It goes down when we spend more than we save and up when we save more than we spend. As a society we are great at keeping money capital accounts.

But other kinds of capital are more important. For example there is physical productive capital -- the factories, roads, buildings, machines, vehicles that make up our real economic wealth. (Money capital is just a stand-in for physical capital; it has no value of its own.) We can build up money capital accounts by letting bridges decay and cars age and factories get obsolete. But that, as the Soviet Union found out, is an exercise in self-deception.

Then there's human capital, the health and skills embodied in the population. Like other forms of capital, as this one goes up, so does the productive potential of the society. Like other capitals, human capital rises with investment (in education, proper diet, clean air and water, health care) and falls with age and poor maintenance. The World Bank and IMF are beginning to admit that their standard technique for enhancing the financial capital of nations systematically cuts investment in human capital -- draining one source of wealth to built up another. Lousy accounting.