As you might guess none of this is original
Definitions
Let’s begin with some useful definitions from Ruskin:
“Wealth” to Ruskin is what contributes to a good life and adds to people’s capacity to be constructive:
There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest numbers of noble and happy human beings; that man is richest, who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others.
Unto this Last.
To Ruskin wealth is therefore connected to the power of implementing virtue, ‘nobility’, and being helpful. This is not a definition likely approved by classical economics – partly because these powers cannot be counted or measured and evaluation can be fairly subjective. Wealth being life, also points to the health of the environmental ecology.
“Riches” can be distinguished from wealth as it is collections of money and property which may not contribute to peoples lives. They may even involve cruelty, exploitation and exclusion.
If the king alone be rich, or if a few slave-masters are rich and the nation otherwise composed of slaves is it to be called a rich nation?… [paraphrase]
Ruskin Munera Pulveris
Since the inequality, which is the condition of riches, may be established in two opposite modes—namely, by increase of possession on the one side, and by decrease of it on the other—we have to inquire, with respect to any given state of riches, precisely in what manner the correlative poverty was produced.
Wealth tends to be communal, riches tend to be private and exclusive. I’m not aware of whether Ruskin writes on the virtues of commoning, but it is implied in these definitions. Wealth and prosperity is helpful to all, riches are not. This distinction is again unlikely to be favoured by classical economics, as such economics might even have the aim of confusing prosperity with riches for some.
“Illth” is the harm produced by economic activity. Illth includes obvious(?) devastations produced by pollution, dumped nuclear waste, ecological destruction during extraction and so on, but illth also includes the, perhaps, unintended human consequences which can arise from building riches such as ugliness, ill-health, insensitivity, compulsive selfishness, bad community relationships, exploitation, increasing misery, people crippled or exhausted and insecure from the work they have to do, loss of the ability for the community or individual to support themselves, work injuries, consumerist addiction, people being fed lies and untruth, dispossession of people by market demands, people being sacrificed to the market, destruction of prosperous futures, destruction of virtue, and so on.
There may be conflict here. What one person counts as illth, can be defined by others as riches, or even wealth.
Problems of Measurement
Recognition of the complexity of wealth and the problems of Illth seem vital to living a good life and perhaps even surviving. As Herbert Daly points out, once we start hurting the planet and using up its capacity to regenerate its wealth, we are continually generating compounding illth – even if we apparently generate riches. This is a case in which our economics measures money, but does not measure prosperity or the risk of illth. Again, this is difficult to do, but should probably not be ignored.
The main supposed measure of prosperity is the GDP which measures economic activity or expenditure (riches), not Ruskinian wealth.
There are a number of approaches but basically they all use monetary measures:
- GDP = C (Private Consumer spending) + G (government spending) + I (investments spent on capital equipment, inventories, and housing) + NX (country’s total exports less total imports)
or
- GDP = Wages + Profits + small business profits + Taxes – Subsidies
These sums can be adjusted for inflation or not. I used Wikipedia as the source, despite finding many other definitions, on the grounds that informed people would probably alter Wikipedia if it was obviously wrong, but also see this which points to rents, earnings from interest, and depreciation as factors in the second version of GDP etc.
The problem with illth in this scheme, as Daly points out, is that it has little recognised monetary value and is not measured. While few people wish to buy illth, they will happily dump it on others to increase profits and the GDP, and people will buy products that may save them from illth, gas masks, air filters, vitamins, pollution clean ups and so on, also boosting GDP, so that illth not only can help destroy the future but generate economic activity which counts as riches and prosperity as measured by the GDP. Through the measurement process, illth can increase apparent riches more than if the harm had not happened. The actual damage to life that illth creates may not be so easy to calculate.
Likewise if a climate change driven storm flattens an area and leaves people homeless or months or years, then any effort at reconstruction also adds to GDP, when in many cases little wealth may be being added to people’s lives and much may have been taken away.
If a forest is destroyed that can count as good economic activity. If people destroy all the world’s trees that is still a boost to the current GDP, despite having destroyed current and future wealth. Destroying the capacity for life, is almost certainly definitional of illth.
Because humans have apparently already significantly affected the planet’s ability to support us, then we need to lower the mass of the monetary economy, especially the mass of the illth economy. To do this we may have to abandon the current version of the GPD as a measure, and damage will have to be counted as a negative in the same terms, which may not be possible. But it is almost certain that economies will have to shrink in reality until the illth (long and short term) is minimised.
Sometimes harms may be useful when they occur during a re-organisation of the economy into a more democratic form, for example, but that is not usual.
We might even wonder if illth can ever be separated from riches? It may be the case that the global economy (both capitalist and developmentalist) requires illth to ‘work’ or to know it is working.
If we then add growth of the GDP as a supposed necessary mark of success or even of economic “sustainability”, then this holds a demand that the economy will have to continue to increase resource extraction and consumption, which may require even more violent, and illth producing, forms of extraction, which incidentally add more to GDP because the cost is greater but which add very little wealth. Daly again remarks that a low destruction oil well that produces much oil without much labour or danger, would currently add less to the GDP than would a dangerous deep sea well, in a storm racked area, which produces heaps of pollution and a need for clean ups. The second well would probably only be countenanced when the easy wells are almost used up.
The difficulty is measuring illth purely in monetary terms. If illth is not completely repaired, which is possibly impossible, then there is no cost, and as we have seen currently the cost of repair hides the damage as riches. If illth is freeloaded upon to generate riches, then it cannot be costed other than by estimate, and if the illth of human misery is to be factored in, then it can always be denied by those with riches….
A more useful measure????
Nowadays, according to some claims, economic activity uses up a year of the Earth’s capacity to regenerate in just under 8 months. This is illth creation in action. Economic activity is creating riches but destroying our capacity to produce future prosperity. It indicates the seriousness of illth production. I presume this is a disputable measurement, which is why it is not in official use, but it does seem to be a useful measure. We simply cannot afford to be in a situation in which our use of the planet is greater than the planet can regenerate, for long periods of time.
Hence, again we go to the necessity of
- degrowth
- the recognition of the unintended harms coming from the production of riches, and
- the need to produce real wealth in human life.
