By Marianthi Dunn
Having worked with official macro-economic statistics for more than 22 years, at the Office for National Statistics (ONS) in the UK and at the European Commission, I’ve had the opportunity to work with some very influential numbers.
In my journey, I discovered a wealth of guidance in international manuals on how to measure “value added”, “capital”, land and just about every economic and financial statistic published by statistical institutions, from input-output tables to the national balance sheet. For years I followed international guidance in the System of National Accounts, a set of rules agreed by many international institutions including the UN, IMF, World Bank.
For more than two decades I have worked with concepts such as “value added” and “net worth”, within the boundaries of these rules.
My branch at the ONS produces the National Balance Sheet, and last year we estimated the UK’s net worth to be a staggering £10.7 trillion. That’s nearly 5 times the size of GDP, which incidentally is the sum of all the “value added” by the producers in the economy.
In 2019 I had the opportunity to head the Labour Productivity branch, producing what the RSS called the “Statistic of the decade”; an influential economic statistic that reflected how the UK was experiencing the worst decade for productivity growth since the 1800’s.
Earlier, in 2014 I was compiling the first Eurozone’s GDP estimate that had incorporated the “improved” economic concepts of ESA 2010, which amongst other developments recognised research and development and weapons systems as capital items, rather than intermediate expenditure.
Yet with the compilation of each of these economic statistics, like Marianna Mazzucato, I wonder who really creates the rule book? Who decides what “value” means, who gets to measure it and what purpose should the economy fulfil?
What if we were to fundamentally rethink how we define value?
What if we could travel into the future and ask the children seven generations ahead of us how we should measure “value” and “wealth”? How different would these numbers be if they had a voice?
Ask any parent, during the COVID pandemic lockdown restrictions about home schooling. What “value” did that add to our economic growth?
I wondered about the unaccountable value of all the unpaid labour, the hours of work we dedicate raising our children and which is the heart of our family life. And if we feel this doesn’t have a role in the “economy”, then what would the workplace be if no parent ever toilet-trained their child or disengaged with their social upbringing?
Mazuccato humours us when she points out, “if you marry your babysitter GDP will go down, because you stop paying for the service. Yet if you pollute the environment GDP goes up, because you pay someone to clean it up.” This is because our rule books tell us everything is measured in prices and monetary costs.
But what if we were to measure our economy’s success by the contributions it makes to our society and wider community.
Like Kate Raworth, author of Doughnut Economics, I wonder how long it will take us to reposition the goal of economic growth, evicting the “cuckoo from the nest”, by integrating its costs on people and our planet? What value does biodiversity and flourishing of life provide to our well-being as humans? What price do we give to the simple pleasure of climbing trees as children?
It is encouraging to see the international authors of the rule book starting to re-think the importance of maintaining sustainability of our resources and well-being in the latest SNA updating process. However, we are now in 2022 and these rules will take a few years to be agreed, and even more years to be implemented.
I work with one of the largest numbers published by the ONS, “net worth”. My role as an economist and national accountant is to produce coherent, comparable, and reliable statistics to help policy makers make well-informed decisions for the better good of our society.
On a personal level, being part of a household, I appreciate how important these numbers are in the decisions that we make for sustaining “net worth” and “real value” for our future generations.
Similarly, as a parent, I also need to be a responsible ancestor; wondering if we continue to follow the current rules, are we depriving future generations of their net worth, at the expense of continuing to drive “value” as defined by today’s rules?
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Marianthi Dunn is Head of capital stocks and national balance sheet branch at the Office for National Statistics.
ESCoE blogs are published to further debate. Any views expressed are solely those of the author(s) and so cannot be taken to represent those of the ESCoE, its partner institutions or the Office for National Statistics.
