Civil Engineering Reference
In-Depth Information
If 'total' GNI were the reference point, then Norway would move to the bottom
of our list and the richest nation in the world would be the United States with a
GNI in 2010 of $14,646 billion. As you can see from
Table 13.1,
there is a huge
difference between the largest and second largest economy (measured in terms of
GNI per capita). There are 309 million Americans and 5 million Norwegians
and, once population size is taken into consideration, Norway can offer a higher
material standard of living than the United States - $87,350 compared to $47,340
respectively. At the other extreme, China and India with the highest populations
in the world are relatively poor, with an annual per capita income of $4,270 and
$1,270 respectively. According to the World Bank (2012) low-income countries are
those with less than $1,005 per capita (which is possibly less than some students in
the Western world earn each month - even while they are studying) and this gives
some indication of the poor average standard of living in India.
It should be stressed that figures derived from national accounts do not
effectively measure the distribution of wealth or levels of contentment within
society. Recent research in the UK found that every £100 increase in national
income since 1977 has benefited the rich disproportionately (particularly when bonus
payments are included) and since 2008 the poorest half of the population (defined
as 11 million working-age adults earning low-to-middle incomes) had not seen
any increase in their wealth at all. In the authors' words, average wages in the UK
were stagnant from 2003 to 2008 despite GDP growth of 11 per cent in the period.
Similar trends are evident in other advanced economies from the US to Germany.
For some time, the pay of those in the bottom half of the earnings distribution
has failed to track the path of headline economic growth (Whittaker and Savage
2011: 2). Similarly the per capita income figures shown in
Table 13.1
hide the
stark reality of unequal income distribution. For instance, 70 per cent of those
who live in India and 30 per cent of those who live in China survive on less than
$2 per day, which is far less than the respective annual per capita figures would
suggest (World Bank 2012).
There is a debate opening up about 'happiness' in an economic context, as there
are those who argue that although people have got richer in Western society they
have not become happier. There are things that money cannot buy, such as good
health, lasting relationships, strong communities, interesting employment and a
beautiful environment. So the happiness of a society does not necessarily equate
to its level of income. The problem is that no accepted measure for the quality of
life, or wellbeing, has been established to date. Richard Layard's work at the Centre
for Economic Performance at the London School of Economics may eventually fill
this void. He has certainly had encouragement from politicians of all persuasions to
identify what is sometimes referred to as a 'happiness index'. It is Layard's (2011)
contention that as the consumer society has become dominant over the past 50
years, happiness has declined. As he points out we are richer, healthier, have better
homes, cars, food and holidays than we did half a century ago, but despite economic
growth increasing by leaps and bounds, happiness in the West has stagnated. This
raises some serious questions about the pursuit of economic growth, and some argue
that this political objective is neither sustainable nor desirable.
