 Hi, Professor Gerald Friedman, Department of Economics, University of Massachusetts, Amherst. And we here today talk about how we measure success in the economy. What does it mean to have a successful economy? In the orthodox world, which extends to the Economist Magazine, the Wall Street Journal, the New York Times, to some extent to the United Nations, Federal Reserve, TV News, most of the blogosphere, success is measured by the gross domestic product, the sum total of how much we produce and market, which is different than how much we produce. But the gross domestic product is some total of stuff that goes through markets. You take that number, which in the United States right now was $1 trillion, you divide it by the population, and you have per capita income. How much the average, if we divided it evenly, the average person would have of market transactions. And that number in the United States comes to $45,000 or so per person. And on that basis, we say we're a success. France is $34,000 a person. Greece is $25,000 a person. Mexico is $20,000 or so. So we're better than them. We're number one. Well, actually, we're not like number five, but close enough. Now, this measure is so flawed that, well, let's just say that one of the founders of the gross domestic product, Simon Kuznitz, wrote long essays about how bad it is as a measure of actual well-being. And in fact, if you look across the world at happiness studies, if you ask people how happy they are, richer countries are associated with greater happiness, but only up to about $20,000. Really poor countries, countries that have very little market activity, they really are sad. They're unhappy people. They have short life expectancies, and they're unhappy. But when you get to about $20,000 per capita income, where the United States was in, say, 1950, that's about where happiness peaks. After that, it's not clear that greater income leads to any greater happiness. In some countries it does, other countries it doesn't, but no systematic effect. This is because the gross domestic product is such a flawed measure. It leaves out so much of what matters in the world. As I said, it doesn't take all production. It only takes production that goes through the market. It doesn't take home production. It doesn't take taking care of your sick grandmother. It doesn't count the community. Standing around chatting with your neighbor doesn't take care of friendship, of course. It doesn't take care of environmental degradation. On the contrary, paying to clean up the environment may lead to a higher GDP. Polluting the environment doesn't do anything. Military spending counts doesn't make us happy. If you get robbed and then go out and buy a new camera, it's the GDP. Doesn't make you any happier. Makes you a lot less happy. Spending money on hiring people to protect your stuff because you were robbed makes you unhappy because you have to have these security people around, but it adds to GDP. So gross domestic product is not a good measure. Now, this matters because capitalist firms are organized to increase the gross domestic product. That's what they do. I mean, it's not their goal. Their goal is to make profit. But the way they make profit is by producing more stuff in the marketplace. And that's the gross domestic product. They don't care if they pollute unless the government catches them or something. They don't care if they're making tanks, bombs, poison gas, or life-saving pharmaceuticals. They don't care just so they make profit. They'll produce stuff and they'll increase the GDP. They'll use up the environment. They'll trash your neighborhoods. They'll make it impossible for you to talk to your neighbors. They don't care. But they will increase the GDP. Work at co-ops are different, however. Because work at co-op, the work of cooperators, the people who work in the co-op, live in the community. Therefore, there's a natural tendency on the part of co-operators, worker cooperatives, workers working in a cooperative setting, to organize their firms' goals to promote other things than just increasing GDP, other things that people like. Because people in a co-op live in the community, they care about the environment. They care about whether the company is organized in a way that allows neighbors to talk to each other. Or if it runs its plants so loud and so stinky that nobody can stand around on the sidewalks. So a cooperative, while it may increase GDP, because it tries to produce stuff to sale, it may also, more than capitalist firms, concern itself with the environment, with the neighborhood, with the safety and welfare of the community in other dimensions than just the gross domestic product. So thank you very much. And have a nice day. Bye-bye.