New GDP Accounting Makes a Difference Locally

The narrow ”economism” shown by critics of the Picasso Exhibit running its last week in St. Augustine, Florida, is a hangover from obsolete economic textbooks still unable to record “intangibles,” those valuable services which today make up some 70% of advanced economies and services sector companies’ balance sheets.  These old textbooks are based on only material goods of the manufacturing Industrial Era predominant in the 19th and 20th centuries, accounting for products you can drop on your foot.

On July 31st, the US Commerce Department’s Bureau of Economic Analysis, which produces our national income accounts: more commonly known as our GDP (Gross Domestic Product) began recording some of these “intangible” assets, including investments in software, art, movies, etc.

The St. Augustine Picasso Exhibit falls under this category of formerly under-reported investments.  As a 20 year St. Augustine resident, I am delighted that our City’s investment in this Picasso exhibit provided this addition to our cultural resources.  I not only enjoyed the exhibit, as did my partner Alan F. Kay, but we also recommended it to many of our guests who appear in our TV series “Ethical Markets“ now distributed worldwide to business schools, colleges and public libraries, and free on our website.

The new corrections to our nation’s GDP, which add billions in this formerly unrecorded wealth, will also allow 21st century companies based on information, research and intellectual property to better account for these true assets, as I describe in my syndicated column for InterPress Service (see our website ).  Our City can also properly record this Picasso investment, and when added to the receipts from our Parking Garage, we will now understand what a good investment this exhibit has been, as noted in The Record, August 4th article by Peter Guinta.

HAZEL HENDERSON, D.Sc.Hon., FRSA

President – Ethical Markets Media, LLC; author, The Poltics of the Solar Age, Building A Win Win World and other books

EthicalMarkets.com, HazelHenderson.com, EthicalMarketsQualityofLife.com