Futurist Hazel Henderson Offers
New Indicators and a New, Holistic
View of Money
by Michael Finley
Exclusive to Financial Planning News
Copyright © 1993 by Michael Finley. All rights reserved.
What if everything we know ain't so?
That is pretty much the thesis of economic futurist Hazel Henderson, whose insights into the revolution taking place around us will be on view when she addresses the XXXXX XXXX Conference in Dallas, September 19-20.
Henderson, author of several books and hundreds of editorial and academic articles, says it is time to awaken to the fact that the world that is taking shape, with the fall of communism and the demise of conventional economic theories, requires new eyes, new attitudes, and new measurements.
"We're still keeping score with the measurements handed down to us from the industrial age of a half century ago," Henderson says. "We need an entirely new scorecard."
The Gross National Product (GNP), for instance, was adapted during World War II to pace our country to maximum wartime output. It is the grandaddy of economic indicators worldwide -- and our GNP continues sto rise admirably today, despite the obvious fact that something has gone seriously wrong with our society and economy.
Recessions are defined by growth in GNP. If the GNP number is flawed, it helps explain how we can technically be long out of a recession, yet still feeling bad in many quarters.
GNP and GDP (Gross Domestic Product) focus on conventional production, services and transactions, Henderson says. It makes no accounting of some 50% of real, valuable and useful production in the U.S. -- unpaid, voluntary and do-it-yourself efforts. GNP is a two-dimensional abstraction, and our society has moved beyond it, to 3-D concerns. There is no place in GNP for the environment, our children, education, health, or even infrastructure.
According to GNP, Henderson says, we are a spectacularly successful society. It nearly doubled between 1980 and 1991, but how many of us doubled our standard of living in those years? Henderson proposes a set of indicators that she feels get more at the heart of our societal needs. These indicators would factor in things that matter beyond lump-sum production:
Henderson, a resident of St. Augustine, FL, makes her living as a free-lance consultant. "I give half-day and full-day talks on trends and the future holds," she says. "I don't come in to tell management how to run their company.. My indicators are unbundled, rather than aggregating all the apples and oranges, as GNP does.
"But democracy is overtaking us all, including us here in the U.S.. Instead of one insane statistic cooked up in the back room by professional economists -- I call this system economism -- let people decide for themselves which measurements matter.
"When financial planners sit down with clients,' Henderson said, "they usually begin with a questionnaire that helps them determine investment goals. I want to invite planners to take more upon themselves, to expand the questionnaire to get at all the things investors want, their life goals plus their concerns about the world they live in."
Socially-conscious investing is often thought of as a tiny niche, for a handful of investors who don't want their money to go to tobacco or guns. Henderson sees it as more of a matching of investor to interests, that need not be negative, where people can direct their money toward ideas that excite them. "For example, people who care about the environment can invest in solar energy and recycling companies, like I do."
As an advisory board member to Calvert Social Investment Fund (she is also working with Calvert to create a set of indicators on the quality of life in the U.S.), Henderson has seen how a solid portfolio can be built around these ideas. "If planners learn more about their clients, the money they invest can work twice as hard," she says, "once for the investor's wealth growth, and again for the company or idea the investor believes in."
Many of Henderson's forecasts have borne fruit. In articles in Harvard Business Review in the 1960s, she predicted the rise of eco-economics, a deepening of corporate social responsibility, and technological approaches to conflict resolution. All have come true, in spades. So may her plea today for a new yardstick to stand society up against.
"The only true economy today is the global one. Every day a trillion dollars sloshes around the planet. Our challenge is to find ways to focus those resources not on propping up the obsolescent past, but in nurturing the industries and endeavors that are now emerging, and where our future interests lie."
To learn more about Hazel Henderson, read her latest book, Paradigms in Progress (Knowledge Systems, 1991). Better yet, be on hand Sept. 19, in Dallas. x
Copyright © 1993 by Michael Finley. All rights reserved.
Michael Finley writes frequently about technology, finance and quality for a host of publications. He can be reached through Computer User, where he is a contributing editor, or via CompuServe, account #71344,2517.