The — capability matrix: some observations on GDP and the economics of human development

Jorge Buzaglo, “The À capability matrix: some observations on GDP and the economics of human development”, real-world economics review, issue no. 66, 13 January 2014, pp. 109-126.

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  1. Claudio Gnesutta
    July 29, 2014 at 9:47 am

    I think important the Buzaglo approach to overcoming the GDP question. Although my remarks focus mainly on how he introduces the “capabilities” within a SAM scheme, I want to say first that I agree with his research project: with his macro view for the explanation of the production-distribution-consumption process; with the relevance given to “needs” and also to the “capabilities” required to achieve them, with both placed in an analytical context in which the goal is not directly the individual happiness but rather the political conditions for human development. I widely share this vision of political economy and therefore I consider it vital to pay close attention to the techniques required for an adequate analysis. On this ground the possible solution offered by the Capability Table within the SAM framework (Table 1) does not seem able to account for the interesting premises. In fact, the “Capabilities” sector (Row3-Column3) overlaps with other areas without any real integration; so much so that its entries, except along the main diagonal, are in parentheses and do not participate in the totals measuring the overall value of single sector activity. I deem that this result necessarily descends from a too narrow definition of the capabilities production process as a “production of capabilities by means of capabilities”. In doing so, what is overlooked is the production of capabilities as intended to increase the availability of values to meet needs and therefore private consumption; that the production of capabilities requires the use of market-goods and the production of market-goods takes advantage of existing capabilities; that the production of the public sector is directed, at least in part, to satisfying needs and should fall within the capabilities production processes. The Table does not clarify, ultimately, whether the capabilities are a flow of new services to meet the needs or, rather, are a structure – encompassing the stock of (human, social and natural) resources – necessary for producing services that meet needs. I think ( many of these difficulties could be overcome if the accounting definition of capabilities production were formulated as “production of commodities, capabilities and resources by means of commodities, capabilities and resources” and so, after having specified the terms involved, the Capability Table could be redrafted for bringing out a richer and more fruitful structure of relationships for the Buzaglo analytical problem. The end result would be that this interesting research project would be considerably strengthened.

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