Last Updated:Friday - 09/24/2010

Value of the informal economy

At first, it might appear shocking that the number of volunteers in Canada dropped from 7.5 million to 6.5 million in the brief period between 1997 and 2000. However, the only other time the survey that produced these results - the National Survey of Giving, Volunteering and Participating - was conducted was in 1977. At that time, it found that only 5.3 million Canadians volunteered their time. There may be a blip in the 1997 survey rather than a calamitous drop in the last three years.

In any event, volunteering is an essential part of our national character that often gets overlooked in economic analyses that focus on the gross national product. Volunteering and a host of other activities are not included in the GNP because no money changes hands. They are certainly part of our national "product" even if they are not strictly part of the economy.

Household activities, mutual aid, gifts and bartering are just some activities other than volunteering that make our country a better and happier place yet fail to register in the GNP. When a family goes out and buys a meal, the GNP is increased, even though the same number of meals has been cooked. When a family cares for an aging relative at home, the GNP is unaffected. When that relative is placed in a nursing home, the GNP rises.

Moreover, goods and services provided through informal processes are often of greater benefit to those who receive them than are the same goods and services provided through the formal economy. In talking about the provision of social services, Pope John Paul wrote, "it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need." The pope went on to say that "certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need."

The tendency over the past century, however, has been to turn voluntary activities into activities that require salaried professionals and other paid help, or that produce a profit for an entrepreneur. We eat out more often, have hospitals and schools run by paid staff rather than unpaid nuns, and hire mechanics and carpenters to do jobs that used to be done by family members.

This is not without substantial benefits. It's led to technological innovation, universal standards for health care and social services, a more competitive economy and a longer lifespan. It has made us secure and independent in a way we couldn't have imagined 100 years ago.

But some things have been compromised. One is the personal touch in providing services. Society has become more bureaucratic, on one hand, and more profit hungry, on the other. Both of these tendencies have tended to suppress the simple, direct response to human needs.

They have also led to the creation of new desires in the population. Advertising, especially TV advertising, not only informs people of what's available, it encourages them to expand their list of wants. Improved health care has not only added years to our lives, it has also led us to believe that we have a right to live without suffering.

The attitude that only paid work is of value is a lamentable one. If we want a better society, we need to find ways to spread the strengths of the informal economy. We need to recognize that profits and bureaucratic efficiency are not the most important goals. The most important activity in society is that of people helping people. It doesn't always take money to make that happen.

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