DOES AN INCREASE IN ECONOMIC GROWTH MEAN AN INCREASE IN NATIONAL WEALTH?

E. Ahmet Tonak (Simon's Rock College of Bard )

This paper provides an empirical description of the Turkish economy since 1980 based on an alternate macroeconomic accounting system. The existing national income and product accounts are based on a notion that all socially necessary activities except consumption result in a 'product.' According to this conception of what constitutes productive activity, private guards, bankers, and traders of all sorts are counted as adding to national wealth. The classical tradition, including Marx, had a different view of productive and non-productive economic activities. This alternate accounting system is built on the classical tradition and applied to Turkish macroeconomic data. Using this accounting scheme, one finds a large increase in unproductive activities during the period in which the Turkish economy was 'reformed' through various policy packages. This situation of persistent weakness of productive activity, if not addressed, will obviously have many ramifications for economic growth and stability, politically and otherwise.