To an ethical investor, growth doesn't always lead to happiness

Seitchik: One area that investors are getting very focused on right now is the area of global warming and the risks that are associated with the potential regulation of global warming. The CEO of Cinergy [a leading electric utility] has come out and said: "We know that greenhouse gases are a problem. We know they're going to be regulated in the future. And when we go to invest in a plant, it has a 30-year investment horizon. So there's a real risk to us - not only as managers of a company but also as investors -- if we don't take into account the potential regulatory and litigation risks that come with that." So we're starting to see a lot more research in the area of risk-management around environmental issues.

Is this really picking up steam?

Shapiro: It depends on which side of the Atlantic you're talking about. We see a lot more of it happening so far in Europe. But the caldron's bubbling here.

Some economists say it's tricky, even dangerous, to differentiate good growth from bad. If we had overdone conservation when energy was cheap, the argument goes, we might have missed big innovations, such as more powerful engines.

Seitchik: I think it's a bit one-sided. If you go back to the debates in the early '70s about the Clean Water Act or the Clean Air Act, a lot of these arguments were made. This was going to be impinging on growth. But in fact, we've had very good growth in the United States, particularly in the '80s and '90s subsequent to those acts.

Conventional growth measures don't work?

Shapiro: We certainly know that GDP [gross domestic product] isn't the end-all, be-all for measuring. There are the intangibles that are important and don't get considered.

Seitchik: The things that we don't measure, we really don't value: time with friends and family, time with your children, volunteer time. These are things don't get counted, and therefore don't get valued in the same way as some other things. [For example:] Buying a home-security system, which does get counted in GDP, because the crime rate has gone up. It's better to have lower crime and fewer security systems.

Do we need a grosshappinessproduct?

Seitchik: I think we do need new measures. The problem is it's very controversial and it gets into the political sphere.... There's a group that [has] the Genuine Progress Indicator or GPI. They actually have statistics where they take GDP and add things and subtract things. Since 1950, on a per person basis, they see on their measure an increase of about 60 percent. So they would say that people are better off now than in 1950 on a per person basis. [But] on a GDP basis, it's 300 percent. So it's not like they're saying there's no progress. But the way they measure things, there's been a lot less [than economists' traditional measure].

Page: 1 | 2