GDP and GNI

Kaner

I have a question about GDP v GNI.

Are the salaries paid to Irish workers by multinational firms with operations in Ireland included in GNI? I assume they are included in GDP, and it seems logical they end up in the GNI calculation as they are spent on good and services in Ireland.

I looked at the latest GNI per capita numbers for Ireland (2002), and it appears we are slightly above the European average for the first time. Our GDP per capita is 2nd in Europe.

Foreign companies in Ireland contribute about 20% to our GDP, but how much do they contribute to GNI (through payments to their employees, and products and services they purchase in Ireland)?

Seems to me that if it were not for these foreign companies our GNI would be 10 to 20% below the European average. So if they pull out over the next 10 years we will be in real trouble.

To help increase Ireland's GNI numbers, I believe we need to spend much more on R+D. We should encourage collaboration between third level institutions and business in the development of new ideas and technology. We should also get rid of the undercurrent of racism, first because it's wrong and secondly so we can attract brains from overseas.

Nuttzz

We should encourage collaboration between third level institutions and business in the development of new ideas and technology

On that theme, this is an interesting article

http://www.davidmcwilliams.ie/articles/view.asp?ArticleID=226

"Who, McWilliams, was the greatest Irish man ever?" bellowed Sandy, my first physics teacher.

"Forget de Valera," he said, "forget Parnell, Pearse, Joyce and all those second raters; the greatest Irish man was a Protestant.Who was he?"

My reply was always the same. (Sandy asked the rhetorical question practically every week.) "Robert Boyle, of course."

"And why was he more clever than Newton?"

"Because he experimented, sir." "And why is this so important, McWilliams?"


"Because, Sir, anyone can invent a theory - only the experimenter tells the truth." (Weird, the stuff you remember from school, isn't it?)

Boyle, who was born in Lismore, Co Waterford in 1627, is widely regarded as the father of modern scientific inquiry. He made his name, not from great Newtonian theories, but by simple testing and experimentation culminating in Boyle's Law on the nature of gasses. Two days after his funeral on January 7, 1692, Samuel Pepys invited his fellow diarist, John Evelyn, to his house for a social gathering, the purpose of which was to anoint the new leader of science.

The person chosen was Isaac Newton. The episode shows how late-17th century savants were unanimous in their choice of Boyle and Newton as the two great icons of early-modern science.

Science was not Boyle's first passion. During the 1640s, he believed he had a calling as a moralist and a literary writer, but gradually became drawn to the sciences. However, his moral concerns and religious convictions dominated his discourse on science and its relationship with both society and commerce.

Probably because he was the son of the greatest robber baron of the day - Richard Boyle, the first Earl of Cork and an Elizabethan land thief of gargantuan proportions - he was very wary of the motives of commerce and was insistent that business and science should not mingle.

He went as far as to say that he had "found by long and unwelcome experience that very few tradesmen will give a man a clear and full account of their practices; partly as a result of envy".

Boyle was warning that business by its competitive nature would always lead to half-truths, obfuscation, at best white lies and at worst outright lies. He warned that science should have nothing to do with commerce and that scientific inquiry should never be driven and determined by economic prerogatives.

Whether one agrees with his stance or not, the concerns of the 17th century father of science are shared by the modern-day father of the Catholic Church, Pope John Paul II.

Many would agree with the Pope that the "ownership of scientific knowledge" will be one of the crucial political and ethical questions in the near future. In the 25 years since the Pope's visit to Ireland, the scientific world has experienced huge changes, leading to the dawning of a new age - the age of "McScience",whereby inquiry is driven almost exclusively by commercial demands.

Increasingly, over the last two decades, large biotech and pharmaceutical companies have become financiers of scientific research in many of the world's universities. The major question is whether the lure of profit is corrupting biomedical research. (This is the subtitle of an excellent new book "Science in the Private Interest" by Sheldon Krimsky.) The Pope certainly thinks so and believes that it is crucial to save the world from McScience.

Before we talk about the Pope, let us examine McScience in a bit more detail. Like all former and current areas of the public realm, financing is a problem. Universities all over the West have seen their budgets cut and their research budgets particularly so. Therefore, they have turned to large companies for financing.

The companies have taken up the challenge with gusto, sponsoring projects, entire research departments, building wings of universities and offering bursaries and grants. Of course, the USA is a decade or so further down this road than Europe, but the pattern here is the same.

As a result, many argue that our "independent" scientific institutes have become little more than research departments of the large pharmaceutical companies.The conflict of interest is clear.

Critics believe that universities will not bite the hand that feeds them, and therefore could become little more than rubber-stamping, clearing houses for the highly profitable drugs industry. These fears have been substantiated by highprofile cases where sceptical scientists and professors were sacked from their positions for being critical of one drug or another.

As the industry moves more comprehensively into the area of lifestyle drugs such as Viagra, diet suppressants and other drugs that are based on medicalising "normal" conditions such as looks, weight or sex drive, modern ailments become a matter of opinion, not science.

The scientific journals are supposed to be policed by the much vaunted peer-review system whereby eminent experts rank and judge new procedures, drugs, breakthroughs and innovation. But there is a problem here too. Because the drug companies finance the journals via significant advertising and conference promotions, some say that the journals are bought off as well.

The implications for science are truly shocking. If there are no independent arbiters to gauge the effects of drugs,what is the point of it all? We will be faced with the prospect that research is only being carried out to make money. Should a drug have harmful side-effects, they might not come to light if independent research is suppressed. The implications in the area of genetic engineering are self-evident.

The Pope has written extensively on the subject and has condemned the "overriding financial interests" that operate in biomedical and pharmaceutical research. In a letter to the papal nuncio in Poland last year, the Pope wrote: "The pre-eminence of the profit motive in conducting scientific research ultimately means that science is deprived of its epistemological character according to which its primary goal is the discovery of the truth.

The risk is that, when research takes a utilitarian turn, its speculative dimension, which is the inner dynamic of man's intellectual journey, will be diminished or stifled."

Because the Catholic Church spent the 500 years since Galileo trying to snuff out such earthly curiosity, many readers might understandably scoff at it jumping to the defence of scientific enquiry and the search for rational truth. However, the Church is now one of the few powerful institutions beginning to question what has been described as the "privatisation of knowledge".

The privatisation of knowledge goes to the heart of the great political battle taking place in every aspect of our society. Its lines are drawn between evangelical economists,with their "divine right of the markets"doctrine, and the sceptics drawn ironically from the Church, the scattered left, community groups and disparate political movements lumped together under the anti-globalisation umbrella.

These folks, among whom are many economists, either reject markets or believe that they can fail and fail badly.

Of the many casualties when markets fail, probably the biggest one is trust - trust in the system, trust in the institutions, trust in the knowledge. So far, we have been amazingly lucky in the scientists we have been blessed with.

On a variety of potentially dangerous innovations, from nuclear power, to biological weapons to genetic research, thus far, scientists have been moral, just and rarely driven by personal gain alone. It is non-scientists, such as politicians, corporate bosses and others, who have undermined our trust in science.

Trust is the most ephemeral of assets. It is extraordinarily difficult to build, and comparatively easy to lose. Every time we take a pill for a headache, we place our trust in science. Every time we go to the chemist, we are entirely at the mercy of the integrity of the product. Every time a doctor recommends a treatment and course of drugs, or even an antibiotic, we base our judgment on the integrity of the doctor,the remedy and the science behind it.

If that integrity is compromised,trust is lost.Yet trust is all we have.Without trust, the gelling agent of all contracts disappears. In the area of medicine, this would leave us prey to quacks, alchemy, prejudice, opinion and the dangers of personalised, single-issue campaigners

Kaner

Thanks for the reference Nuttzz.

As someone with a chemistry degree from Trinity I have seen arguments like the one put forward in the article. I live in the US and I am aware of some of the crap that goes on in the pharma industry.

I dont like the lifestyle drug concept, but to say that is all there is to business/university cooperation is false. It ignores other business-funded genuine medical research, not to mention research in physics, electronics, chemistry and biology.

Universities can earn a lot from cooperation with business without selling their souls. Revenues generated can be used to fund pure research, and if potentially commercial discoveries are made then these can be licensed and developed by the universities.

Its a different mindset, but if Ireland is to remain competitive, or maybe I should say to become competitive, we need to develop genuine creativity in the scientific area. When you compare our R+D spending with the Scandanavian countries it shows how far behind we are in this area.