French President Nicolas Sarkozy has decided that traditional indicators of a nation’s economic progress are insufficient, misleading, even dangerous. Thus, he has announced, France will begin factoring into analyses of its economic vitality such intangibles as “happiness” and “well being.”
Sarkozy believes that reliance on gross domestic product—GDP—as the main measure of economic prosperity contributed to the recent global financial crisis. He is urging other nations to join France in measuring less materialistic indicators of progress.
The French President said the current crisis does not just give the international community the freedom to imagine another economic model, but it obliges the world to do so. “We do not have the choice,” he said.
A report commissioned by the French government from Nobel Prize-winning economists Joseph Stiglitz and Armatya Sen recommended Monday that policymakers shift from traditional measurements of GDP to focus on such non-material forms of wealth as education and health care.
According to Stiglitz:
A political leader attempting to promote the well-being of his citizens is pulled in different directions: he will be graded on economic performance but there are many other dimensions to the quality of life, including the state of the environment. While there is no single indicator that can capture something as complex as our society, the metrics commonly used, such as gross domestic product, suggest a trade-off: one can improve the environment only by sacrificing growth. But if we had a comprehensive measure of well-being, perhaps we would see this as a false choice. Such a metric might indicate an increase in well-being as the environment improved, even if conventionally measured output went down.
National income statistics such as GDP and gross national product were originally intended as a measure of market economic activity, including the public sector. But they have increasingly been thought of as measures of societal well-being, which they are not.
This last is obvious to anyone who bothers to think about it. GDP measures the total monetary expenditures for all final goods and services produced within a country during a certain period of time. The greater the expenditures, the higher the GDP. In traditional analyses, the higher the GDP, the more robust a nation’s economy, and the more robust a nation’s economy, the “better off” that nation and its people.
That real horrors are not only concealed by, but actually valued in, traditional GDP reckoning can be seen by considering the example of cigarettes. Cigarettes are a poison, a lethal poison, that in the United States kill 400,000 people annually. Yet all the money expended on cigarettes, all the money expended on treating smoking-related diseases, all the money expended on burying dead smokers, is factored into GDP as positive dollars. Via GDP, American cigarette-smokers—alive, dying, and recently deceased—each year contribute to the “health” of the American economy.
As Stiglitz puts it:
What we measure affects what we do. If we have the wrong metrics, we will strive for the wrong things. In the quest to increase GDP, we may end up with a society in which most citizens have become worse off.
The mountainous nation of Bhutan in 2008 officially jettisoned GDP in favor of a standard measuring “Gross National Happiness.” Here’s why:
GDP is heavily biased towards increased production and consumption, regardless of the necessity or desirability of such outputs, at the expense of other more holistic criterion. It is biased against conservation since it does not register conservation or stocks.
Indicators determine policies. The almost universal use of GDP-based indicators to measure progress has helped justify policies around the world that are based on rapid material progress at the expense of environmental preservation, cultures, and community cohesion.
Bhutan’s analysis of what constitutes happiness in a 21st Century society is pretty sophisticated:
Happiness is a subjectively felt public good. Happiness is a public good, as all human beings value it. Hence, the government of Bhutan takes the view that it cannot be left exclusively to private individual devices and strivings. If a government’s policy framework, and thus a nation’s macro-conditions, is adverse to happiness, happiness will fail as a collective goal. Any government concerned with happiness must create conducive conditions for happiness in which individual strivings can succeed.
In this context, public policies are needed to educate citizens about collective happiness. People can make wrong choices that lead them away from happiness. Right policy frameworks can address and reduce such problems from recurring on a large scale.
There are many entities, such as the corporations and other organizations, above the individual level that make choices and decisions that impact collective happiness. Individuals are relatively less powerful to redress decisions of big organizations if they are contrary to the goal of collective happiness.
There are nine “core dimensions” to the Bhutanese “Gross National Happiness” index: psychological well-being, time use, community vitality, culture, health, education, environmental diversity, living standard, and governance. “Happiness,” state the Bhutanese, “comprises having sufficient achievements in each of the nine dimensions.”
The Bhutanese recognize that achieving measurements of such factors can be difficult, particularly when operating in a Buddhist framework, where concepts as basic as “reality” are pretty fluid.
From a Bhutanese cultural perspective, it must be understood that the subjective versus objective distinction is merely a heuristic device that does not in any fundamental sense represent what is basic to the nature of reality. The interdependence of all things, and the non-abiding self of everything, is a key concept.
The distinction between subjective and objective is but an abstraction from reality, given that from a Buddhist view, they do not exist. What exists in a fundamental way is relationality (as opposed to subject and object) at all levels, which can only be assessed by a broad range of social, economic, cultural, and environmental indicators. Seen in this way, happiness and well-being is ultimately a way of being that is affected by and affects relational quality, which changes in meaning over time with deepening sensitivities to the world around us and with our understanding of what is important or valuable for us and for all sentient beings.
Adapting the Bhutanese system to the West is essential, but will no doubt require a fair amount of re-rigging. What is above referenced as “relational quality,” for instance, will, in the more bumptious West, probably be required to encompass the vagaries of romantic love, which, for many endless decades, consumes huge chunks of, and produces wildly fluctuating variations in, the “happiness index” of the average Westerner . . . and has since the numinous if nerve-wracking notion first appeared, escaped, and spread like emotional cholera from out of Eleanor of Aquitaine’s “Court of Love” in the 12th Century. In the hurricanes of Western heart-storms, happiness can be ecstatic, grand, completing, comforting, fleeting, elusive, withdrawn, and lost . . . sometimes within the same moment. One person’s happiness can mean another person’s not. Etc.
The measurers of the West have some reflecting ahead of them.