Getting well-being right
Will the growing interest in measuring well-being rather than simply economic growth eventually lead to a shift in official statistics?
Easterlin’s paradox is the term given to the breakdown in the correlation between economic growth, individual affluence and well-being in well-off countries. The idea that getting richer doesn’t necessarily make us happy has moved from the status of homespun philosophy or anti-capitalist critique to mainstream thinking in a few years. Backing for a redefinition of national progress has come from happiness researchers like Richard Layard, has been reinforced by the environmentalist critique of economic growth and has received more support from the work of Kate Pickett and Richard Wilkinson, which seems to demonstrate that social equality is a more important determinant of aggregate well-being than disposable wealth.
Now the critique of GDP has been put on an official footing, al least in France, with a major study commissioned by President Sarkozy from a team of internationally renowned economists headed up by Joseph Stiglitz. I won’t go into the report in detail – there are plenty of stories about it on the net and the full report is available here. Sarkozy says he will act on the report by changing the official measures of progress used in France and he intends to make the case for wider international adoption. When he does, his fellow leaders are likely to say they already use a more balanced set of indicators. The tiny kingdom of Bhutan may be the only one that claims to put its happiness index at the heart of policy, but even in Britain there was a much derided attempt in the early years of New Labour to develop of quality of life index (its credibility was somewhat undermined by it being the ministerial responsibility of John Prescott, not someone one naturally associated with well-being).
I doubt whether GDP will ever be replaced. It measures one facet of progress and is an important, albeit imperfect, indicator of what is happening in the formal economy. But it would be powerful if we could develop a small number of other recognised indicators of well-being that got at least some of the recognition that attaches to GDP. Having said which, well-being indices should never be uniform. One of the points made in the Stiglitz study is that people in different countries have different accounts of the good life. For example, American women apparently prefer walking as a past time to making love, while French women are the reverse. The process of deciding what are the most important components of well-being can be valuable in itself. It involves asking what kind of citizens we want to be, a question which the RSA is exploring in its future citizens project with Peterborough.
The balancing act of developing credible well-being indices is to be sufficiently robust and consistent to be respected at home and abroad while allowing the flexibility for different populations to decide what it is that most matters to their quality of life.
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3 Comments on Getting well-being right
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Julian Dobson on
Tue, 22nd Sep 2009 11:21 pm
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karl on
Wed, 23rd Sep 2009 11:37 am
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How should we live? : Matthew Taylor’s blog on
Tue, 8th Dec 2009 10:50 am
And while we search for the holy grail of a wellbeing measure that’s robust and consistent, we continue to use measures that robustly and consistently fail to value what is important to life (relationships, contentment, and even, as the RSA is beginning to explore, faith and spirituality). And not only do we continue to use flawed and inadequate measures, but we target our public services and spending on their ability to achieve results that can be measured in such ways.
This isn’t just an academic argument because, as the Sustainable Development Commission (for example) has recognised, we’re using performance measures such as Gross Value Added that reward unsustainable behaviour, placing a value on consumption and no value on reductions in energy use. In the light of climate change, isn’t the ‘robustness’ of GDP and GVA patently perverse?
Ken Dodd said in 1964 he hoped that ‘When you go to measuring my success that you don’t count my money count my happiness’ … making him ahead of Stiglitz et al …. although some later problems with the tax office need to be considered with respect to his advocacy of this theory.
But, another lyric in the same song suggests that he feels blessed to be born happy. This suggests to me that any adoption of such a measure by governments must give consideration to their realistic ability to bring about behaviour change ….. treat the cause (see Wilkinson and Pickett) not the symptoms ….
See http://www.cadenceworks.co.uk for a bit more on this and thoughts on geographical scale.
Just off for a walk with an English woman.
[...] and wider social well-being (an issue discussed in the RSA’s Journal and which I covered here a few weeks ago). Interestingly, in his talk here last night about the enlightenment, Tzvetan [...]
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