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Global Crossroads
Garrick Utley, President, Levin Institute 
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Measuring Gross Domestic Happiness
Thu,09/24/09
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One of the benefits of the continuing financial and economic soup most of us are in is that it forces us to face essential questions that are often ignored in more prosperous times. For example, GDP (Gross Domestic Product) may be the accepted measure for economic performance. But does it reflect a society’s true health? Should there be a measure for GDH, Gross Domestic Happiness? This is not a trivial matter at a time when so many individuals, communities and nations suffer from the quite visible hand of a prolonged economic downturn.
Now, two Nobel prize-winning economists, Joseph Stiglitz and Amartya Sen, have produced a report that argues that GDP along with data on unemployment, income level, housing sales etc. miss key factors that define a country’s overall health. A classic example is that consumers who buy cars and gasoline raise GDP. But commuters facing longer drives in freeway traffic jams under a cloud of pollution do not raise GDH. Certainly, the easy credit and housing binge of recent memory added dramatically to GDP, but not to today’s level of Gross Domestic Happiness.
Stiglitz and Sen are reviving an old and useful debate; to what extent is an individual’s or a nation’s Standard of Living defined by economic conditions? The study recently released was ordered up by the Commission on the Measurement of Economic Performance and Social Progress, which, in turn, was created by President Sarkozy of France. Sarkozy is out to make a point; that the social-democratic welfare systems in Europe (social market economies) provide greater social security (and presumably greater contentment) than the American emphasis on the free market system.
Beyond scoring points in what is now being called The Great Recession, the debate brings us back to the key and inescapable question; how much economic growth (GDP) is needed to satisfy society’s expectations and needs (GDH)? Don’t hold your breath for an answer. Joseph Stiglitz and Amartya Sen may agree on what is missing in current economic measurements. But they reportedly do not agree on what new methodology should be used to answer the very question they pose.
So, suggestions and opinions are welcome. Send them to the Nobel prize-winners. Or just post them here. |
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Thu,10/08/09
By : Rainer Hauser
Hi, Some days ago, I´ve sent you a commentary about Gross Domestic Happiness. Notwithstanding your not-very-friendly "silence", I feel a must to direct you to: http://grossnationalhappiness.com/gnhIndex/gnhIndexVariables.aspx , where first hand information about my comments could be find. Best Regards, Rainer. |
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Thu,10/01/09
By : Ramagopal
I do not think Sen would endorse gross national happiness as the alternative to GNP. He is critical of GNP no doubt, but in his writings he is also very critical of using happiness as an indicator of well-being. In fact, he explicitly states that a high level of happiness can go hand-in-hand with a miserable life. Sen favors a welfare state to unregulated free markets not because such a state enhances "contentment" but because it enhances human development. |
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Wed,09/30/09
By : Anonymous
This is truly a fascinating proposition - one sees news articles and polls every year which attempt to rank countries on the basis of the "happiness" of the people. In general, Scandinavian countries with high income equality and social security fare the best under these polls. However, is happiness an adequate measure of human welfare? Technology and scientific progress are not necessarily driven by human happiness - the vast number of patents and scientific enterprises are filed and undertaken in the United States (a relatively "unhappy" society among developed nations, according to most of these polls). Focusing solely on happiness might undermine other goals of productivity and progress. This presents a hard trade-off -current felicity or future progress? I'm afraid there is very little consensus on what we, as peoples of the world, truly prefer. |
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Sat,09/26/09
By : Athena Smith
What is "overall health"?Is it what we call "happiness?" If yes, is then happiness related to a particular degree of free markets and to a particular extent of safety net? The implication here is that success (however one may define it) probably leads to happiness. Albert Schweitzer strongly disagreed. He did not believe that success is the key to happiness. On the contrary, happiness is the key to success. If you love what you are doing, you will be successful. Therefore the question should become: Under which circumstances are people encouraged to love what they are doing? |
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