What really makes people happy? It may seem a strange question to ask in the middle of a pandemic. But plotting a path to recovery from the virus has given governments an opportunity to rethink how they measure success.
Traditionally, the equation was fairly basic: Wealth is good, more wealth is better. But as the human impact of the pandemic hits home, politicians around the world face growing calls to prioritize people over productivity.
Health and well-being should now come before economic growth, according to 8 in 10 people surveyed in the U.K. by the nonprofit advocacy group Positive Money. The majority (61%) also want to prioritize social and environmental benefits, like higher life expectancy or lower carbon emissions, over GDP once the pandemic is over.
“When everything is turned upside down, people do have more time to think about what’s important,” said Fran Boait, executive director of Positive Money and co-author of a new report calling for policymakers to abandon GDP growth. “You realize that in the U.K. and the U.S. we’re very much locked into this economy of growth, where it’s all about how much you can earn and how much you can consume.”
Yet, she said, “when people are thinking about their own mortality, they don’t think, ‘I wish I’d spent more hours in the office.’”
As the pandemic exposes fault lines and inequalities in societies worldwide, it’s bringing fresh calls to move away from GDP as the sole measure of whether a country is succeeding, and create economies that work for everyone.
“What’s problematic is the fixation on this abstract indicator [of GDP] as opposed to really thinking about the activities and behaviors that are vital to our communities,” said Amanda Janoo, head of knowledge and policy at the Wellbeing Economy Alliance in Scotland. “Like any indicator, it’s just meant to be a proxy of something, and we’ve given it way too much importance.”
With GDP shrinking worldwide thanks to the virus, she argues, it’s actively in leaders’ interests to focus on other indicators. “Right now,” she said, “policymakers wouldn’t be smart to prioritize GDP, because they’re not going to look good if they do.”
Gross domestic product, or GDP, was devised by the economist Simon Kuznets in the 1930s to help measure countries’ progress in recovering from the Great Depression. Put simply, it counts the value of goods and services exchanged within a country. When businesses are growing and sales booming, it rises; when companies struggle or people stop spending, it shrinks. Falling GDP usually means layoffs and pay freezes, while rising GDP creates scope for pay raises and brings more taxes in to fund public services.
But GDP alone can’t tell us how fairly the proceeds of growth are actually shared within society. And the idea that rising growth automatically benefits everyone no longer rings true for many ― especially after a slow recovery from the 2008 crash that left many average earners still feeling squeezed.
“People now know what [growth] means for them ― it doesn’t necessarily mean a higher wage, because we have seen a dysfunctional economy where a lot of excess growth goes to the shareholders,” said Boait. “We don’t want to go back to normal, if that was on a course towards catastrophic climate change and high levels of wealth inequality.”
GDP also doesn’t count the economic value of unpaid work like raising children, or measure social goods like rising life expectancy. That’s driven some economists to dig deeper into what actually makes for a good life. Research has long shown that getting richer isn’t as fulfilling as some think. According to one landmark Princeton University study, happiness increases with wealth up to around $75,000, but after that more money doesn’t seem to make a difference.
Countries around the world have long been searching for ways to measure and improve their citizens’ well-being. The tiny kingdom of Bhutan has pursued “gross national happiness” over GDP since the early 1970s, measuring progress in nine different areas, from living standards to ecological diversity. Its latest report, however, showed only a 1.8% increase in national happiness between 2010 and 2015.
More recently, Andrew Yang’s unsuccessful bid for the Democrat presidential nomination featured calls for an “American Scorecard” targeting goals like reducing substance abuse instead of GDP.
In New Zealand, Prime Minister Jacinda Ardern last year published the country’s first “wellbeing budget,” putting an emphasis on lowering carbon emissions and boosting mental health, rather than GDP. Meanwhile, in January, the Canadian finance minister, Mona Fortier, was tasked with bringing quality-of-life measures into budget planning.
Now, as we wait for “normal” life to resume, the search for an alternative to GDP has taken on fresh urgency. There’s evidence people may not want to return to a normal that wasn’t working for them in the first place.
In France, 69% of those polled by the newspaper Libération on their hopes for a post-virus world wanted to slow down the pursuit of profit. And in Britain, fewer than 1 in 10 want life to return to exactly how it was before, according to a survey by the pollsters YouGov. Four in 10 said they have enjoyed a stronger sense of community during the country’s lockdown that has kept many at home for more than six weeks, while over half said the air felt cleaner with fewer cars on the roads. Yet social goods like this aren’t reflected in GDP.
GDP captures airlines collapsing, not carbon footprints shrinking; it records the impact of offices closing worldwide, but not the way working from home during the pandemic lets parents see more of their children. And while families are undoubtedly under stress, balancing work, child care and education, Juliet Schor, a professor of sociology at Boston College, predicts Americans may now seek shorter workweeks as a result of more flexible work schedules: “People are getting an experience of a different kind of work life, less pressured, more time with the family.”
The challenge however is whether this slower, more environmentally sustainable pace of life could still support the same number of jobs.
One city experimenting with balancing the two is Amsterdam. It’s vowing to base its coronavirus recovery on the economist Kate Raworth’s “doughnut” theory that policies should aim to meet people’s basic needs, but only within the limits of what’s good for the planet. For example, Amsterdam needs more affordable housing, and one solution would be to build more homes. But to do so in line with the city’s need to reduce emissions means using more sustainable or recyclable materials.
In Britain too, this week Labour and Green Party politicians called for the U.K. “to embrace a post-growth economy and build a fairer, healthier, happier and greener society.”
Such shifts may be difficult for leaders, like U.S. President Donald Trump, who built their political platforms on the promise of boom times. Ditching GDP as a yardstick also raises painful questions about whether it effectively means giving up on growth itself. After all, even the Positive Money report concedes no advanced economy has boosted well-being without it.
“We’ve built our whole system around the expectation of growth, so the end of growth means dashing expectations all around,” said Richard Heinberg, author of “The End of Growth” and senior fellow-in-residence at the Oregon-based Post Carbon Institute. Falling growth has historically brought painful consequences, from job losses to cuts in public services.
Yet the pandemic is currently showing that once-unthinkable ideas can go mainstream. Heinberg points out that several European governments have temporarily stepped in to pay the wages of people whose workplaces are closed by the virus, so why not do something similar to support workers through a transition away from fossil fuels?
For him, the pandemic simply brings forward decisions governments would eventually have faced for environmental reasons anyway. “We’ve created a perpetual growth machine on a finite planet, and something had to give,” he said. The question is whether that something is growth itself, or just the way we choose to define it.
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