Tonight on the Agenda, we're talking about whether it's time to rethink how we measure a country's progress. Currently, Gross Domestic Product, which is the value of all final goods and services produced within a nation in a given year, is the dominant economic indicator. One of tonight's guests, David Rothkopf, explains:
Calculating national income is a relatively new concept. Previously, countries measured their economic well-being by tallying land holdings or counting railroad boxcars. But in the midst of the Great Depression, Congress, showing a great deal more intellectual curiosity than it does today, commissioned a group of economists led by a future Nobel Prize winner named Simon Kuznets to better measure economic activity.
Although Kuznets and his team fulfilled their mission, they released their results with considerable unease. Not only were they aware that the statistic they devised ignored many types of economic activity — from the work of housewives to illegal enterprises — they also knew their number did not assess the social benefits of what they were tracking.
Kuznets warned of this: “The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income” like the one they created. That hasn’t stopped us from making this misleading number perhaps the most influential statistic in the world.
Americans use G.D.P. in discussions about how well we are doing. It’s at the heart of discussions of whether we are in a recession or not, ahead or falling behind.
And some, like Joseph Sitglitz and Amartya Sen who released a report on the shortcomings of GDP and possible new metrics of progress for French President Nicholas Sarkozy, say that focusing too much on one economic indicator can distract from other factors equally important to citizens' well-being. "What you measure affects what you do," Stiglitz said after the release of the report. "If you don't measure the right thing, you don't do the right thing."
Thus some, like Stiglitz and Sen, but also Jeffrey Sachs, are recommending we start measuring other indicators as well and, in particular, we measure well-being or life satisfaction. To put it colloquially, happiness. Politicians, like British Prime Minister David Cameron, have taken note. This time last year, he announced:
From April next year we will start measuring our progress as a country not just by how our economy is growing, but by how our lives are improving, not just by our standard of living, but by our quality of life.
We’ll continue to measure GDP as we’ve always done, but it is high time we admitted that, taken on its own, GDP is an incomplete way of measuring a country’s progress.
And this week, the Office of National Statistics, charged with measuring the well-being of Britons, released the first set of experimental results on subjective well-being yesterday. At the government's request, the statistics body added four questions to its household survey, which took place between April and August of this year. It asked 4,200 respondents:
- Overall, how satisfied are you with your life nowadays?
- Overall, how happy did you feel yesterday?
- Overall, how anxious did you feel yesterday?
- Overall, to what extent do you feel the things you do in your life are worthwhile?
What did they find? When asked how satisfied they were with their life, 76 per cent rated themselves a seven out of 10 (where 10 is "completely" and 0 "not at all"). Asked how happy they felt yesterday, 73 per cent rated themselves seven out of 10. Seventy-eight per cent rated themselves a seven or more out of 10 when asked if they felt they were living a worthwhile life.
Of course, the question now is what David Cameron's government plans to do with this data. Rest on its laurels as the vast majority of Britons seem to be happy? Or strive for an even greater percentage of happy citizens? These findings are the first of their kind in Briton and the science of measuring well-being is new. But proponents of well-being see promise here to shift priorities away from the purely financial. Richard Layard, a big advocate of well-being research and founder of Action for Happiness , argued in the Economist:
...obviously governments have always had some interest in the quality of life—why else do they try to prevent crime, promote health, and so on. But they have not given sufficient weight to that objective. They have given too much weight to wealth-creation compared with many other factors which are more important for human happiness. ...
So we do need a change of priorities—in government, in business and in education. In all walks of life we need leaders who create the conditions for happier living, who believe deep inside that "nought's had, all's spent, where our desire is got without content". ...
...measuring happiness is not about increasing the power of government. It is about increasing the effectiveness of government and of individuals—the contribution that each one of us can make to a happier society. This has to begin in our families and in our schools. But we will not achieve the objective unless we are willing to talk about it.
What do you think? Is it time for us to rethink how we measure progress in society? Is well-being (or happiness) the right thing to measure? Happiness is a hard thing to pin down, but that hasn't stopped us from trying to understand it a bit better here at the Agenda. While you mull over these meaty questions, below are some of our past programs on happiness.
First, Happiness and the Brain: How much do we really know about what makes us happy?
Next, the Pursuit of Happiness: Is the happiness movement making us miserable?
And Erica Engel on what makes us happy and how to attain it.
Follow Allison Buchan-Terrell on Twitter.