The Soviet Union used to judge itself on how much iron and how many tractors it produced. Britain used to measure itself by the size and reach of its navy, while Germany had its army. Today, Western societies measure the growth of GDP, because such material advance is what we believe counts.
But Western societies have been changing again as their peoples move beyond valuing themselves in terms of cars, fridges and TVs.
We want to be the authors of our own lives. People choose a life they have reason to value, as the economist Amartya Sen once put it. And over my lifetime, more people — though not enough — have been doing just that.
We want our work to be meaningful and satisfying. If key relationships do not work, we divorce. We try to be the best parents we can, not just “good enough.” We spend more than half our disposable income on services — adventure holidays, pedicures and garden design, to name a few. We no longer affiliate ourselves with mainstream parties because one ideology no longer expresses the complexities of our choices. We are worried about the environment, climate change, traffic congestion and the security and beauty of where we live.
But as nations, we carry on measuring the growth of goods and services that are sold in the marketplace — the gross domestic product — as if it were the only thing that matters. It is not.
David Cameron, leader of the British Conservative party, expressed this when he tried to launch a debate on promoting greater national well-being, but he was decried by the UK’s redneck media and timid politicians as a tree-hugging quiche eater who should get back to what politicians do — finding lines of division, promoting business, limiting workers’ rights and slashing back the state. But Cameron was right — and it is a pity he has retreated to being a typical politician.
However, the truth will out. French President Nicolas Sarkozy has been seized by the same conviction, and last year he commissioned the world’s best economists — a star-studded list of original thinkers — led by Nobel Prize-winner Joseph Stiglitz and Amartya Sen, to report on how best economic performance and social progress could be measured. Last week, they reported with a well-reasoned, technical but devastatingly radical document that could change all of our lives.
They damn GDP as hopelessly inadequate, even in its own terms. A car produced this year is very different from one in 1979, so why compare them? GDP does not reflect the world because it cannot reflect inequality. It does not reflect the sustainability of growth, not just in environmental but in economic terms. For example, if the growth of indebtedness had been offset against traditional GDP growth between 2004 and 2007, the numbers would have looked a lot less rosy and the impending crisis would have seemed a lot more obvious. It might have been mitigated or prevented.
And, of course, GDP gives no guide as to whether the environment has got better or worse over the measured period, nor whether we are depleting natural resources so much as to menace our children’s futures. In fact, it is pretty useless. To measure and worry about all of this would transform the public policy debate.
But the extraordinary group of thinkers Sarkozy commissioned does not stop there. Having been asked to measure social progress, they have had to identify what it is. Their answer is uncompromising. It is about promoting our well-being — and that is necessarily multi-dimensional. Obviously material wealth counts, but it must take account of the defects listed above.
Then there are new considerations. There is health. French life expectancy is now two years longer than Americans’, which should compensate for the French having poorer per capita income. So that should be included. Then education; if people are to be authors of their own lives, they have to be educated and not just regurgitate by rote. They need to be able to think. Then there is the degree to which people can organize their personal lives around the activities they value, including getting satisfaction from work. The quality of housing has an immense impact on our satisfaction, again unmeasured and not included. So, change that.
A fascinating table on the values of US and French women reveals that while US women want to walk more than make love, French women rank making love as their No. 1 activity, not caring much for walking. And nobody much liked work, even though so much time is spent there. More effort should be made to promote decent, fulfilling work, says the commission, and then measure and include it in the composite measure of progress. Surveys could and should consistently capture what we want to do with our time, whether we do it and how much we enjoy it.
Political voice counts, too. People don’t like being disenfranchised. They like to vote, speak up in court and be heard at meetings. They value social connectedness. They want a better environment right now, with clean air and water. And they value personal security; people want to be safe.
Capture all of that systematically, says the commission, and you have a handle on the quality of life and whether we are progressing. Last but not least, regularly publish a set of indicators on the sustainability of our economies, ranging from the monitoring of stocks of natural assets such as fish, oil and minerals, as well as the indicators of danger, such as concentrations of greenhouse gases in the atmosphere.
Sarkozy says he plans to act on the commission’s recommendations. France will pilot them and push international organizations to follow suit. Many of the measures exist anyway; what is new is pulling them together in a systematic way to replace GDP. And because what we measure should reflect what we value, it will transform the economic and social debate.
In Britain, for example, we would not be discussing spending cuts and deficit reduction in such bald, terrifying and self-harming terms. We would be worrying about the impact on our well-being, because that is what we would be measuring, and the discussion would be how to get what we need in health, education, personal security and social connectedness within cash limits. The question that would be asked of banks after the credit crunch is how they promote economic performance, social progress and well-being.
The entire discourse would change. Good on Sarkozy, and what a sad commentary on our political class that none thought to establish such a commission to answer the only question that matters.
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