A paper used as the basis for a debate with Woking U3A People Politics & Society Group in March 2015
U3A PP&S – March 2015
A Happiness Index?
Good afternoon folks and welcome to our discussion on ‘Should happiness and not money be a measure of a country’s success?’ I realize that many of you will be skeptical about this as indeed am I. But we are holding this discussion because it seemed a natural and intriguing follow on to the previous discussion about Is The UK a Paradise.
As usual feel free to join in and make points or raise questions as we go along.
I have to say that when sitting down in my office to prepare for this I thought “what have I let myself in for?” and had what you might call discussion-leaders-block. This is because the subject of measuring happiness and making it a political goal seemed to be so tenuous and ephemeral compared to what is generally seen as the really ‘serious business’ of measuring economic success with Gross Domestic Product (GDP). But once I got going I could see there is a lot of merit in the subject. So please bear with me and enjoy what comes next. Above all don’t shoot the messenger.
We will talk about:
what do economic metrics really measure,
and some current programmes for measuring happiness or something like Happiness.
By the way there is one country in the world where Happiness is a defined goal for the administration. That country is Bhutan – of which more later.
Now, looking at how people in general talk about money and happiness there is I would say, apart from Gordon “Greed is good”, Gekko, Michael Douglas’s character in the film Wall Street, an overwhelming sentiment in our culture that happiness matters.
A few selective quotes might help make the point:
“I don’t care too much for money, money can’t buy me love
Can’t buy me love, everybody tells me so
Can’t buy me love, no no no, no”
That of course comes from the Beatles. But on a more spiritual level
how about St. Paul writing to Timothy?
1 Timothy 6:10
For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
Or Jesus famously quoted by St. Matthew
“Truly, I say to you, only with difficulty will a rich person enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God” (Matthew 19:23–24
Or according to Oscar Wilde in Lady Windermere’s Fan a cynic is;
“a man who knows the price of everything and the value of nothing.”
As much of our political debate centres on money and GDP, i.e. the price of everything, does that make politicians cynics? Or is it we who are the cynics since politicians are supposed to respond to what we the voters want.
Let us pause here so that I can ask – What do you think about what our culture is telling us about money and happiness? What examples can you give either way? Please hold off for now asking if Happiness is measurable or even a desirable goal for society. We will get to that in a while.
Ok then. Thanks for your contributions.
By the way, here’s another popular song on the subject of money Vs happiness.
“I got the one I love
I got the moon & stars above
I got my youth & my health
What do I want with wealth?”
Can you guess where that came from?
“Money is the root of all evil
Won’t contaminate myself with it
Take it away, take it away, take it away”
That was originally an Andrews Sisters number but I only recall it as Billy Cotton Band Show one.
Anyway, moving right along………….
If you agree that money is just one part, a crucial part it has be said, of what makes life worthwhile, why does there seem to be no measure for what does makes all of life worthwhile? After all we see Gross Domestic Product (GDP) and GDP Per Capita, and Purchasing Power Parity measures argued about in financial and learned journals. There is one such argument going on right now between the Institute of Economic Affairs and the Financial Times. This debate from the IEA point of view centres on their belief that even the well established GDP measure is highly misleading, misleading in that it distorts the facts around how well some economies are doing, and indeed according to some it leads us, that is you and I and our fellow citizens, into allowing the wrong judgements to be made on our behalf in how to run the country and indeed the world.
|Rank||Country/Region||GDP (Millions of US$)|
|31||United Arab Emirates||402,340|
GDP Per Capita
|7||United Arab Emirates||63,181|
|22||Republic of China (Taiwan)||41,539|
|36||Trinidad and Tobago||30,197|
Looking at Gross Domestic Product, GDP, which tries to measure the economic activity of a country, or GDP Per Capita which measures the individual’s economic activity, we have to ask if these metrics are worthwhile or trustworthy. Some of you have said before how GDP is misleading since it does not take into account those countries that are tax havens or have a lot of super rich, or those countries where ‘the living is easy’. This is where Purchasing Power Parity (PPP) comes into play as it tries to smooth out differences between countries. Properly used this metric comes up with very different results to GDP, Hence the debates mentioned earlier.
Now, please do excuse the continuing lecture on economics principals but I need to ensure we are aligned on what PPP – Purchasing Power Parity is.
PPP helps to minimize misleading international comparisons that can arise with the use of market exchange rates. For example, suppose that two countries produce the same physical amounts of goods as each other in each of two different years. Since market exchange rates fluctuate substantially, when the GDP of one country measured in its own currency is converted to the other country’s currency using market exchange rates, one country might be inferred to have higher real GDP than the other country in one year but lower in the other; both of these inferences would fail to reflect the reality of their relative levels of production. But if one country’s GDP is converted into the other country’s currency using PPP exchange rates instead of observed market exchange rates, the false inference will not occur.
Thus some countries who are in The Economics Premier League of Countries on a GDP basis would get relegated to the Conference League on a PPP basis; and they would almost certainly complain a lot about it.
The interesting thing is, if this were to occur, it is only the measure or perception that has changed, the reality of how well a country is doing is unchanged. So why get upset?
In political terms it could mean less clout at the negotiating tables and hence less power, and no politician willingly gives up a place at a conference table. After all if you are a leader of a country in the Economics Premier League you want to stay there. So why change from one reassuring measure to another less reassuring one?
Here’s why a change is needed; using the GDP metric Italy is ranked ahead of India putting it in the Premier League but if PPP were used Italy would slide down the league table behind India, which is understated in GDP terms by 15%, like wise China at 19% and Russia at 25%. You can bet many other countries, including ours, would slide up and down the leagues and thus lose international clout. This is why there is not much support for any change. YET. For my part I cannot see how this sate of affairs can continue. The change will happen, and it needs leadership to see it through with out too much disruption.
What has all this got to do with Happiness? Well I think if agreeing on a standard set of international economic metrics is tricky, how difficult is it to do Happiness and is it worth it?
I would maintain that using empirical and substantive but accurate metrics is most certainly needed as they help guide economic plans. But as the many examples given have shown being what we call well to do, or comfortably off, wealthy, rich, richer or mega rich, does not satisfy us all. The other parts of life like health and well being need addressing too. In fairness to political parties they do try to do this but fail because there are no standards for agreeing what healthiness or well being really are. So they all talk in their own terms using their own perceptions of healthiness and wellbeing. They seem to speak different languages, so is it any wonder then that they disagree all the time? This is why we the citizen and voter get confused about their intentions, so perhaps should consider a redefining of what we want from our politicians.
Because GDP only measurements may be misleading people like Paul Hawkens; a noted environmental entrepreneur, says “At present, we are stealing the future, selling it in the present, and calling it GDP”. Or as Herbert Hoover succinctly put it in 1936 “Blessed are the young, for they shall inherit the national debt.”
Whatever the outcome of that debate shouldn’t there be a similar debate in the media and in academe about Happiness?
Now I want to take us back to Bhutan, not ‘Back to Bataan’, the John Wayne film.
Here I must give much credit to Wikipedia and the Bhutan government web pages.
The term “gross national happiness” was coined in 1972 by Bhutan‘s fourth Dragon King, Jigme Singye Wangchuck. He used this phrase to signal his commitment to building an economy that would serve Bhutan’s unique culture based on Buddhist spiritual values. The message being conveyed was that happiness is more important than economic development. Through the contribution of many western and eastern scholars the concept developed into a full socioeconomic development framework.
The Bhutanese grounding in Buddhist ideals suggests that beneficial development of human society takes place when material and spiritual development occur side by side to complement and reinforce each other. This may seem esoteric but bear with me please as I explain it is based on some sound principals or pillars. The four pillars of GNH are the promotion of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and establishment of good governance.
At this level of generality, the concept of GNH is transcultural in that a nation need not be Buddhist to value these factors. These four pillars are further defined into eight general contributors to happiness—physical, mental and spiritual health; time-balance; social and community vitality; cultural vitality; education; living standards; good governance; and ecological vitality.
Although the GNH framework reflects its Buddhist origins, it is solidly based upon the empirical research literature of happiness, positive psychology and well-being.
Subsequently after many years of development the GNH policy now serves as Bhutan’s unifying vision to guide the economic and development plans of the country.
Proposed policies in Bhutan must pass a GNH review based on a GNH impact statement that is similar in nature to the Environmental Impact Statement required for development in the U.S..
Can you imagine how that would work in the UK? Political policies and programmes tied to the agreed broad social and economic goals of the country? If they do not match then such policies are dumped. Wow!
Well actually something similar does happen here in Woking and South East where the County, Borough and Neighbourhood long term plans are used to determine what building developments are allowed. Many other boroughs across the UK do the same. It has to be said this is done mainly to control unwanted development in that if a developer puts forward plans that do not match the agreed long-term plan they can be rejected. Without a long-term plan the developers can ride rough shod over boroughs by forcing their own plans on them. Also the government planning Officers can only judge each development on its own merits regardless of its context or location, which is why it seems that developers too often get their own way. This of course is to do with buildings. But what if it were extended to a broader set of metrics?
At this point in the debate I want to draw the Economic and Happiness arguments together and examine what is perhaps possible.
And by the way if you think that nothing like this will happen I wonder if you know that the UK along with many European countries began in 2014 measuring National Well Being. You can see the reports on the Office of National Statistics web site. Interestingly they headline it “Measuring What Matters” http://www.ons.gov.uk/ons/guide-method/user-guidance/well-being/index.html
As a first step to measuring Happiness consider the work done by Legatum Institute http://www.li.com
Legatum produces an annual report the ‘Prosperity Index’ which is more than GDP or PPP but less than Happiness.
The report explores six principles of prosperity that have been widely discussed and debated in both the academic and policy community, and have a strong relationship with both GDP and individual wellbeing. These six principles are: Opportunity; Education; Health; Freedom; Safety; and Social Values. Each principle is developed from at least 10 to 20 balancing data points creating 89 variables. Some are subjective and are developed from surveys, others are objective and are taken from international standard economic reports.
Legatum’s most recent report has the following top twenty placings: Note how few of the wealthiest GDP countries are listed.
- New Zealand
- Hong Kong
Cripes, I did not think the UK would get included. But there we are way out in front of the French who are in 21st place – that’s what matters doesn’t it? Beating the French. Who cares where the rest of the world is as long as we beat the French.
Have you noticed how the top six countries have lots of snow? Perhaps there is a correlation between prosperity and coldness?
But I digress. Back to Happiness
Another institute Healthways
has stepped into the more subjective territory of Happiness by commissioning Gallup to manage an annual global poll of 133,000 people to gauge how they feel about life. This is called The State of Global Well Being. It has some surprising outcomes that are worth discussion as they would add something to our debate.
It also turns on its head the Legatum prosperity index.
The Global Well-Being Index is organized into the five elements:
- Purpose: liking what you do each day and being motivated to achieve your goals
- Social: having supportive relationships and love in your life
- Financial: managing your economic life to reduce stress and increase security
- Community: liking where you live, feeling safe, and having pride in your community
- Physical: having good health and enough energy to get things done daily.
Here are the results of the top and bottom ten countries:
And the UN has since 2011 asked each country to carry out a Happiness Survey. The global report is here
If we have not already discussed it, how achievable is this? What problems do you see with? Also what benefits?
So where does this leave us? On the one hand empirical measures of a country’s success, like GDP or PPP, or even Prosperity type indices, are very much needed because as management gurus tell us “if you cannot measure it then you cannot manage it”.
But beware “We tend to overvalue the things we can measure and undervalue the things we cannot.”
So perhaps these empirical measures together with measures of the meaningfulness of what has been achieved may be what are needed. However, any meaningfulness measure is probably where the charlatans could come in and take over the debate as such metrics may be easier to manipulate.
Let me conclude with Freud.
“It is impossible to escape the impression that people commonly use false standards of measurement — that they seek power, success and wealth for themselves and admire them in others, and that they underestimate what is of true value in life.”
Or ♪♫♬♬ ‘If you to be happy for the rest of your life’ ♫♫♫♫♬♪♪
And end papers
What Makes To Me……
… Happy or Content