Lollipops image via st3f4n/flickr. Creative Commons 2.0 license.
This week has seen an unusual flurry of mainstream media interest in alternatives to GDP, following a UN symposium on the subject in Malaysia. It’s nice to see new measures of progress getting some coverage, but frustrating that, as so often, the well-being agenda has tended to be trivialised. The Telegraph led with “Lollipops, washing machines and sleeping patterns show a nation’s true wealth”, while the Independent picked up on a suggestion that the likelihood of hearing birdsong was a good indication of quality of life in cities.
The problem is that focusing on lollipops and birdsong feeds the perception of well-being as a fluffy agenda that lies outside the economic sphere – or, even worse, an indulgence for the better-off, out of touch with people’s lives in tough economic times. This is encapsulated by David Cameron’s comment in 2006 that “We should be thinking not just what is good for putting money in people’s pockets but what is good for putting joy in people’s hearts.” Someone on the breadline might retort that having a bit more money in their pocket would help put some joy in their heart, thanks very much.
But of course, that’s exactly the point. Putting well-being first instead of GDP doesn’t mean you don’t care about people’s living standards – on the contrary, a decent standard of living is a basic prerequisite for a flourishing life. This means the Independent’s concern that non-monetary measures “could be used as an alibi for the growing divide between rich and poor” is misplaced: an economy that was run to maximise well-being would care more, not less, about reducing poverty and inequality.
Poverty and deprivation are strong predictors of low well-being, but further up the income scale the link between money and well-being almost disappears – with relative income seemingly at least as important as absolute income. Increasing the incomes of the lowest paid will deliver huge well-being dividends, but the same can’t be said for increasing aggregate incomes in the economy as a whole – in other words, GDP growth – particularly if the fruits of that growth go disproportionately to the rich.
Indeed, it’s GDP, not well-being, that has historically been used as an “alibi” for inequality. GDP only tells you the size of the cake: it says nothing about how that cake is distributed. And for decades we have been told that if we freed “wealth creators” to grow the size of the cake, the benefits would trickle down to those at the bottom. We now know that this is untrue: in fact, average living standards in the US and UK have been stagnating since before the crisis, while the gains of growth are increasingly captured by those at the top.
Of course, well-being is about more than money: the evidence shows that our well-being is crucially determined by a whole range of factors ignored by conventional economic analysis, from health to job security to the strength of our communities and social relationships. An obsessive focus on economic growth may damage rather than enhance well-being, for example by weakening social connections or driving up pollution. And GDP encourages us to celebrate anything which makes the economy look bigger, no matter whether it is good for bad for well-being, while leaving unsung the creators of other kinds of social value such as those in the community sector.
The real strength of well-being analysis is that it combines economic andnon-economic elements of progress, and shows how conventional measures fail us on both counts. So please, don’t let the defenders of GDP pretend that they’re the ones standing up for the poor – well-being is about more than lollipops and birdsong.