Happy or Rich? Alternatives to the dominant growth model

Karri's picture

In his 1998 address to CPJ’s Annual Membership Meeting, former Director of Public Affairs Gerald Vandezande spoke about the tremendous shortcomings of the current market system in a way that would resonate with many in the social development community around the world.

 

 

"The prevailing ideology of material progress as defined by an ever-increasing expansion in the Gross Domestic Product (GDP) is nothing short of cancerous.” He continues, “Whatever transaction can be quantified in dollars adds to the GDP, no matter how ‘gross’ the product or destructive its impact on the environment and on human beings. …The billions spent on the ongoing production of weapons of war expand the GDP. Numerous peace-building activities, however, do not. Our personal and communal search for the meaning of justice and peace does not add to the GDP. … [Such] activities have no tangible, quantifiably measureable value. Because they cannot be commodified and are not considered ‘productive’, they do not add to what our society uses to define ‘progress’."

 

 

 

At that time, however, in the context of relative economic strength in Canada and abroad, Gerald’s questioning of the global approach to development was simply added to the chorus of other progressive thinkers advocating for a new approach. The growth-based model continued to dominate.

 

 

 

 

Fast-forward 10 years to February 2008 when French President Nicholas Sarkozy raised his concerns about – as he put it – “the limits of GDP as an indicator of economic performance and social progress.”

 

 

 

Sarkozy’s musings prompted the creation of “The Commission on the Measurement of Economic Performance and Social Progress,” chaired by renowned economist Joseph E. Stiglitz. Interestingly, the initiation of the Commission’s work predates the global economic crisis by several months. Still, that same crisis – particularly when joined with the global environmental crisis – highlights the value of considering the inadequacy of GDP as a “metric to gauge wellbeing,” as well as the exploration of alternatives.

 

 

 

The Commission released its first report in September 2009. In it, the commissioners, led by Stiglitz and colleagues Amartya Sen and Jean-Paul Fitoussi, present a series of recommendations, aimed first and foremost at political leaders, on how to best measure societal wellbeing.

 

 

 

These recommendations are contextualized by a recognition that “those attempting to guide the economy and our societies are like pilots trying to steering a course without a reliable compass. The decisions they (and we as individual citizens) make depend on what we measure, how good our measurements are and how well our measures are understood. We are almost blind when the metrics on which action is based are ill-designed or when they are not well understood.”

 

 

 

The Commission’s definition of wellbeing begins with material living standards, but is expanded to include health, education, personal activities (including work), political voice and governance, social connections and relationships, the environment, and security (both economic and physical).

 

 

 

 

 

Their recommendations, in turn, propose the ways in which various aspects of wellbeing can and should be measured in order to create metrics that more adequately reflect social progress. For example, emphasizing trends in household income and consumption; including consideration of income distribution (i.e. inequality); allowing for both objective and subjective assessments; and, incorporating a long-term view through a series of “sustainability indicators.”

 

 

 

It is encouraging to note that this international initiative has a parallel in Canada. Even more encouraging – given the “affordability gap” in Canadian society and corresponding strains on societal wellbeing – is that this Canadian endeavour is already moving towards the promotion of policy change.

 

 

 

The Canadian Institute of Wellbeing was created in June 2009 with a mission “to report on the quality of life of Canadians, and promote a dialogue on how to improve it through evidence-based policies that are responsive to the needs and values of Canadians.”

 

 

 

Built around its flagship product, the Canadian Index of Wellbeing (still under development), the Institute makes connections between eight key “domains” of society. These domains, which will tracked and compared over time, are: arts, culture and recreation; civic engagement; community vitality; education; environment; healthy populations; living standards; and time use.

 

 

 

 

 

This approach responds to “the need for a more holistic and transparent way to measure societal progress” and goes beyond the traditional tendency to focus solely on economic indicators.

 

 

 

The work of the Institute and the Commission is focused on acknowledging, measuring, and promoting that which is valued in society. It is about creating metrics that focus on what is really important to our families, our communities, our country and our world.

 

 

 

In the words of Gerald Vandezande, it is about creating “an economy of grace and gratitude rather than competition and greed. From that perspective equitable economic growth could be described as the responsible, sustainable development of human gifts and natural resources that would meet legitimate human needs and contribute to the environmental and socio-economic wellbeing of all people.”

Karri is CPJ's Policy Analyst.

Comments

Submitted by Mariel on
Well put, Karri! I remember when the creation of the CIW was announced back in June, and I was happy to hear that this initiative was taking place. When I was reviewing 'Managing without Growth' by Peter Victor last year, I was surprised to learn that economic growth (and GDP as a measure of it) has only really been a top priority of governments in industrialized countries since after the Second World War. Although it's more difficult to quantify the quality of peoples' lives (as the CIW is attempting) than to measure what an economy produces, it's important to distinguish the two from one another. Hopefully the Index will help lead us on path towards understanding how to truly measure and improve the wellbeing of all in our society.

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