What is success? A Potlach Indian from the Northwest measures success by how much he or she can give away to help others. An average Wall Streeter might describe it in terms of rising stock portfolios, a bigger car, and swankier apartment. To an Amish farmer in Pennsylvania, success is a well built home, fertile fields and independence from technology and the evils of gig city life. For a Chinese peasant, it's a low-paid job in a city factory. for most of us, a happy home and personal life are the basic hallmarks of success. As notions of success vary in our six-billion-plus member human family in today's global economy, so do the ways countries and corporations measure and define success, wealth, and progress.
Every day, hundreds of thousands of reports in all media discuss the status of the Gross National Product (GNP) and its narrower domestic version the Gross Domestic Product (GDP), the favorite measures of economists to assess our national progress. Devised by Samuel Kuznets in the twentieth century, GNP and CDP are simply cash-based measures of the total goods and services produced in an economy. During World War II, Britain adopted the GNP as the primary measure of war production in fighting Nazi Germany. In 1945, with peace and the founding of the United Nations, the World Bank and the International Monetary Fund (IMF), the U.N. ad¬¨opted the GNP and GDP, which became the standard U.N. System of National Accounts (UNSNA). Gradually, they morphed into the global yardstick of success slavishly reported in all media and followed feverishly by legions of policy wonks‚??whether social progressives, reformers, or reactionary conservatives. Yet, because GNP and GDP are money measures of output of goods and services pro¬¨duced within a nation, neither looks beyond economics to understand genuine value creation within a society. Today, more and more groups‚??from environmentalists who value nature, to women who perform most of the world‚??s unpaid work, as well as those concerned with social justice‚??are critiquing GNP/GDP and a host of other economic indicators.
They ask common sense questions that are difficult and embarrassing for economists. Why do they focus on money and factories as capital and so often ignore human and social forms of capital, as well as ecological assets, like rain forests and biodiversity? Why does GNP treat education as a cost instead of a vital investment in our future while not accounting for its quality? Why does GDP go up when people are sick and have to pay for health care but doesn‚??t include ways to measure wellness? Because GDP reports people‚??s average incomes, it obscures poverty gaps (a country‚??s average income can rise when a few millionaires get richer while most people could be homeless). And why does GNP set the intrinsic value of people and the environment at zero? Economists avoid or evade such questions. While the GDP does shed some light on the way we spend our money, it doesn‚??t count many of the things that actually make life worthwhile. In the past few years, these questions have led to debates within the economics profession and to a host of new, multi-disciplinary indicators of well-being and quality of life‚??beyond economics.
So how can each of us also work toward a broader integration of value and values that ensures the health and viability of the places in which we live? Betsy Taylor, who founded the Center for the New American Dream, a non-profit research group in Washington, D.C., advocates simplifying our lifestyles. ‚??The Center is a group that‚??s working to help Americans live consciously and buy wisely. The Center did a national poll of 1200 adults in August of 2004 and we were asking Americans, ‚??So how do you feel about the American Dream? What do you think about materialism?‚?? And overwhelmingly people are worn out. One of the most surprising results of the poll was that almost half of Americans say that they have actually taken a pay cut to get more time in their life for things they really care about.‚?Ě (www.newdream.org) Betsy‚??s findings also match others in networks advocating ‚??Voluntary Simplicity,‚?Ě borrowed from the 1973 perennial by Duane Elgin, www.simplelivingamerica.org. Betsy notes some deeper uneasiness, ‚??They‚??re also saying they want more time for family, they want more time for community. There are so many costs to our ‚??more is better‚?Ě definition of the American Dream. First and foremost is our own quality of life.‚?Ě Betsy thinks the new indicators of success and the new definitions of both economic progress and personal happiness are absolutely critical. Betsy is part of a worldwide movement that surfaced in 1992 at the Earth Summit in Rio de Janeiro, to overhaul economic indicators from GNP and GDP to better measures of unemployment, unpaid work, along with social and environmental costs and benefits. One hundred seventy nations pledged at that Summit in its Agenda 21 declaration, to make all these revisions to their own GNP and GDP indexes.
By 1995, the World Bank released a report, The Wealth of Nations, which should have led to an overhaul. It found that 20 percent of a nation‚??s capital was financial and ‚??built‚?Ě capital (financial capital, factories); 60 percent was social and human capital (citizens and social organizations) and 20 percent was ecological capital (nature‚??s life-support systems). Yet this World Bank report was as widely ignored as the earlier Agenda 21. The GNP/GDP habit was still deeply ingrained and reinforced daily by mass media. A more widely accepted set of new indicators is the United Nations Human Development Index (HDI), started in 1990, which ranks nations according to the quality of life and includes criteria such as life expectancy, educational attainment, and the gap between rich and poor and size of military expenditures.
Inge Kaul, a petite, energetic German economist deeply committed to more sustainable forms of human development, was a key pioneer of the HDI, along with the late Mahbub ul Haq, a former Finance Minister of Pakistan. Inge still works with the United Nations Human Development Program as its director of Development Studies. Inge explains, ‚??What this indicator‚??the Human Development Index‚??really tells us is how nations translate their economic growth‚??to the extent that they have it‚??into human well-being. What we try to do with the HDI index is to say, ‚??Now we work hard, we undertake all kinds of economic effort but at the end of the days are people better off than they were before?‚?Ě She adds, ‚??what you find in the index is life expectancy‚??the opportunity to live a long and healthy life; education‚??so that you know what exists in terms of opportunities so you can make an informed choice. Then, with a certain amount of income, we have the means to get properly clothed, housed, and lead a rather secure life.
So we used these three indicators and we added them up to produce one index‚??the HDI. [Insert photo 102 pic of Inge] We thought we would succeed in turning around people‚??s optic about what is progress, what is success, what makes for a good life.‚?Ě The HDI has been adopted worldwide as an alternative, broader measure of human development and over forty countries now produce their own domestic versions of HDI. The highest-ranking countries often cite their HDI rank in their tourist information. The United States‚?? ranking is often lower than Canada and the Scandinavian countries, due to our higher infant mortality rates. In the 2004 HDI, the most livable countries were Norway, Sweden, and Australia. In 2005, Norway again topped the list, followed by Iceland, Australia, Luxemburg, Canada, Sweden, Switzerland, Ireland, Belgium, and the United States in tenth place.
Bhutan takes seriously people‚??s right to the pursuit of happiness. A Buddhist nation in Asia, Bhutan may not have economic might but does have a wealth of inner resources. Bhutan has developed Gross National Happiness (GNH) indicators because in its philosophy, happiness should be considered along with money and GDP growth. Many indicators in Bhutan focus on similar trends as the HDI, with an emphasis on preserving Bhutan‚??s peaceful, contemplative culture, while balancing these concerns with outside investment influences and selective economic development. Bhutan‚??s GNH sparked enormous media interest. Even the London-based journal, The Economist ran a three-page story ‚??The Pursuit of Happiness,‚?Ě (Dec. 18, 2004) and Technology Review in its January, 2005 issue explained in ‚??Technology and Happiness,‚?Ě why more gadgets don‚??t necessarily increase our well-being. All the attention on Bhutan led to a tourist boom that is being carefully controlled. Many economists and social scientists quietly studying human ‚??satisfaction‚?Ě found themselves in the limelight and happiness surveys are now, happily, fashionable and proliferating. A New Yorker review of books on happiness (Feb. 27, 2006 covers psychological studies including Jonathan Haidt‚??s The Happiness Hypothesis (2006) and economist Richard Layard‚??s Happiness: Lessons from a New Science (2005), but places the launch of positive psychology in the late 1990s rather than in the 1960s by Abraham Maslow in his ground-breaking Toward A Psychology of Being (1963). Erasmus University in Rotterdam runs a world database on happiness, while economists tend to agree with Daniel Kahneman, a Bank of Sweden prizewinner, who finds that income levels have little to do with how much people enjoy their lives. He hopes to establish an official measure of national well being in the United States to complement GDP. This is the purpose of the Calvert-Henderson Quality of Life Indicators I co-created with the Calvert Group of socially responsible mutual funds, launched in 2000 and updated regularly at www.Calvert-Henderson.com, which we use in our TV series. All the ferment about the goal of ‚??human development‚?Ě (to which economic growth had been assumed as the means) led to more focus on humanity‚??s life support system: planet Earth, and the sustainability of the biosphere and its vast ecological assets. TIME in its January 17, 2005 article reported that where people live is a key influence in ‚??feeling good,‚?Ě based on studies of Subjective Well-Being (SWB) by psychologists Robert Biswas-Diener of Portland State University and Ed Diener of the University of Illinois. Latin Americans in many studies are among the happiest people in the world‚??among the least happy were Russians, Lithuanians, Japanese, Chinese, and South Koreans. A new Happy Planet Index from the New Economics Foundation in London reached similar conclusions.
The Swiss economist Mathis Wackernagel, developer of the Ecological Footprint Analysis sums up his environmental, resource-based approach to human well-being. ‚??There are these two big stories in civilization that seem to be in contradiction. On the one hand that we have better and better lives, that we use more and more resources, more chocolate, more houses, bigger cars. And at the same time, ecological capacity is going down‚??less trees, more CO2 in the atmosphere, less water. So we have ecological degradation happening at the same time as we increase our demand for resources.‚?Ě Mathis prepares an annual survey for the World Wildlife Fund, ‚??The Living Planet Index,‚?Ě which monitors all countries to see how their own resource-consumption fits within their nation‚??s natural resources. The results are published in a map showing which countries exceed their resource-ca¬¨pacity and rely on imports from other countries and which can stay within their own resource-base. On a plan¬¨etary basis, Wackernagel finds that the human family is consuming more resources than the planet Earth can provide on a sustainable basis. Dr. Wackernagel adds, ‚??The Ecological Footprint is a very simple resource accounting tool. On the one hand it measures how much nature we have and on the other hand how much we use. It‚??s interesting that actually some lending institutions have used the Ecological Footprint to evaluate the countries in terms of financial risk. Are they ecological debtors? Does that mean they use more resources than they have available? Or are they creditors? Now the creditors are countries like the green super powers, Brazil for example or Russia.‚?Ě Mathis emphasizes that it doesn‚??t mean that these countries use their resources very wisely, it just means they have a lot compared to what they use. ‚??We have the debtors, those who actually use more, like Switzerland, where I‚??m from. That‚??s why, for example, we worked with London. The London Business Council‚??not just a green group‚??actually sponsored a study to look at how London can stay competitive using their ecological footprint because as resources get scarce cities that are not positioned for the future will have a harder time.‚?Ě (www.footprint.org)