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A better measure of society's wellbeing

DON EDGAR

October 3, 2009

WE SEEM to have lost our sense of the common good, a belief in shared destiny, despite signs that economically, environmentally and socially our lives are increasingly interdependent. So the ridicule Leon Gettler heaps on attempts by French President Nicolas Sarkozy and others to measure progress in terms of our ''happiness'' (Opinion, 28/9) is unfair and unfortunate.
Gross domestic product has failed as an indicator of either national progress or individual happiness. Yes, it is difficult to measure happiness, and no, we don't have to be happy all of the time. Americans' manic ''pursuit of happiness'' is the root cause of much angst, therapeutic exploitation and misguided policymaking. Happiness is in the main an individual experience and it is hard to imagine how one nation can be ''happier'' than another.

But what is the point of having a measure of national progress, GDP, which is based on a paradigm that stupidly insists more is better? GDP goes up with increased spending on crime, natural disasters and tobacco, and does not count in the equation activities that destroy natural resources and the quality of life. GDP supposedly measures national income on goods and services, but excludes the cost benefits of caring for the aged, voluntary work and the value of housework and child care, all worth billions to the national economy and the nation's wellbeing.
What the Global Project on Measuring the Progress of Societies (launched by Sarkozy and leading global thinkers in 2004) did was to challenge this nonsensical picture of a nation's wellbeing and assert that, sometimes, less is better, such as less sickness, inequality, crime, and environmental damage. Amartya Sen, Joseph Stiglitz and James Heckman are not naively pursuing happiness; they are saying enough is enough, and the current global economic crisis which has brought us to the brink of disaster has proven their point.
The project's real point is the lack of shared wellbeing - one person's happiness is another's misery (as in the rich getting richer and the poor getting poorer, or global polluters' profits drowning nations such as the Maldives). Wellbeing, the quality of life enjoyed by different people, can be measured in less subjective ways. We are now told the global economy is recovering. So why don't a lot of us feel our lives are better? Because conventional economists and GDP track only the supposed benefits of economic growth, not the costs, such as increasing family stress, environmental degradation and civic disengagement.

The Canadian Institute of Wellbeing has started publishing reports on a new form of GDP, a new approach to measuring social progress. Australia's Treasury is also ahead of the game and is planning an Australian index of wellbeing modelled on the Canadian work. France, South Africa, Korea and Hungary are active too, some with more urgency than others.
The Canadian wellbeing index measures objectively changes over time in a nation's standards of living, including the way we use our time and balance work-family responsibilities. It also includes more subjective measures of civic participation and community vitality, the social capital that binds a nation together under the principle of a shared destiny.
Canada's first reports demonstrate what we should already know, but do not acknowledge in our national accounts: that higher incomes have been gained (for some families) through working longer hours and suffering higher stress; that some families with children are living longer in unemployment and with a narrowing welfare net; that improved education and higher incomes are associated with better health and greater longevity; that a nation's wellbeing reflects the combination of good living standards, healthy populations and community vitality.
In particular, we need to sound the alarm for our children, who are the real victims of a system hell-bent on profit before public benefit - economic growth without an improvement in public wellbeing.

Other correspondents on this page - Ken Davidson on the coal industry's carbon trading boondoggle, Lindy Edwards on a shrinking safety net for the jobless and Ross Gittens on the hidden costs of population growth (Opinion, 28/9) - show a greater awareness that perhaps those pursuing a more sensible measure of progress are on to something that will help guide future policies better than GDP.

Australia would do well to pursue the Canadian measures of progress rather than the damaging growth model that informs most economic modelling and government spin on how well we are doing.

Dr Don Edgar is a member of the Victorian Children's Council, was foundation director of the Australian Institute of Family Studies and is co-author of The New Child: In search of smarter grown-ups.