Replace GDP with something that reflects real quality of life
WorldChanging has a great post on the move to replace GDP with a better metric -- one that better reflects human quality of life as opposed to mere economic activity. This has been underway since RFK excoriated GNP (GDP's predecessor) as "not allow[ing] for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials."
A National Academy of Sciences panel, for example, has laid out an exhaustive, sober, and detailed plan for issuing regular reports on several “satellite accounts” in tandem with the monetary tally of GDP. The present administration stopped the Department of Commerce from adopting the improved methods.LinkA new president, supported perhaps by Senator Dorgan and like-minded leaders, will have the opportunity to seize the challenge RFK threw down four decades ago. The implications could be broader than you’d imagine. For example, whether we’re in a recession or not depends entirely on what our system of national accounts includes and excludes.
Imagine the news stories that might follow if satellite accounts were published along with GDP figures: "GDP up; parents' time with kids plummets." "GDP flat; education surges." "GDP and resource depletion both soar."
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It's weird that the political party that's supposedly pro-business would be so averse to measuring quality of life. Even the most thick-headed businessperson knows that you don't measure business activity, you measure business outcomes.
Bhutan's former (but still living) king proposed Gross National Happiness as an alternative to economic indicators as the only signs of success.
Dear readers,
Nowadays we relate too much the quality of life with GDP, however if in one hand we have enough money to make everyone happy, on the other the quality of life of many people in this world is far from satisfactory. And I'm not only referring to the known cases of poor regions of the globe. I'm talking about living in a metropolis, where a person works 8 to 12 hours per day, passes alot of time on public transports, dislikes the work and on the return to home people don't smile and ask how was the day, how's life or if that person has any problem and would like to talk about it.
I've come to the conclusion that one of the biggest problems of today's society is the lack of interest that people show upon other's; except maybe when there are negative rumours and things alike.
This is not quality of life. Quality is to work less hours, spending time with friends and living in a world where we know that there isn't someone dying because it doesn't have anything to eat.
Wish you all a good Easter (Páscoa in my language)
Take care,
José
Great concepts and much more complete and telling measures than our current system. Sounds similar to the remarkable work of Riane Eisler in The Real Wealth of Nations just recently released.
We have an opportunity and within it challenges - the question: are we collectively up for it?
Why would the American press as we know it show any enthusiasm for such headlines when it is against the interests of their largest shareholders? How often do they use the U.N.'s QOL reports already available? Does having such reports issued by the U.S. govt instead make them somehow 'OK' for our press to use?
Even if reporting QOL indicators against GDP came into vogue, there's every indication that the QOL terms themselves would be twisted into nonsense - another national sham. I am reminded how the greedy and religious have co-opted the language of humanism and human rights to start wars and go profiteering.
I don't think any of the current trends will be improved upon until the average American learns to filter their education, news and culture intently through class consciousness. The only question is how big of a fall, if any, will it take for people to train a such vigilant eye on privilege.
The problem isn't with GDP. GDP is a pretty good metric for measuring a wide variety of things, even if it's so broad that it can't capture important specifics. The problem is with people who solely equate an increasing GDP as progress against all other measures. However, without economic growth, improving quality of life becomes very difficult. So, linked but not causal.
As an added benefit, "quality of life" is such a nebulous concept that it'll be utterly trivial for the psychometricians to come out with whatever numbers their bosses need in order to look good.
The King of Bhutan has been out front on this one.
http://en.wikipedia.org/wiki/Gross_national_happiness
Please leave the GDP alone. It's never hurt anyone. People can be running a great business, in multiple countries, with over a million employees, with the best healthcare, 16 weeks vacation time, and the strongest 401K out there, and still be miserable or have a horrible home life, divorce, suicide, death in the family, it really doesn't matter. My question is when are these statisticians going to ask the question of whether or not I'm happy? Early Monday morning, Friday night? You are either happy, pissed, or somewhere in between. The quality of life can change in a moments notice, it seems to me that this is a lot of happy horse shit.
My question is when are these statisticians going to ask the question of whether or not I'm happy?
Clearly "now" is the wrong answer.
I think the only way to put a bullet in this problem is to simply acknowledge that (happiness) quality of life can never equal a number. If it does than your life lacks quality. ;)
GDP is just one indicator. The UN has put a lot of time and work into other relevant indicators of human welfare. There have even been "sustainability indices" posited.
The problem isn't so much a lack of measures, as our use of them. So long as all parties in a society seek the most reductive "indicator" to reference all progress, it's never really going to achieve much. Now...whether business should adopt more measures and be held to account for them every bit as strongly as returns is an issue worth debating. After all, so long as business retains its cultural primacy on these measures, then these other ones, no matter how good at painting a richer portrait of a given situation, will always be secondary, or left to the wonks.
Yeah, the GDP could never be "replaced" with something that reflects "quality of life." GDP is an economic indicator, no more. Perhaps you could try to get people to focus less on it, and maybe even introduce measures for other aspects of life, but that wouldn't be replacing GDP.
IE: In the US, GDP is released by the BEA - Bureau of Economic Analysis. Not the BHED - Bureau of How's Everyone Doing. They're the ones we should ask about relative happiness.
Happiness between people cannot be compared. There is no unit for measuring happiness. You cannot be "7 more happy" than I am.
GNI per capita, in purchasing power parity dollars, is a fairer measure than straight GDP, but you have to take into account access to water, human rights, environment, school enrollment and completion rates, maternal mortality, and multitudinous indicators of quality of life. The UNDP's Human Development Index comes close, but all these factors combine to form a big picture that simply can't be reduced to one number.
My job is typesetting books of these indicators. I read them every day. It doesn't take long to realize that while GDP (though PPP GNI is used more now) is just an economic indicator, the trends among all those other indicators are pretty much tracking it. Yes, the manufacturing dollars in China mask bad human rights and environmental indicators, but China (and India, and a few others) are gross outliers on a pretty clear curve.
Thank you DCULBERSON. It is not BEAs fault the media equates GDP with quality of life. Does anyone think an increase in GDP makes his life better?
GNH?
Gross National Health?
How silly. First of all, GDP is just an economics number. Do you really want your bank to say, "We aren't going to tell you how much you have in your bank account - because happiness isn't measured by the amount of money you have in the bank." The definition and value is what it is - even if people make wrong assumptions about it.
Second, how would you even measure those things? You're going to measure "beauty of our poetry or the strength of our marriages, the intelligence of our public debate"? Yikes - tell me that isn't ripe for propaganda. I can already see governments rewriting their own numbers. China says Tibet is very, very pleased with their Chinese overlords, Saudi Arabia is doing far better than the US in the "our poetry is beautiful because it praises Allah" scale, and Iraqis are experiencing vast upswings in the 'happiness index' ever since the US invaded? Okay, whatever you say. The fact of the matter is that the desire to twist this information is directly proportional to its popularity. If it ever became very popular, the powers-that-be will twist it into being worthless.
Third, just because Robert F. Kennedy gave a speech mentioning the deficiencies of GDP in measuring happiness doesn't mean he advocated creating an index for it, and it doesn't mean he thinks it can be measured. The last sentence of the article: "Somewhere, Robert F. Kennedy is smiling." is purely wishful thinking. Even if you could attach a number to these things - from the "strength of our communities" to the "integrity of our natural heritage" - all highly subjective values - the way you compile them together into some larger index is also highly subjective. You might think that the government is underestimating the "destruction of the environment" and the beauty of emo in our society. Other people might complain that "immigrants are messing up our society" and a number should be attached to that. Someone else might think the "strength of our communities" should be weighted much, much heavier in the resulting index.
I think the whole thing is just plain silly. Why not declare that America has a bubillion scrumpfuls and that no other nation in the world even comes close?
Are we sure we want to know?
Cost Of Living Now Outweighs Benefits
http://www.theonion.com/content/node/30975
Sarkozy, as well, proposed this in France, which I feel like was mentioned on BB. Do you know whos really interesting on this topic? Leonard Cohen, actually:
Things are gonna slide,
slide in all directions:
there wont be nothing
you cant measure anymore.
and
Everybody knows this thing is dead
but theres gonna be a meter on your bed
which will disclose
what everybody knows.
The idea is precisely that a happiness that can be measured is an idealogical construct. Unsurprisingly they turn to this when the economy starts to tank. might as well judge a country on the number of Nintendo Wiis, since a Wii is a pretty accurate indicator of happiness; loneliness, maybe, as well, but happy too.
It shouldn't really make a difference either, I don't think, because it isn't exactly a hot topic, the GDP, making it of limited idealogical value... Although, I must add the premise that the market is measured in happy is as idealogical as it gets. The market exists for its own alien ends.
Even Adam Smith was candid about the deceptiveness of productivity and the quality of life:
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The pleasures of wealth and greatness... ...strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it. And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind [...well beyond what the planet and its souls can sustain, we might now add]. -Adam Smith The Theory of the Moral Sentiments
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Jeffrey MacManus:
A very good question.
They're not really pro-business; they're pro some businesses. Otherwise they'd remember more often that if you play "beggar thy neighbor," the neighbor you've beggared frequently turns out to be one of your customers.
What they are consistently is the party of cheap labor, and the clear, consistent measurement of quality of life issues makes that more difficult. You can't simultaneously make speeches about how people have to work harder and take more responsibility for themselves, and parents have to pay more attention to their kids, if one of your standard metrics shows that the people who are working for substandard wages are also taking second jobs to make ends meet; their kids are getting less of eveything from parental contact to decent nutrition; and their kids get into more trouble and do worse at school.
I remember hearing in the 90s -- one of those blips of statistics that goes flitting by you, but doesn't get a general public discussion -- that discretionary personal time had fallen 20% since the 1970s. If we measured quality of life along with GNP/GDP, that loss would have stuck out like a sore thumb.
"It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials."
Maybe because these are all personal issues the health of which depends largely on personal choices, and doesn't have nearly as much to do with economics as many people may think. Lumping these issues into collective responsibility is all this is about, and it's Marxist.
And please everyone, stop all the blathering about less free time, this is largely a result of women joining the work force in droves. The benefits of which have been a massive increase in productivity among other things, but less quality of life for our kids.
The way we describe our Quality of Life is so subjective. How would our flawed governement standardize the index? Would we each take an MMPI and integrate the results with our income and expenses? I think I agree with JCD to the extent that some this sounds more like Utopian Marxism. As we have seen in America, the standard of living for many became unrealistic. Quality of life increased with dept load, which I'm afraid helped get us into this junk morage trouble. The Buddha said that true freedom from grief is only achieved when we give up our materialism. Less stuff > less demand > less productivity > less wealth > poverty inforced by philosophy. But what the hell, we'll all be free from the trappings of the material world and we'll be happy. Right?
The main dissenting argument among these comments seems to be "there's no unit to measure happiness, so the idea of creating an absolute measurement of such a thing is ridiculous".
I'd like to ask everyone who's open-minded enough to take a step back and apply the same perspective to the GDP, and the concept of economic value.
Somebody said "you cannot be 7 more happy than me", which is true, but isn't it similarly absurd to say "you're 7 more valuable than me"? It's fair to say that attaching a numerical unit-value to happiness is arbitrary and doesn't reflect reality, but I think it's also important to acknowledge that specific market indicators are just as arbitrary.
For some obvious examples of the failure of economic metrics, consider: the real value of a pound of rice fluctuates wildly depending on how much you like rice, whether you're starving, etc. But the economic value is simply "$3". Similarly, the real value of an hour of your time is utterly dynamic - some hours you would probably give anything to keep, others you'd give anything to skip. But the economic value of the hour is simply whatever your hourly wage is. Fundamentally, money fails at representing value just as much as a happiness metric would.
Ironically, the proponents of a quality of life metric, have caused their detractors to come to grips with the really important point: any time people start taking quantifications of subjective phenomena too seriously, bad things happen.
Somebody said "you cannot be 7 more happy than me", which is true, but isn't it similarly absurd to say "you're 7 more valuable than me"?
The problem is the way you phrased the statement. Saying "you're 7 more valuable than me" leaves out the units (7 what?) and also incorrectly assumes money measure the value of a person. If you formulate it correctly: "you have $7 more than me", it makes sense. You can measure dollars and cents. You can't measure "the beauty of your poetry" or the "intelligence of our public debate".
You can measure dollars and cents.
But that's a tautology, it's like saying "you can measure numbers". Yeah, dollars exist specifically to be measured/counted. But more to the point, they exist to represent the abstract concept of value, and make it easy to measure/count.
But money fails at representing value. You can't accurately quantify the beauty of a poem for the same reason you can't accurately quantify the value of a loaf of bread: they both involve a subjective interpretation - the bread is hugely valuable to some people, and worthless to others, depending on their situation and perspective.
What I'm saying is that yes, you can measure money, and say "This bread is $5 and this gold bar is $50,000", but that doesn't accurately reflect real value. We've developed an entire elaborate "science" called economics to try to explain and rationalize the inconsistencies between money and value, and come up with theories whereby something's "dollar value" is the only kind of value it holds. And because of the focus on money in our societies, we've come to analyze almost everything exclusively in terms of dollar value.
That's not reality though, it's just a game we've made up and decided everyone should play. Sort of like the GDP, come to think of it...
Essentially, saying something is "worth more dollars" does not mean it's more valuable, and vice versa. Therefore, the metric of dollars is just as arbitrary and distortion-prone as a metric to measure happiness.
This bread is $5 and this gold bar is $50,000, but that doesn't accurately reflect real value.
Particularly if you're hungry. When a chicken sandwich in downtown Harare jumps from $60,000,000 to $95,000,000 in two days, it's hard to have faith in any 'objective' valuation. We're entering an economic cycle where if you can't eat it, drink it or fuck it, you might as well throw it away.
Individual cases are too small a sample. Money can't always buy happiness, and we could point to any number of cases where that's true; but overall, people with more money tend to be happier and live longer than people with less.
The same goes for quality-of-life metrics. What you, specifically, do with one particular free hour may or may not make you happier or more fulfilled; but overall, people who have some disposable time are happier than people who have none.
This is why we do statistical studies of large groups: to quantify in the general case what's unquantifiable in the particular.