Measuring the nation’s wellbeing

Good to see the Guardian covering some of the issues that we have been discussing here on this blog.

Although the headline is ‘Happiness at work: why it counts,’ this is about much more than just our work lives. I welcome the government’s call for a ‘Wellbeing index’ to track whether our lives are actually improving as well as simply whether economic activity (GDP) is increasing. Unlike GDP which is just a measure of income, wellbeing is more like an asset on a balance sheet because it is enduring. It is a measure of value that has been created for people and societies (human and social capital.) This forms part of the ‘National Balance Sheet’ idea that economist Umair Haque has proposed and I wrote about recently.

It seems incredible to me that this is actually a new idea. What is the point of the economy and indeed even the government at all if not to improve wellbeing over the long-term? It is about time we actually started tracking ‘that which makes life worthwhile’ as Robert F. Kennedy put it. I would like to see GDP relegated in its importance and the Wellbeing Index expanded into a full balance sheet to show the value that we are building (or destroying) over time for people, societies and the environment as well as financial capital.

There will be some shocks as the government, corporations and society wake up to the fact that much of what increases GDP actually destroys value on our ‘National Balance Sheet.’ But we need to go through this process to learn how to shape our systems and institutions to deliver value where it really matters.

6 thoughts on “Measuring the nation’s wellbeing

  1. Of course you are absolutely right that there’s more to life than GDP but the problems associated with populating a Wellbeing Index with meaningful data are immense.

    Who will decide what is appropriate for inclusion in the index?

    When ascertaining data for input will the responses to questions asked be graduated by the wealth, ethnic origin, educational qualification level or physical health of the respondants? If not, why not given that all of these elements (+ others) will influence many of the responses being requested / offered.

    Or should we use something like the much denigrated technique used when establishing LIBOR, i.e. exclude the upper and lower quartile of responses and establish a mean average of the remaining responses to exclude extremes!!!

    Indices which measure such things as income inequalities within a society are useful indicative tools but, unless you have predetermined in advance that income equality is an invariable ‘good thing’ to be invariably aspired to, what is it really telling you about anything. Have there not been numerous examples in history of societies which had massive income inequalities but which were perceived to have been happy and settled societies?

    You’re setting yourself a worthy task Tom but one where you will have great difficulty measuring the degree to which you are realising your objective (which I interpret as being the betterment of all, including yourself).

    If you can ever think of any way in which I can be of help in realising your worthy objective let me know; I’ve got time and some limited brainpower to offer.

    • I agree – it’s tricky, by definition, to measure the intangible. For me it’s less about the specifics of how we measure, and more a recognition by government and corporations that gains in human, social, environmental (etc) capital are the purpose of their existence and money is simply something that helps grease the wheels. I want to scream each time I hear politicians talking about ‘growth, growth, growth’ (of GDP) being the most important thing. I know there’s an implication in there that they believe that if we improve the nation’s income then wellbeing will follow, but this is simply not the case. Why not make it explicit that we are looking to grow in the areas that really matter?

  2. I’m all for this and I don’t think it needs to be that complex – or perfect from the start. Just beginning to measure well-being at least starts to give us a benchmark and shows a commitment to something other than GDP (which might influence other people to take it more seriously)

    The ONS currently measures well being very crudely, with four simple questions on life satisfaction (http://www.ons.gov.uk/ons/rel/mro/news-release/initial-investigation-of-subjective-well-being—ons-opinions-survey/initial-investigation-of-subjective-well-being—ons-opinions-survey-nr.html) but clearly it could be *bit* more detailed than that. The OECD’s ‘How’s life?’ report looks at things like health, time spent with your children, access to services – all pretty good measures of quality of life.

    The other thing to think about is that once we start to measure anything, people usually begin to design to make those numbers look better – this can be good, or bad, depending on what the metrics are and what unintended impact it has. But my point is, start to measure wellbeing and take the reporting of it seriously, and maybe people will start to design for it better.

  3. I really enjoyed reading this post Tom; its a subject that I have been giving quite a bit of thought to recently, since I watched Nic Marks’ TED talk ‘The Happy Planet Index’ ( http://www.youtube.com/watch?v=M1o3FS0awtk ). The happy planet index puts an environmental slant on this issue (the most happy life years for least impact) which perhaps over complicates matters a little but its an interesting concept.
    I completely agree that it is important to make an attempt to try to measure and increase happiness. Even though happiness is a subjective judgement there is a wealth of research about what factors promote happiness so it should be possible to find simple measures that give a reasonable indication of the happiness of a nation. Measuring and comparing these indicators over time surely gives a better indication of progress than growth of GDP. Beyond a certain level of wealth the the choice between an increase in GDP or an increase in happiness is an easy decision for me to make.

  4. Pingback: Capitalism AND socialism are failures but we can do better | Tom Nixon

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