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.