"Only after the last tree has been cut down, only after the last river has been poisoned, only after the last fish has been caught - only then you will know that money cannot be eaten." (An old Cree Indian prophecy)

In the societies and times we live in, we need numbers that tell us where we stand as compared to a year or a decade or a century ago.  These are the same measures that steer the systems and structures we all live in, driving governments' national and international policies.  The field of Economics helps inform this system.  The numbers we track in economics influences everything in our lives, from jobs to toilet paper to oceans to copy machines.  But what happens when we're measuring the wrong things, and when we view success in the wrong light, using the wrong numbers? 

No one will deny the existence of countless societal problems we have in the world today. As a population, are we clear on how to change for the better? No, stating it plainly, because, the economic system of measuring health and progress of our societies we have is wrong. 

The measure called Gross Domestic Product (or GDP) that is officially recognized, tracked and sanctified as the ultimate indicator clouds our judgment.  If a hurricane destroys a town, and the town is rebuilt, the resulting economic activity around construction is considered positive if you look at GDP.  The town's destruction is considered a good thing because money was spent rebuilding it. 

Now think if you were living in that town.  Does GDP sound like a good thing to you?  Is it a good thing if your home is destroyed?  Does your happiness, your lifestyle, your sense of well-being improve? 

GDP does not reflect the reality you're facing.  The good news is there are some other alternatives floating around out there.  As we get into a talk about economics, it's useful to mention a few abbreviations up front to keep it simple:

GNH - "Gross National Happiness (GNH) is an attempt to define quality of life in more holistic and psychological terms than Gross National Product". Concept extended internationally to GIH - Gross International Happiness

GPI - "The genuine progress indicator (GPI) is a concept in green economics and welfare economics that has been suggested to replace gross domestic product (GDP) as a metric of economic growth. GPI will be zero if the financial costs of crime and pollution equal the financial gains in production of goods and services, all other factors being constant."

GDP - "The gross domestic product (GDP) or gross domestic income (GDI), a basic measure of an economy's economic performance, is the market value of all final goods and services produced within the borders of a nation in a year." Equivalent terms - Gross National Product (GNP)

HDI - "The HDI combines normalized measures of life expectancy, literacy, educational attainment, and GDP per capita for countries worldwide. It is claimed as a standard means of measuring human development"

Talking About Progress

Across nations, acclaimed economists, governments, media and news-makers all bask in an artificial glow assumed from the annual increases in national ‘growth rates'. The GDP and its country-wise clones have been held up as indicators of the health of the society since the Industrial Revolution began. When machines began to replace much of human labor, it was expected that freed-up time would be spent on noble pursuits since it became steadily easier to take care of basic, physical needs.

Material possessions did free the mind - but not for higher pursuits.  Instead, that free time created the pursuit of more material possessions, more stuff.  Humans decided to pursue comfort for comfort's sake and unleashed immense energies to achieve bigger, better, faster, and more.

Quality of life became the same as "monetary progress", or in other words, money became a reflection of success.  With that shift in thinking came myriad problems: poverty among plenty, crime, and worst of all, severe environmental damage to our planet that gives us the basics we need to live.

Surely progress means more than merely more stuff?  It was only very late in the last century that a few people who opened their eyes to the bigger picture saw the immense environmental abuse and societal inequalities.  It then dawned that such linear ‘growth' could not continue indefinitely.  We are now at a stage when we can only hope that it is not too late to undo three centuries of short-sighted growth-growth informed by the wrong numbers.

So What Could Replace GDP?

Why do we need alternatives? In our kind of economies, too much weight is given to material prosperity as the true indicator of progress. This kind of economy values the tangibles - solid comforters like metal, plastic, and fabric.   The possession of more stuff means that you're getting ahead and leading the good life.  We've forgotten such things like: What is happening to your neighbor? Are you happier? Have crime rates fallen? Are we spending less on health and medicines?  Are we enjoying the life that we have in the limited time we have to live?

To put it simply-we've gone astray focusing on the quantity of stuff, rather than the quality of life we should be enjoying.

Neither economists nor the statisticians have yet been able to produce figures based on such intangibles. Using a few convenient indices, economists help their governments to base policies on these figures. Any index has to be humane - first and last. There are individuals, communities and even countries who believe that humankind does not (ought not to) live by bread alone. No religious conviction is required to appreciate that we social animals need each other, and a congenial ambience to self-thrive and strive for better well-being of the community.

Here are a few possibilities of economic measures that could replace GDP as the national and international policy-driving index:

HDI - The Human Development Index (HDI) adopted by UNDP as a measure of human development. To a certain but equally short-sighted extent, this comparative indicator too, is based on economist-trusted tangibles - life expectancy, literacy level and purchasing power. So this index fails miserably at the level of a spiritually rich and contented individual from a materially ‘backward' country, or a nation that respects and reveres all forms of life and Nature the enabler.  For example, a forest tribe who live in harmony with Nature have no need for the PPP (purchasing power parity, which is part of the base to measure HDI). Their indigenous knowledge cannot be measured against modern literacy standards. Yet their HDI would show a dismal number, and they would be labeled ‘backward', even though in many respects they are living an ideal balanced life. 

GPI - The Genuine Progress Indicator (GPI) and its variation, the Index of Sustainable Economic Welfare (ISEW) are quantifiable indices worked out by a public policy think tank in the US (and for the US only) ‘Redefining Progress' (www.rprogress.org). Since 1995, the group has been taking efforts at ‘shifting public policy to achieve a sustainable economy, a healthy environment and a just society'.  At least they got their national intentions right and clear - "We believe that if policymakers measure what really matters to people - health care, safety, a clean environment, and other indicators of well-being - economic policy would naturally shift towards sustainability".  If the GPI does become ‘official', it could make a welcome difference.

GNH - Perhaps if Bhutan had Oil, its beloved king's suggestion of Gross National Happiness (GNH) might have replaced GDP / GNP way back in 1972, when that forward-thinking monarch proposed the yardstick for his country. Nearly four decades later, that tiny nation is working hard on continuously evolving the index to enable quantifiable assessments. The fourth international conference on GNH held in Thimphu in November 2008 specifically focused on Practice and Measurement of GNH. (Look out for the fifth International Conference on GNH in Brazil sometime this year).

It is worth thinking about the questions raised by the Bhutanese Prime Minister in his keynote address at the Thimphu conference (see http://www.bhutanstudies.org.bt); indeed those queries could serve as a blueprint for economists who are earnest about bringing in the much-needed change.

1. How does one create an enlightened society within which the citizens know that individual happiness is the fruit of collective action and happiness, that lasting happiness is conditioned by the happiness of surrounding individuals, and that striving for others happiness is the most certain path to fulfilling experiences that bring true and lasting happiness?

2. How does one go about persuading people to adopt a new ethical paradigm that rejects consumerism?

3. How do we convince them that the dogma of limitless productivity and growth in a finite world is not only unsustainable and unfair to future generations, but that it squeezes out social, cultural, spiritual and aesthetic pursuits?

4. Even the justification for economic growth for poverty alleviation seems very shaky, unless we radically improve redistribution. Shamefully, little goes to poverty alleviation from the enormous wealth generated in the aggregate global economy. The same is applicable to the argument that we need to grow so that there will be money to fix environmental problems. To believe this is to believe in killing the patient to cure the disease. Evidence that we need to grow economically to be collectively happier is of course even scarcer among the rich countries.

How does one advocate a new concept of productivity, wealth, prosperity and fulfillment that has little to do with material possessions and edging out the weak and rather has more to do with social, psychological and emotional wellbeing?

5. Is it enough for us to know how to measure happiness and to hope that this will influence policy-making? Is making GNH policies and programmes enough?

6. What of political will and capacity given the fact that these, in a democracy, are responses conditioned by popular demands and aspirations? So, if people do not understand and favour GNH based policies, will politicians dare? And if they do, would they succeed? How do we begin? How do we internalize, beyond intellectual enquiry and statements, the values that we speak of?

7. How do we as academics, thinkers, scientists, leaders and concerned citizens change our own way of life and behavior?

GIH - Gross International Happiness (GIH) - Once human and environment friendly GNH becomes official, it could pave the way for GIH - Gross International Happiness. Right now, we can all take heart from the fact that some ‘non-orthodox thinkers' finally recognize that sustainable economics can and should be the allowable development model, instead of the West-induced capitalism and free-market enterprise. But corporate entities and governments will insist on waiting for - yes, economists - to sweat it out over the implications and calculations, and come up with tangible measures of the intangible.

The Coming Future

It is time humankind redefined progress, prosperity and growth. Economic indices will have to include only sustainable development factors as asset-creators, in any and all spheres of human activity. Our very existence entails environmental costs; add to this each person's (thoughtless) actions, the environmental costs increase several-fold. That Cree India prophecy is a warning that we cannot afford to overlook any longer.

Related features on Celsias:

Doors of Perception: How do *you* view the world?
Needed: A Shift in Our World View

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