Metrics for Real Success: Happiness and Beyond

Scott Lewis, Brightworks CEOScott Lewis, Brightworks CEO

“We will find neither national purpose nor personal satisfaction in a mere continuation of economic progress, in an endless amassing of worldly goods…[w]e cannot measure national spirit by the Dow-Jones Average, nor national achievement by the gross national product.”

~ Robert Kennedy, 1967 [Click for full text]

Transformative ecological, social and economic progress will require us to replace the standard methods of measuring national progress with tools more holistically aligned with the deeper values represented by our aspirational goals of creating a truly sustainable future.

Gross National Product (GNP) and Gross Domestic Product (GDP) are widely considered the standard measures of economic progress throughout the industrialized world. GNP measures the economic output of firms owned by companies within the measuring country. GDP measures the output of all firms operating in the measuring country. Close examination reveals that both measures are inadequate for creating real progress in human well-being.

GNP is a poor measure of economic success. It measures activity (production of goods and services, even if those goods and services create environmental damage or impair human health), not outcomes, such as improvement in quality of life. It also assumes economic growth is itself a sufficient goal.

The widespread observation that “you manage what you measure” points to our natural tendency to concentrate on things we can track and count, not necessarily the things that matter most. By relying on GNP as the primary scoring system of how we are doing as a nation or global society, we may be unwittingly pursuing the wrong outcomes.

In fact, a growing body of research by psychologists and economists supports this very premise – that economic progress does not equate to happiness, and that we should focus our measurement on factors that more directly address human well-being.

Metrics That Matter

In 1972, the Bhutanese King Jigme Singye Wangchuck faced a dilemma that would shape the future of his country – how to start opening his small Himalayan kingdom to carefully measured Western-style economic development while preserving the cultural uniqueness that made Bhutan a special and beautiful place.

The king’s answer included limiting access to Western media (there was no outside television programming in Bhutan when I was there in 1985), limiting tourism to a few hundred visitors per year and creating a new kind of tracking system to run in parallel with the conventional economic progress tests. He called the system Dzongha, which means “gross national happiness.” Dzongha is measured as an aggregate of scores across nine categories that influence human well-being, including:

  1. Psychological Well-being
  2. Time Use
  3. Community Vitality
  4. Culture
  5. Health
  6. Education
  7. Environmental Diversity
  8. Living Standard
  9. Governance

In 1998, Bhutan formally adopted the Gross National Happiness (GNH) system and required all laws and national policies to be designed to improve GNH.

The “Happiness Movement”

Following Bhutan’s lead, economists and social scientists started to examine how national and international development policies and measurement systems could be connected to human well-being. Entire fields of study – including Humanistic Psychology – have developed in the past 20 years around the question of what requirements must be fulfilled to support fundamental human well-being. Much of this inquiry has expanded on the well-known work of American psychologist Abraham Maslow from the 1940s and Chilean economist Manfred Max-Neef from the 1980s.

Max Neef’s Fundamental Human Needs model includes:Maslow's Hierarchy of Needs

  • Subsistence
  • Protection
  • Affection
  • Understanding
  • Participation
  • Leisure
  • Creation
  • Identity
  • Freedom 

Maslow’s “Hierarchy of Needs” has been criticized as having no grounding in empirical evidence. Nevertheless, Maslow is credited with founding the Humanistic Psychology movement, and like many early models, his theory served as a basis for much important and meaningful work that followed.  Image courtesy of the Psychology Wiki

A significant development in the “measuring happiness” movement came in 1990. Pakistani economist Mahbub ul Haq and a group of colleagues changed the way the United Nations Development Programme tracks development progress of countries “from national income accounting to people centered policies.” The ul Haq team created and deployed a revolutionary tracking system called the Human Development Index (HDI). Under the latest revision of the HDI, released in 2010, the UNDP scores and ranks nations based on the aggregate score of three indicators: life expectancy, education and income. Some of the highest and lowest scoring HDI nations are listed here:

Top 10 Countries Bottom 10 Countries
1. Norway 160. Mali
2. Australia 161. Burkina Faso
3. New Zealand 162. Liberia
4. United States 163. Chad
5. Ireland 164. Guinea-Bissau
6. Liechtenstein 165. Mozambique
7. Netherlands 166. Burundi
8. Canada 167. Niger
9. Sweden 168. Congo (Democratic Republic of the)
10. Germany 169. Zimbabwe

Where the HDI uses quantitative measures, other approaches place increased focus on qualitative measures. For instance, the World Values Survey project, conducted by Ronald Inglehart between 1999 and 2002, asked individuals in 63 countries how happy or satisfied they felt subjectively, then correlated the answers with the median income of the countries. The report showed some correlation between national affluence and reported well-being, but only across a wide range. The countries with the highest reported happiness among individuals included relatively wealthy nations, such as the US, Switzerland, Denmark and Austria, as well as less-economically advanced countries such as El Salvador, Mexico, Columbia and Nigeria.

A Plateau of Happiness, from the New York Times

"A country's wealth may not always dictate the happiness of its people", from the New York Times

Implications for Sustainability

Growing material affluence has been the central focus of economic development strategies for most industrialized or developing countries since the industrial revolution, and in some cases, dating back for millennia. And still today, when food security, health crises and basic physical security (shelter, national defense, freedom from crime, etc.) are far from universal, many individuals and countries have valid reasons to pursue greater financial stability.

For those more financially fortunate, the question is how much is enough financially? A solid body of evidence supports the case that once basic needs are satisfied, the correlation between financial and emotional well-being is more tenuous, and a strong sense of community, economic and social stability and other factors become more important.

The implications of these studies are profound for individuals, organizations, communities, regions and nations fostering a future in which economic development supports both ecological security and sufficient prosperity for the world’s growing human population. As long as policy makers use GNP or GDP as the primary measures of economic “success,” they will continue to enact and promote policies that – ironically and despite the best of intentions – undermine the needs for a sustainable or restorative future.

Even as we pursue the technological and financial tools to ensure economic sustainability, we must also redefine the metrics we use to measure progress. We can start by replacing the archaic GNP/GDP primacy with more holistic and robust tools that consider income or financial wealth as only one contributor to a greater and more appropriate goal: well-being.

Today, a “business as usual” mentality and institutional momentum and inertia stand in the way of a national success model founded on well-being. The urgency in overcoming these obstacles to the new model cannot be overstated. Hanging in the balance are the lives of billions of people and countless species – for generations to come.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: