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Forget GDP - New Zealand Is Prioritizing Gross National Well-Being
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=50599"><span class="small">Sigal Samuel, Vox</span></a>   
Sunday, 09 June 2019 13:42

Samuel writes: "We usually think of a country's wealth or capital in terms of its financial bottom line: its gross domestic product. But New Zealand challenged the world to assess it in terms of a very different commodity, as the country released the first-ever 'well-being budget' on May 30."

New Zealand prime minister Jacinda Ardern wants to prioritize national well-being. (photo: Hagen Hopkins/Getty Images)
New Zealand prime minister Jacinda Ardern wants to prioritize national well-being. (photo: Hagen Hopkins/Getty Images)

Forget GDP - New Zealand Is Prioritizing Gross National Well-Being

By Sigal Samuel, Vox

09 June 19

The country’s new “well-being budget” emphasizes citizen happiness over capitalist gain.

e usually think of a country’s wealth or capital in terms of its financial bottom line: its gross domestic product. But New Zealand challenged the world to assess it in terms of a very different commodity, as the country released the first-ever “well-being budget” on May 30.

To Prime Minister Jacinda Ardern, the purpose of government spending is to ensure citizens’ health and life satisfaction, and that — not wealth or economic growth — is the metric by which a country’s progress should be measured. GDP alone, she said, “does not guarantee improvement to our living standards” and nor does it “take into account who benefits and who is left out.”

The budget requires all new spending to go toward five specific well-being goals: bolstering mental health, reducing child poverty, supporting indigenous peoples, moving to a low-carbon-emission economy, and flourishing in a digital age.

To measure progress toward these goals, New Zealand will use 61 indicators tracking everything from loneliness to trust in government institutions, alongside more traditional issues like water quality.

Ardern, who has spoken of empathy as the trait most needed in political leaders nowadays, said that her government has “laid the foundation for not just one well-being budget, but a different approach for government decision-making altogether.”

This approach appeals to many progressives, but it’s also attracted criticism from some who think it’s airy-fairy marketing spin at best and fiscally irresponsible policy at worst.

“New Zealanders won’t benefit from a government that is ignoring the slowing economy and focusing instead on branding,” said Amy Adams, a lawmaker in the opposition center-right National Party, in a statement. “We’re facing significant economic risks over coming years, but this government is focusing on a marketing campaign.”

Critics worry that Ardern’s approach will set the country back financially, and argue that it’s a government’s responsibility to look out for overall economic success rather than the happiness of individuals. Some think prioritizing the latter is ineffective. “If addiction and suicide rates fail to improve, will the government be prepared to dial back this spending?” said Louis Houlbrooke of the New Zealand Taxpayers’ Union. “Or will it just throw more money into the black hole?”

Though its effectiveness has yet to be tested, the government’s plan does seem to be a good-faith effort to try something new. For instance, it’s investing more than $200 million in services for survivors of domestic and sexual violence, which Ardern said is “the biggest single investment ever” in the issue in New Zealand’s history.

Ardern’s supporters also emphasize that money isn’t the only type of capital that matters. Mental health and a sense of community, for example, are equally important forms of capital even though they may be more intangible.

It’s an approach that merits serious consideration. At a time when some argue the traditional capitalist model has made us more anxious and isolated than previous generations, defining success less strictly in terms of wealth and more in terms of overall well-being is likely to appeal to many people. Other countries may come to embrace New Zealand’s approach. In fact, some have already anticipated it.

The history of using well-being to measure a country’s success

New Zealand isn’t the first country to consider the well-being approach, though it is the first to release a budget explicitly centered around that concept.

The fourth king of Bhutan coined the term “gross national happiness” in the 1970s, when he began asserting that “Gross National Happiness is more important than Gross Domestic Product.” It was more than just a quippy one-liner. By 2008, Bhutan had officially enshrined GNH in its constitution.

Amid the global financial crisis, national happiness became the subject of policy conferences and college courses. France commissioned a study on it, which leading economists — Amartya Sen, Joseph Stiglitz, and Jean-Paul Fitouss — completed in 2009. In 2011, the OECD released its first well-being report on its member countries, and in 2012, the UN began releasing its annual world happiness report.

This year, Finland, Denmark, and Norway earned the top three spots in the international ranking of happiest countries. Bhutan came in 95th place.

Nevertheless, Bhutan continues to closely monitor its 800,000 citizens’ happiness as its most precious commodity. NPR has reported on the process:

Every five years under the direction of the Centre for Bhutan Studies and GNH Research, survey-takers fan out across the country to conduct questionnaires of some 8,000 randomly selected households.

Bhutan asks about 300 questions. … Happily, the participants are compensated a day’s wage.

As one of the center’s lead happy index researchers, [Dorji] Penjore says, “We try to measure ... all forms of capital. So that is the difference between GDP and GNH.” He says, for example, the government asks people about their spirituality: “Do you meditate?” says Penjore. “How frequently do you pray?”

They ask how much time and money you devote to your community, how many hours you sleep and how many hours you work. Some questions might startle an American: How often do you quarrel with your family? How long do you stay away from them? Do you trust your neighbors?

Bhutan’s guiding philosophy has inspired others, like the United Arab Emirates. In 2016, the country created a new cabinet position with a lofty title: minister of state for happiness and well-being. A woman named Ohood bint Khalfan Roumi got the job.

“This is serious business for the government,” she told the Los Angeles Times. “What is the purpose of government if it does not work toward the happiness of the people? It’s the duty and role of the government to create the right conditions for people to choose to be happy.” She said those conditions include everything from good infrastructure to making sure people feel safe.

“Some people may laugh at [the idea of nurturing] happiness, thinking it is silly and fluffy,” Roumi added. “I assure you, it’s a science. It touches on medicine, health, social sciences.”

One of her initiatives was a “happiness patrol” in Abu Dhabi, which involved police officers rewarding citizens for good behavior instead of just punishing them for infractions. Motorists who obeyed the rules of the road, for example, were given gift vouchers.

The well-being approach is also gaining momentum in Latin America. In 2013, Ecuador appointed a state secretary of buen vivir, an understanding of the good life — rooted in indigenous spirituality — that entails living in harmony with the natural environment. And Venezuela created a vice ministry of “Supreme Social Happiness” (though given the political and economic crisis currently unfolding under President Nicolas Maduro, it’s hard to imagine much social happiness flourishing there in the short term).

New Zealand has gone one step further than all these countries by deciding to make well-being the organizing principle of its national budget. The results of this grand social experiment will be watched closely over the coming years not only by New Zealanders, but also by governments worldwide. How the experiment turns out will likely influence their willingness to try it, too.

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Last Updated on Sunday, 09 June 2019 13:49


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+5 # indian weaving 2019-06-10 05:59
Finally some other earthly company is joining company with Bhutan and its GNH (Gross National Happiness) to measure its value in the world. GNP is now obsolete, a despicable yardstick, as too much of everything is killing all life on earth.
+7 # librarian1984 2019-06-10 06:44
This is the key to economist Adam Smith's 'invisible hand', the idea that the wealthy will police themselves, that they will know, and do, 'the right thing'. That was when ethics were a thing and a sense of noblesse oblige was de riguer, and even then it didn't work. Smith was naive, and hundreds of years later economic guru Alan Greenspan would admit, on the precipice of our Wall Street-fueled financial collapse, he had not taken human greed into account. Duh.

When my dad worked for a company he thought he'd work there the rest of his life. On his salary alone we earned enough for our housing, food, education, a car and, once in a while, a riotous family vacation. We couldn't afford to be frivolous, but we led decent lives.

There was a time when companies had Christmas parties and annual picnics. They sponsored Little League teams. Management knew workers' families. At least that's the mythical '50s of conservative nostalgia. There was also institutionaliz ed racism and sexism, greed and abuse. That's why we need regulation.

And we need each other -- because every day we have the chance to make things better.

Both parties are corrupt and capitalism has brought us to the brink of planetary annihilation. The media lies to us. The powerful are insane and wicked.

But every single day we have a chance to improve this world. We are many while they are few. And we have the internet.

When will we wake up, open our eyes, and begin?
0 # economagic 2019-06-10 16:07
A small but important quibble: Adam Smith absolutely believed that the rising bourgeoisie, and especially the factory owners whose vast incomes made up the vast majority of ALL non-farm income, would do anything they legally could and some that they couldn't to increase their take. It was the idea of "laissez-faire" (leave it alone) that he stole from the French, that competition would always keep such greed in check, that led to his mention of the "invisible hand"--of the market, but thinking of the Diving Hand of Providence. Smith was a professor of moral philosophy, so should have known better.

That idea was simply that he (having drunk the French Kool Aid and his own) believed that the common good could ONLY be enhanced by encouraging every individual to pursue her/his own self-interest, AND NOTHING ELSE! But that famous line was not the core of his idea, but a throw-away, used only once in 900 pages.
+3 # DongiC 2019-06-10 07:02
What a magnificent idea and from a country with a truly gifted leader, New Zealand and Jacinda Ahearn. This is what greatness is all about not wearing a baseball like hat with certain letters inscribed on it. Good luck to New Zealand. I am sure God will smile on you.
+1 # Robbee 2019-06-10 08:49
Forget GDP - New Zealand Is Prioritizing Gross National Well-Being
By Sigal Samuel, Vox
09 June 19

every constitutional form of government is a statement of how government protects people who live there

in america our constitution says how it is set up, to protect its people

the preamble to our constitution is our "mission statement" it says we are set up to protect "general welfare" - in other words, the well-being of all people who live here - this is why we won independence from britain - so our government would protect us - this is our government's solemn contract with us - our citizenry "deal"

new zealand has a constitutional form of government - so do most governments

jefferson noted that in 1783 or so, when we adopted our constitution, our corporations presented the severest test for our new constitutional government

it would be SHOCKING if any constitutional form of government is CAPITALIST, FOR THE BENEFIT OF CORPORATIONS, NOT PEOPLE!

in america our scotus declares that CORPORATIONS ARE PEOPLE!

it would be SHOCKING if any other constitutional government declares that CORPORATIONS ARE PEOPLE!

scotus let us down!

we need to overthrow the tyranny of scotus!

by amendment to our constitution we need to declare -

1) corporations are not people
2) money is not speech
3) politicized repuke scotus anti-constituti onal "justices" must be replaced by pro-constitutio nal justices
+4 # Wally Jasper 2019-06-10 09:20
Finally some pockets of sanity, like small beams of light, are starting to break through the massive blanket of dense clouds that is the global insanity pervading the world in our time. Yes, friends, there is a bright shining blue sky right here and now, temporarily obscured by the mental confusion and ignorance created on earth by human greed and arrogance. The naysayers think their money is more important than the happiness of living beings. it's up to all of us to prove, via all our actions and choices, that a world of basic goodness is indeed the natural condition here on earth.
+2 # tedrey 2019-06-10 09:21
I think it's common sense to recognize other measures of well being than monetary gain, and I wish these ventures well. But I expect severe lashback from those who desire and worship no other kind of fulfillment, and that only for themselves.
+2 # Kootenay Coyote 2019-06-10 09:37
About time, too. The world has been stuck too long in early 19C Europeans Capitalist social measuring tools when it comes to unexamined political & economic ideology.
+1 # economagic 2019-06-10 15:56
The world is indeed stuck in the 19th century, especially w/r/t "unexamined political & economic ideology" (which is virtually all of it). Interestingly enough, GDP is the most recent among what are supposedly the fundamental economic variables, first published in 1946 or 1947. Its creator Simon Kuznets stated explicitly that it was a measure of economic ACTIVITY, NOT of economic, societal, or human well-being, and he reiterated his intentions toward the end of his life (1985).
+2 # hwmcadoo 2019-06-10 10:05
She has my vote.
0 # Robbee 2019-06-10 13:17
ps - this grand social experiment" is the exact same "grand social experiment" that every, single, constitutional form of government aspires to! - nothing more! - nothing less!

russia and america are prime examples of failed states!

norway and cuba are prime examples of successful states!

governments in japan and europe tend to more or less approach norway's democratic socialist model!

most governments are corrupted to subvert their natural resources. and people, to exploitation by america, china, russia and other behemoths of corporate capitalism!
+3 # 2019-06-10 16:00
I believe that all the drug overdoses that are occurring in this country and creating great angst amongst the "decision makers, is the result of the lack of "wellbeing" in our society. It won't be addressed by more, and more draconian drug laws, but only by addressing "wellbeing"; greater opportunity, better pay, more leisure time to pursue personal interests...