Deep thought - Dec 9

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Redefining Prosperity
Jules Peck, The Diplomat
In Bhutan they’ve scrapped GDP in favour of Gross Domestic Happiness. Is it also time for the West to re-consider its attitude towards growth? Jules Peck weighs up the arguments.

In conventional wisdom, economic growth and higher incomes mean richer lives and improved quality of life. But, as the Happy Planet Index ( www.happyplanetindex.org ) shows, true prosperity goes beyond material pleasures. Surely it resides in the health and happiness of our families, in the strength of our relationships and our trust in the community? Yet in our search for prosperity, we seem to have lost our way.

Growth has delivered its benefits, at best, unequally. Twenty per cent of the world’s population earns just two per cent of global income. Far from improving the lives of those who most needed it, growth has let much of the world’s population down.

And as the economy expands, so do its ecological impacts. We live now as if we have one and a half planets and peaking in key resources – such as oil – may be less than a decade away. Swedish diplomat and former UN weapons inspector Hans Blix notably warned that climate change was a greater issue than global terrorism, and leading figures in the military have been outspoken about the risk to global security in not taking serious and rapid action to deal with threats such as climate change.

So, as the rich world uses far more than its fair share of the planet, surely we in the wealthy world must radically cut back our planetary consumption if developing countries are to have any hope of their own prosperity?

...What is urgently needed is a new political philosophy and vision. None of this will happen without the political will to make space for audacious change, but, for those brave enough, there is voter support for government action on these issues.

Prime Minister David Cameron has in the past been outspoken about the need to dethrone growth and he commissioned the Quality of Life Review which I directed and which gave recommendations on a new well-being economics. But more recently we have heard little about this from him and his Big Society vision is as yet untested.

The UK government’s Sustainable Development Commission has been working on ideas for a Growth In Transition Commission which would carry on the great work done for President Nicholas Sarkozy by the Stiglitz Commission.

Luckily, work by think tank nef is already under way in the UK to model what an economy no longer reliant on growth would look like. In Canada work has shown such an economy could bring high employment, greater equity, a stable economy and combat climate change.

Other leaders are engaging with this debate. German politician Horst Köhler has been clear that growth does not bring happiness. President of the European Commission, José Manuel Barroso, has said: ‘GDP is unfit to reflect many of today’s challenges such as climate change… We cannot face the challenges of the future with the tools of the past’. Meanwhile EU Environment Commissioner Stavros Dimas has stated: ‘There is political consensus on the need to go beyond GDP’. The OECD and European Commission are currently seeking ways of measuring progress and well-being more broadly than by taking GDP as the sole measure which Angel Gurria, OECD Secretary General, has said ‘will constitute a major contribution to stability and democracy’. As well as at EC and OECD level, countries like Austria, Finland and New Zealand are examining these issues. Bhutan uses an alternative to GDP in their Gross Domestic Happiness measure. And many US states are now developing their own indicators of progress beyond GDP.

(1 December 2010)

From the man who brought us an Open letter to the Queen in answer to Her Majesty's query as to why the economic crash of 2007-2008 was not foreseen.