Gross national happiness (part 1)

May 19th, 2015 | By FCT

New measures of prosperity, from the Harvard Business School to the UN to Bhutan to EU—goodbye GDP, hello human progress index

Three decades ago, the king of Bhutan, a tiny kingdom in the Himalayas best known to trekkers and seekers of Buddhist bliss, asked his counsellors why happiness—which is what we say we all want in this mortal life—wasn’t part of the measures that the World Bank or the UN uses to rate the relative prosperity of a given country.

Gross Domestic Product was the metric in use since 1991, when the US Bureau of Economic Analysis replaced Gross National Product with GDP. Problem is, neither GDP nor GNP before it expressed any values about human outcomes of all this economic activity. As the king reckoned, that’s a bit like an automotive review saying “the car is 27 feet long and goes 112 km/h” without describing how it actually feels to drive.

What came out of those conversations was the good king’s notion of ‘gross national happiness,’ a new kind of index that includes such domains as psychological well-being, health, good governance, community vitality, and living standards. It’s a single number index, with a twist: it’s not just about categories that lead to happiness, but the intensity of the happiness or lack of happiness. The GNH index is researched annually in Bhutan; more here for you dataheads out there on GNH methodology—it’s cool and worth a read.

Well, GNH was a far better ‘take’ on what matters to a society than GDP because human progress is really the essence of social happiness—and a concept that the brains at McGill, Harvard and the University of Toronto’s Martin Prosperity Institute trust.

Are the numbers crunchers giving way to the sociologists and anthropologists? A little: there’s more to life than one’s paycheque or postal code—we’re certainly more than the sum of our data points.

But the really provocative thing about all this new indexing—especially in Canada, where we have an economy heavily overweighed towards in-investment and export, is that there’s an emerging sense that (a) not all economic wins are social wins (e.g. coal is cheap energy but air pollution counterweights the cheap argument) and (b) democracy and capitalism are joined at the hip—how that marriage works out regarding actual human outcomes is the measure of whether or not we’re actually making progress—emphasis on ‘we.’

Human-friendly cities like Copenhagen have been doing this for years, successfully, designing public spaces around simple principles of livability, ‘slow streets’ and an emphasis on outcomes that live on because people actually engage in ways that sustain the spaces. The Economist Intelligence Unit’s prestigious Livability Index has had Vancouver, Toronto and Calgary in its international top ten cities since 2001—not bad at all.

The big impact? Public policy. From zoning priorities to highway design to university funding to bike paths and free Wi-Fi, this today equals happiness (spelled in index-speak environment, sustainability and quality of life). And that spells market value for homebuyers.

Next up: how intangible measures of prosperity inform real estate markets…and who’s measuring them best.

Leave a Reply

Your email address will not be published. Required fields are marked *