About Gross National Happiness and Gross National Product - 1

By Matthieu Ricard on March 06, 2012

In July 2011, the UN General Assembly resolution about ‟Happiness: towards a holistic approach to development,” introduced by the Kingdom of Bhutan was adopted unanimously and warmly applauded by the 193-member states. On the forthcoming 2nd of April a debate, to which I shall participate, will be held at the UN headquarters in NY, under the auspices of the Prime Minister of Bhutan, H.E. Jigmi Thinley, to discuss how to implement this resolution.

Ahead of the meeting the Prime Minister of Bhutan has released an inspiring statement about the way Bhutan is conceiving its national capital and accounting for it. Here are a few excerpts from this statement pointing out to the fact that Gross National Happiness (GNH) matters more that Gross National Product (GDP).

‟At a time of devastating environmental and cultural destruction globally and the growing bankruptcy and collapse of our global economic order, the world desperately needs an alternative to the materialist, consumerist obsession that has wreaked such havoc. If we can demonstrate the practical viability of a working set of GNH (not GDP) accounts that chart a sane and balanced path forward, that will be one of the greatest contributions our little country can make to the wider world.

Let's consider our current reality — the way the whole world now keeps its national accounts is enshrined in the official global System of National Accounts that is accepted by the United Nations, the World Bank, the International Monetary Fund, and by every government in the world. It's the reason GDP is comparable globally from London to Addis Ababa to Beijing to Buenos Aires.

It is hard to rock that boat…!!! But rock it we must, because that universally accepted system is based on untenable premises that have led governments to adopt some of the most bewildered, confusing, and destructive policies imaginable. And challenge it we must if we are serious about charting a sane and balanced GNH path forward, both for ourselves and for the world.

The conventional and almost universally held belief, globally, is that the more the economy grows, as measured by GDP growth, the better off and more prosperous we are. But consider this:  Because the GDP only counts monetary market transactions, it mistakenly and misleadingly counts the depletion and degradation of our natural wealth as if it were economic gain.

If we were to cut down all our forests in Bhutan, GDP would mushroom, because GDP only counts the timber value of our forests once they are cut and sold at market. GDP takes no account at all of the resources we leave behind, and so it entirely ignores the value of our standing forests.

Yet, as we well know, and as our own Constitution wisely recognizes by vowing to keep most of our country under forest cover, our standing forests have immense value — protecting wildlife, biodiversity, watersheds, soils, and sacred places, sequestering carbon from the atmosphere, ameliorating the danger of landslides, and much more. Because those values are invisible in GDP, it's no wonder the world has accumulated a massive ecological debt that appears in no country's national accounts.

Keeping accounts this way, as the world presently does, is like a factory owner selling off all his machinery and seeds and counting it as profit, even though he'll have nothing to produce next year. And yet that's the way the world, and even we here in Bhutan, keep our national accounts! How absurd and foolish..….!

There are so many examples of this absurdity…. The more fossil fuels we burn and the more greenhouse gases we therefore emit, the more GDP will grow, and therefore — according to conventional economic dogma — the ‘better off' we are! The true costs of climate change remain invisible. For that matter, as we learned the hard way watching the devastating oil spill in the Gulf of Mexico, the true costs of oil have never been reflected at the petrol pump, primarily because our present GDP-based accounting systems ignore ecological benefits and costs. Indeed, it is sadly ironic that natural or human-induced disasters actually make GDP grow, simply because money is spent on repair and clean up costs.
(to be continued)