About Gross National Happiness and Gross National Product — 2 (continued)

By Matthieu Ricard on March 10, 2012

Excerpts from a statement from the Prime Minister of Bhutan, H.E. Jigmi Y. Thinley, in preparation to the 2nd of April debate on GNH at the United Nations.

In fact, many things that make GDP grow, and that are therefore conventionally (and misleadingly) counted as positive signs of an expanding economy, actually signify a decline in wellbeing. The more crime, pollution, war, and sickness we have, for example, the more GDP will grow, simply because money is being spent on prisons, police, weapons, drugs, cigarettes, and pollution clean-up costs to deal with the consequences of these ills. So long as you spend money, GDP will grow, regardless of whether that spending signifies an improvement or a decline in wellbeing. So simple GDP growth can't actually tell us if we are better off or not.

And if GDP counts as gain many questionable things that actually signify a decline in wellbeing, it entirely ignores a whole range of productive economic activity that genuinely does contribute to wellbeing — ignoring it simply because no money is exchanged. And so, volunteer work, community service, and the vital unpaid work done in households count for nothing in GDP, and the precious free time that we need to meditate, garden, and socialize with family and friends is completely value-less in GDP.

And since equitable development is one of our core GNH principles, it is noteworthy that GDP only measures the total amount of income a country produces and takes no account of how that income is shared. So the rich could be getting richer while the poor are getting poorer, and GDP can still continue to grow, with the growing inequities invisible in our standard accounts.

I could go on listing many more fundamental flaws in our present reliance on GDP accounting methods which, sadly, send highly misleading signals to policy makers who continue to undermine timely action on climate change, disease prevention, and other crucial preventive actions. But just these few examples I've noted suffice to explain what the primary architect of GNP / GDP accounting, Nobel Prize winner Simon Kuznets, knew 60 years ago when he warned that GNP /GDP should never be used to assess a nation's wellbeing, prosperity, and progress. To do that, Kuznets recognized that you always have to ask, not just how much is growing, but what is growing. But the world has long ignored Kuznets' sage warning and still uses GDP as its primary measure of wellbeing, prosperity, and progress.
(to be continued)