Is Happiness a Commons?


November 10, 2004


Browse in Diseconomy Economic Indicators

Gunnar Myrdal, the late Swedish economist, once noted the strange tendency of his profession to barricade itself against human reality. In true sciences, such as biochemistry and physics, hypotheses are tested and disproven all the time. In the pseudo-science of economics, by contrast, “all doctrines persist.”

None persists more stubbornly than the belief that an increase in monetary transactions — that is, “growth” — means a corresponding increase in human well-being. This belief is enshrined in the conventional measure of progress, the Gross Domestic Product, or GDP. The more money we spend the better we are doing, the cult of GDP proclaims, regardless what we spend that money on and the effects. People have been pointing out the absurdity of this belief for decades.

Simon Kuznets, the economist who developed the GDP, was dismayed at the use to which his statistical construct had been put. He thought he was devising an economic planning tool not a measure of well being. But all doctrines persist.

There is evidence, however, that this particular one finally is starting to crumble. Witness the article in the Wall Street Journal a few weeks ago, on the tiny nation of Bhutan. Bhutan has chucked the GDP, and instead developed its own measure called “gross national happiness.” “In Bhutan, Happiness is King,” the headline said. “Society Values Well-Being Over GDP — and Economists Take Note.”

Well, a few do at least. More typical is Fred McMahon of the Fraser Institute in Vancouver, British Columbia. “Every good thing is correlated with prosperity — with rising GDP,” McMahon told the Journal. That’s the heart of this peculiar darkness, the belief that monetary exchange equals “prosperity” and therefore well-being. But consider: are the billions of dollars we Americans spend each year on car crashes, treatments for the cancers we contract from environmental toxins, junk foods our kids nag us to buy, and on and on, really prosperity?

Sounds more like pathology to me. But then what do I know? I’m not an economist. (For what it’s worth, the Journal assembled a number of “happiness” and “life satisfaction” rankings that researchers have assembled. The U.S. ranked 15th, beneath Mexico, Ireland, Iceland and the Netherlands, among others.)

It’s not surprising that this breakthrough should come in a little out-of-the-way nation. Advance generally happens when the big shots aren’t looking; Apple computers were born in a garage, not in some fancy corner office suite. Here’s the truly interesting part. According to the Journal, Bhutan’s concept of happiness “embraces everything from protecting natural resources to promoting a strong natural culture to ensuring democratic governance.”

Think about that list. It’s basically the commons — nature, society, culture, democracy. It involves the things that belong to all of us together, rather than to each of us apart. If well-being will depend increasingly on that, and less on the products of the market, then a lot of economics textbooks are going to need rewriting. Now, that’s one GDP-increasing activity that really will mean advance.