from YES! Magazine:
Beyond GDP: UK to Measure Well-Being
The UK is trying out a new way to see if government policies are improving people’s lives: ask.by Laura Stoll
posted Jan 27, 2011
In November, UK Prime Minister David Cameron announced that, to help guide national policy, the British government would begin to measure the subjective well-being of its citizens. The announcement was the latest evidence of a growing awareness among governments and economists that Gross Domestic Product (GDP) and other traditional metrics of economic progress fail to measure the kind of progress that makes life better.
The British government’s decision to measure subjective well-being (rather than, say, objective measures of mental and physical health) underscored the growing debate about what measurements should replace the outdated focus on economic growth.
The Problem with GDPCameron explained that the change was about “measuring our progress as a country not just by how our economy is growing, but by how our lives are improving . . . not just by our standard of living, but by our quality of life.” Indeed, GDP was never intended to be used as an indicator of social progress. Simon Kuznets, the economist who helped the U.S Department of Commerce standardize the measure of gross national product , acknowledged that “a nation’s welfare can scarcely be inferred from a measurement of national income.” GDP can go up even in times of suffering: when a country is hit by an earthquake, GDP may increase because of the extra spending on reconstruction. High levels of illness bump drug sales and hospital bills, leading to an increase in a country’s economic activity. But for the last 60 years, GDP has been the main tool in the measurement of people’s well-being.
The British government’s decision is part of a growing acknowledgment that objective (and mainly economic) data can’t give us the whole picture—and may, in fact, predispose us to promote economic growth at the cost of well-being. This UK announcement follows in the footsteps of a report commissioned last year by the French President, Nicolas Sarkozy, and written by Nobel economists Joseph Stiglitz and Amartya Sen, about alternative measures of progress. And around the globe, governments are changing the way they measure how well their country is doing. In Bhutan the government uses “Gross National Happiness” as the main indicator of the country’s development, and in Ecuador and Bolivia the indigenous concept of “buen vivir” (living well) has been incorporated into state constitutions. In the United States, Maryland is experimenting with a “Genuine Progress Indicator.” .........(more)
The complete piece is at:
http://www.yesmagazine.org/happiness/beyond-gdp-uk-to-measure-well-being