Hilary Long: GDP is no match for happiness

CommonSpace columnist Hilary Long looks at New Zealand’s move away from economic growth to a “wellbeing budget”, and how Scotland could tackle its deep-seated social and economic problems and become a happier society by doing the same

I LISTENED with interest to Jacinda Ardern, New Zealand’s Prime Minister, speaking about her national budget and how spending will be dictated by what best encourages “the wellbeing of citizens” rather than based on productivity and economic growth. 

She describes economic growth as an unnecessary evil and suggests that countries should ditch it as a political priority. We hear so much about GDP from politicians and for most people including me it is pretty meaningless. In capitalist society, growth is more important than anything else. It is prioritised over our health, happiness and even climate change. 

In New Zealand it is recognised that wealth doesn’t equal health or happiness. So in announcing her budget, Ardern has committed her government to a cultural change away from the accumulation of personal wealth and towards spending money ($200 million) to bolster services for victims of domestic violence, sexual assault and homelessness and mental health. Impact assessments will require to be done to demonstrate that spending advances one of the five government priorities – child poverty, mental health, inequalities, thriving in a digital age and low-emission sustainable growth. Jacinda Ardern also recognises the importance for the citizens of New Zealand of community and cultural connection and intergenerational health and wellbeing. GDP and welfare/wellbeing are being expressed as two different concepts. She also talks about kindness, empathy and togetherness.

The World Economic Forum has recently reported on the league table for the happiest nations. Finland tops the league again. Four Nordic countries are in the top five happiest nations (Finland, Denmark, Norway, Iceland followed by the Netherlands). Unsurprisingly, the UK came 15th.

READ MORE: Beyond GDP: New Zealand Finance Minister explains shift to budget based on wellbeing indicators

The Gallup survey undertook a three year rolling average of six factors – GDP, social support, life expectancy, freedom to make life choices, generosity and levels of corruption. The survey found that governments that are more representative have happier populations and governments that concerned themselves with citizen’s happiness had the best public services. Levels of participation were higher in happier nations and the Finns pride themselves on their generosity in relation to charity donations and volunteering. Finland tops the happiness list but does not have the highest GDP. It’s the country’s social safety net, personal freedom and work life balance that gives it the edge. Finns feel good about their environment, sense of community, public services and of course their education system. The USA had the highest GDP but comes in 19th due to worsening health and social trust, and trust in government as well as growing addictions to gambling, social media use, video gaming, shopping and consuming unhealthy food.

According to the Institute for Public Policy Research (IPPR,  austerity in the UK has been responsible for 130,000 deaths since 2012. It characterises these deaths as “preventable” such as heart disease, lung cancer or liver problems, which can be caused by unhealthy lifestyles and habits that often form at an early age.

The lead researcher, Dean Hochlaf, said: “We have seen progress in reducing preventable disease flatline since 2012. At the same time, local authorities have seen significant cuts to their public health budgets, which have severely impacted the capacity of preventative services.”

READ MORE: Robin McAlpine: Joy as an act of resistance

He cites two areas in particular – cuts to Health Visitor Services and reductions in physical activity in schools. Cuts to welfare, NHS and Education have all impacted, leaving the UK half way up the table of OECD countries on its record for tackling preventable diseases. Social conditions encourage harmful behaviours and governments place the responsibility exclusively on the individual rather than on government to create a healthy environment. 

I like Ardern’s approach to happiness economics that challenges the more conventional economic goals such as economic growth, employment and income levels. Taking into account more in-depth factors affecting the quality of life helps to make economics more relevant to real life.

In a wealthy country like Scotland, once we have separated ourselves from the disastrous social and economic policies of Westminster we will be able to focus on factors that affect happiness, and indeed we need that debate before becoming an independent nation. Income is important although beyond a certain point it has diminishing returns.

For ordinary people like me, life satisfaction is related to quality of work, quality of consumption, leisure, welfare of family members and fellow citizens, the environment, social interaction, confidence and self-respect. When I first became politically active in the 1970’s we talked about the “Social Wage”. The obsession with personal wealth has undoubtedly diminished life satisfaction for the majority of people. I’ve no evidence but I am confident that an independent Scotland will be a happier country to live in. 

Picture by Ulysse Bellier

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