Looking for Happiness in GDP

Leaders ranging from the King of Bhutan to the President of France have been pushing for a change which many are resisting. Find out why GDP might be on its way out as an indicator of prosperity.

Sanri Urfa Old Market (Photo: Suhee Kang | sociecity)
Sanri Urfa Old Market (Photo: Suhee Kang | sociecity)

The world’s industrialized nations have long looked to Gross Domestic Product (GDP) as an indicator of a country’s prosperity and well-being even though, well, it’s not an indicator of anything but money. And although money can buy you anything — except love of course — it is simply not a direct measurement of well being.

GDP and Life Satisfaction (Gallup Poll)
GDP and Life Satisfaction (Gallup Poll)

This general concept of ‘prosperity’ existed a few thousand years before GDP came into use, yet the latter is still used to define the former on a regular basis.

In a perversion kind of like brushing your teeth with a hairbrush, GDP has been subject to years of misuse, eventually bringing us to a point where it’s simply acceptable practice to use it as a quality of life indicator. The trend continues in spite of the fact that many countries with a low per-capita GDP have equal or higher ‘quality of life’ than those countries with a very high per-capita GDP.

But what then, pundits argue, would be a more fit measurement for determining national well-being if not GDP? Should we resort to measuring raw happiness?

**insert hearty laughs**

Happiness as a Metric

The country of Bhutan, a small kingdom in between China and India, isn’t laughing. In fact, they find the measure of happiness rather useful. So useful in fact, that they use a Gross National Happiness (GNH) index as their primary determinant for quality of life, not GDP.

And why not?

Despite the seemingly interpretive nature of GNH, a measurement of happiness has the potential to provide far more direct and meaningful indications of quality of life than any financial measurement.

There is a general belief that consistency is a problem in measuring happiness, but when GNH is compared against GDP in this way, several merits of consistency in favor of GNH actually begin to show themselves, including that:

  • The value of happiness does not fluctuate widely between countries
  • The value of happiness can not be traded nor can it be valued and devalued on a stock market
  • The value of happiness is not controlled and handed out by a central Bank of Happiness
  • The value of happiness does not lose value over time due to inflation

Monetary wealth is of course, subject to all of the above limitations.

Who’s Laughing Now?

If our interest is truly aimed at measuring important national development metrics, then GNH should not only be a contender, but a primary factor in our study, measurement, and understanding of our development. This is especially true when it comes to quality of life, where one could argue that GNH should be the only metric.

Yet to date, only a few world leaders — namely Bhutan King Jigme Singye Wangchuck and French President Nicholas Sarkozy — are on board with the idea of elevating the importance of GNH. Of the two, Sarkozy has been ridiculed, while the Bhutan King has an entire Gross National Happiness Commission at his disposal.

Perhaps the Kingdom of Bhutan is laughing after all…

More Reading on GDP and GNH:

Bhutan Gross National Happiness Commission
Moving Beyond GDP
Sarkozy Wants ‘Well Being’ to Replace GDP 
GDP: One of the Great Inventions of the 20th Century
Money and Happiness (Gallup Poll PDF)

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