The pandemic urges us to rethink GDP as a benchmark
Here are some simple observations, but they have not been made as clear as they should be in these complex and turbulent times of a pandemic.
First, we know that GDP (Gross Domestic Product) has collapsed around the world, but we the same cannot be said for GNH (Gross National Happiness). A lot of economic frenzy that drives GDP has gone away, forced shut by the SARS-CoV-2 virus. This means the way we live has changed in ways that we need to examine carefully. On the one hand, there is the possibility of a different kind of — and sometimes deeper — human-to-human interaction that is at the heart of GNH. On the other hand, we are also seeing the negative withdrawal symptoms from the ways we lived (and continue to hope to live) under a GDP paradigm.
Second, we know that GDP has collapsed because we are tuned into this meter and are constantly reading it and measuring it. We don’t know it, but there is a lot of activitiy behind measuring activity. In contrast, GNH isn’t watched much or measured much, so an average citizen may not know what happened to this number and, if it was impacted, how precisely it moved.
Third, lives have been lost to COVID-19, and several disrupted, but we also can equally see that humanity has stood up well when change came a-calling. When flights stopped, hotels closed, and malls stayed shut, we managed without them. We haven’t died because we didn’t travel or didn’t shop. Of course, many have died because they shopped and got Covid, and many went under even earlier because of the debt that this shopping brought into their credit card statements.
Many things that GDP indicates as economic growth, or as a sign of positive expansion of the economy, actually signify a decline in happiness and well-being while actaully being dressed up to look like healthy activity.
In other words, for the first time ever, the pandemic has given the world and each and everyone in it the opportunity to experience life just the way it would be if we had not pushed the GDP meter the way we have. Because this is woven so intricately into the fabric of our existence, the lost jobs, reduced incomes, and declining sales give us losses. We want to get back to “normal”. But it also opens our eyes to a world that can be designed very differently from the GDP model of work. This is precisely what the message of GNH has been all along, promoted notably by Bhutan and embraced by many right-thinking people across the globe.
It bears repeating that GNH is a new development paradigm that overrides GDP or GNP in many ways but it is not against economic growth. However, it is against the measures that still qualify as economic growth despite the destruction they cause to our society and our ecology, often dismissed by economists as “externalities”. Many things that GDP indicates as economic growth, or as a sign of positive expansion of the economy, actually signify a decline in happiness and wellbeing while actaully being dressed up to look like healthy activity.
Take the example of accidents — they add to the GDP number. With every accident, a host of sectors kick in — insurance, hospitals, automobiles, insurance, spare parts, repairs — and our GDP grows. An accident-avoidance behaviour is, in such terms, bad for GDP. It doesn’t yield economic activity. Similarly, a growing addiction to alcohol and smoking helps the economy grow because there is commerce taking place. Money changes hands. More so, when such addicts become sick, they need to consult doctors, pay for treatment, and buy medication. So, more money changes hands, delivering higher economic growth, contributing to GDP measures.
Similarly, the higher the transport bill, the higher the economic growth because it burns fossil fuel, feeds into a full and powerful oil industry, pays into the people serving the system, and generates activity for repair and maintenance costs. In the same way, if there is more conflict, there is more GDP. Riots mean the destruction of property, which must be rebuilt, more police, more weapons, more insurance activity, and more GDP.
GDP does not measure love or relationships, which are proven to be so crucial for human existence. It does not consider a working spouse at home. It is because there is no movement of money. GDP does not consider the time spent in learning, free service, help and support through volunteerism, and care for children and the elderly.
It is a vicious circle. We live in a highly paradoxical world because a lot of ways in which it is not worthwhile to live is taken into consideration by the GDP, but all that makes life worth living is ignored. It was John F Kennedy who put it rather well, once. Speaking at the University of Kansas on March 18, 1968, Kennedy told students: “Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product — if we judge the United States of America by that — that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.”
And he added all that GNP has missed out: “…the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”
It is true that GDP does not measure love or relationships, which are proven to be so crucial for human existence. It does not consider a working spouse at home. If we had to translate all her/his work in money-terms, what we earn may not be enough. It is because there is no movement of money. GDP does not consider the time spent in learning, free service, help and support through volunteerism, and care for children and the elderly.
Happiness arises from a flourishing community, and is the highest human quality as it reflects peace of mind. Take away the adverse effects of GDP on society and nature, add the pro-social acts, and we get to the GNH.
Furthermore, GDP does not consider the value of lush nature. Standing trees have no value for the economy. When the trees are felled and turned into timber, furniture, and so on, it is then that they become valuable from a GDP perspective. Also, after the destruction of nature, the land is used for meat and dairy industries. All the acts of destruction of nature and feeding on meat and dairy products are injurious to human health and happiness. Human genesis would change without the natural environment. Many kinds of research indicate that the consumption of animal products does not make for a healthy diet for humans.
It can be fairly concluded that the crisis that humanity faces, the violence, anxiety and stress that is now a part of our daily existence, the complete denial of the value of the nature that nourishes us — the air we breathe, the water we drink and the soil that gives us our food — is a direct consequence of the GDP mindset.
In fact, the founder of GDP, Simon Smith Kuznets, had clearly said that it does not consider human well-being. He used the metric to see how the second-world countries (“second world” was in vogue during the Cold War to describe industrial socialist states that were under the influence of the Soviet Union) were doing and who was ahead. Over time, it became a measure for growth with some additional accounting. Now WB, IMF, and others use this GDP to propel the economic growth of the nations. We tend to forget the proviso that Kuznets gave us way back in 1962: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”
GNH considers GDP but limits it, binds it, and builds it to account for a worker frame. GNH breaks off from GDP when the eventual impacts to society and nature are negative. Happiness arises from a flourishing community, and is the highest human quality as it reflects peace of mind. Take away the adverse effects of GDP on society and nature, add the pro-social acts, and we get to the GNH.
Ecology should take over the economy. It must become the prime driver, subsuming society, which subsumes the economy. Animals must be left to their homes and not to industries. This way, the world can claim back 80% of its arable land, which is used for this purpose, and convert it back into forests.
Therefore, GNH looks at everything through a holistic approach by balancing the material, physical, emotional, and spiritual needs of an individual. It does not measure happiness, but conditions to happiness. It considers a balanced approach to see if all the following nine domains do equally play a role in the person. These nine domains are a) ecological connections, b) psychological wellbeing, c) cultural participation, d) community vitality, e) time use, f) education, g) health, h) living standards, and i) good governance.
These nine work under a broad approach that emphasises development through a collective lens, not individual-based, with an equitable and sustainable approach. It focusses on values connecting to humanity, equity, and kindness, as the present King of Bhutan put it. It was his father who first gave the idea of GNH to the world. And GNH considers the future — for all generations to come. What we enjoy must as well be available for all ages after us.
These are powerful and simple thoughts that have grown quietly since GNH was presented at the UNGA in 2011 by the then PM of Bhutan, with 68 countries in support. In the following year, two resolutions were passed by UNGA and March 20 was designated as the International Day of Happiness, and happiness was formally introduced as a holistic approach to development.
Thus, the global paradigm of the world, our little blue planet Earth, which is our home, must change. Ecology should take over the economy. It must become the prime driver, subsuming society, which subsumes the economy. Animals must be left to their homes and not to industries. This way, the world can claim back 80% of its arable land, which is used for this purpose, and convert it back into forests. The current food production is enough to feed 21 billion people, but we lack distribution.
The tyranny of a GDP approach is proving hard to escape. We need something like an “escape velocity” before we can break free. Will the pandemic provide that push?
It is said if we divide the existing arable land today to every person on the planet earth, it will be more than two hectares each. Two places in India — Kanpur, with its focus on eco-agriculture, and Navdanya in Dehradun — prove that with a non-chemicalised eco-friendly approach food becomes nourishing, soil comes back to life, water is retained, and an acre can produce enough to feed twenty people without any problem. The earth will become greener and sequester carbon dioxide. People will be healthy and happy with such practices.
As more and more nations debate how to introduce the idea of GNH in their systems, it is important to note that GNH is not against development. It propagates development with sustainable energy and materials. This is understood by most leaders and people on the planet. Yet, the tyranny of a GDP approach is proving hard to escape. We need something like an “escape velocity” (the velocity required to escape a strong addiction or bond built over a long time) before we can break free. Will the pandemic provide that push?
We don’t know yet. But one important way to look for change is to see if we care for numbers above all else, or if we place a premium on values. If it’s the former, we will continue to be weighed down by GDP. If we are focussed on the simple values of a sustainable future, GNH is the natural path, and it will flower and help humanity on a new path of progress.
This column was published on Oct. 30, 2020 in the online editions of The Hindu newspaper. Read: The pandemic urges us to rethink GDP as a benchmark