"It measures everything except that which makes life worthwhile": 50th anniversary of Bobby Kennedy on GDP

Many excellent pieces today pick up on the fiftieth anniversary of Bobby Kennedy's University of Kansas speech, where he makes one of the earliest critiques of GDP (Gross Domestic Product, or Gross National Product as it was known in 1968) as the measurement of what's valuable in society.

Kennedy's far-sightedness about our modern malaise - our crisis of wellbeing in consumerist, climate-challenged societies - is extraordinary:

Even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction - purpose and dignity - that afflicts us all.  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 - [also] counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. 

It counts special locks for our doors and the jails for the people who break them.  It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.  It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities.  It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. 

Yet 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.  And it can tell us everything about America except why we are proud that we are Americans.

Has there been progress since this speech - meaning have we found better ways to measure "that which makes life worthwhile" than GDP/GNP? It's good to report that there are - and many of their best advocates have been blogging and writing in the last few days. 

We should remember that the inventor of GDP, Simon Kuznets, warned everyone about his own measure. As a blog from Tony Dennis of Chartered Institution of Building Services Engineers quotes him: "The welfare of a nation can scarcely be inferred from a measurement of national income". Dennis goes on to ask: 

GDP largely accounts for market transactions, but does not consider the social cost of decision-making or its impact on the environment and income inequality. Consider that the devastation wrought from a hurricane, arguably induced through climate change, would boost GDP.

What are the viable alternatives? A Bloomberg article measures countries against four:

  • The World Happiness Report, directed by Jeffrey Sachs. It measures GDP ("the monetary value of goods and services produced by a country") but also "healthy life expectancy, freedom, generosity, social support and perceptions of corruption". 
  • The Legatum Prosperity Index lists its measurements as "Economic Quality, Business Environment, Governance, Personal Freedom, Social Capital, Safety and Security, Education, Health, and the Natural Environment"
  • Human Development Index - coming from the United Nations. "A country scores higher HDI when the lifespan is higher, the education level is higher, and the GDP per capita is higher", says Wikipedia. 
  • The World Economic Forum's Inclusive Development Index, measuring 11 dimensions of economic progress in addition to GDP, and centred on three pillars: "growth and development; inclusion; and intergenerational equity – the sustainable stewardship of natural and financial resources."

The Bloomberg piece - even though it is sceptical of these indicators - producers a very handy chart, ranking developed world countries according to an average of their scores:

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No surprises in this list, with small European/Nordic nations comprising the top four.

But an interesting piece from the inequality economist Kate Pickett notes that some moves towards what's been called a "wellbeing economy" are being made by nations (and even regions) that are not on the "best of the best" lists:

Take Costa Rica. Most of the time, they run completely on renewable energy. In 2017, their energy production was 100% renewable for more than 300 days. And while the rest of the world is desperately trying to halt deforestation, Costa Rica is actively re-foresting, doubling its forest coverage between 1983 and 2016.  Coupled with low poverty and inequality compared to other countries in the region, they are punching above their weight on  the Social Progress Index. No other country is better at marrying individual wellbeing, life expectancy and equality with a low ecological footprint. That’s true leadership.

Closer to home, consider Scotland. In 2016, the Scottish Government published a Circular Economy Strategy which sets out a vision for an environmentally sustainable, low-waste Scotland, with several new regulations soon following. It has cross-party support for the Living Wage and has recently created a commission to tackle inequality and poverty.

And turning to Slovenia, we find a country where inequality and the gender pay gap are among the lowest in the OECD. Last year, after extensive public dialogue, they published their Vision 2050. Its core themes are learning for life, innovative society, trust, quality of life and an identity that is inclusive and outward-looking.

Pickett hints in the piece that these three nations, and others, are about to launch in the autumn a new global network of governments, "somewhat akin to the G7 or the G20, that commit to creating wellbeing economies". Or as Oxfam's Katherine Trebeck writes, "a commitment to people and planet". Watch this space (and see some of them below in this tweet).