Well-being and growth

The late Senator Robert Kennedy, just shortly before his assassination in 1968, provided a most poignant summary of the shortcomings of the gross national product (GNP) as a measure of the well-being of the nation:

'' “The Gross National Product includes air pollution and advertising for cigarettes, and ambulance to clear our highways of carnage. It counts special locks for our doors, and jails for the people who break them. GNP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missiles and nuclear warheads... And if GNP includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, or the intelligence of our public debate or the integrity of our public officials... GNP 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.” ''

Various attempts have been made since its origins in the 1930s and 40s to find a more honest or inclusive descriptor of how well the economy is performing, to find a way of disallowing the impacts described above and making something more out of the relationships humans have with each other that are part of a sharing economy.



Examples of this include the ISEW (Index of Sustainable Economic Welfare) or the GPI (Genuine Progress Indicator). Much work recently has also gone into the relationship between ‘happiness’ and GNP. It seems that happiness levels (as described by the people interviewed) do not respond linearly to increases in income above a certain level (approx. $10,000, but adjusted for what this buys in different countries). Its rate of increase is generally very low and uneven. Below this threshold happiness does respond well. Equally, it is evidential that individuals in less equal societies are likely to describe themselves as less satisfied than those in more equal societies. Manifestations of social disorder and health issues are worse in less equal societies (2).

Although well being is very different to GNP, the question arises about how the circular economy bears on matters of both growth and well being. The circular economy is clearly an economic opportunity (see Towards the Circular Economy Ellen MacArthur Foundation 2012) and increasingly so as it evolves. It is likely to increase employment at least regionally and locally as a shift to products of service occurs. It is likely to encourage a round of innovation and creativity in the application of new and existing but modified business models and it is likely to reduce costs associated with externalities as these become internalised. The growth of renewables and more integrated food and farming systems seems to favour increased employment, especially in the caring professions according to Walter Stahel (3) (4).

Changing information technologies and a distributed/devolved energy grid bring more resources into the hands of the citizenry to make their own decisions and, if diverse, then community resilience in the face of shocks increases too.

The circular economy is a framework for a materials and energy economy which could work long term and many interesting questions lie a little outside these arbitrary boundaries – social policy, taxation and the distribution of the benefits of economic activity are important political questions.

Notes:

(1) http://www.foreignpolicy.com/articles/2011/01/02/gdp_a_brief_history

(2) http://www.actionforhappiness.org/why-happiness

(3) See ‘social ecology’ http://www.product-life.org/

(4) http://www.ellenmacarthurfoundation.org/explore-more/what-the-experts-say/point-of-view-walter-stahel-on-taxation