How Useful Is Gross National Happiness As An Alternative To GDP?

Sustainability, social progress, health and well-being: all important considerations in the way we live our lives and run our businesses, and all ignored by Gross Domestic Product (GDP). As an alternative, we need a measurement that more accurately reflects the complex realities of our global economies and takes into account all that we value for well-being and success. A growing number of people worldwide are calling this concept “Gross National Happiness”.

Strong Economy Improves Quality Of Life

First articulated in 1972 by Bhutan’s former King in his economic plan, Gross National Happiness encompasses the idea that a strong economy improves quality of life, and that both economies and quality of life are much more than monetary wealth.

GDP Out Of Touch With Reality

It’s no secret that GDP mis-states an economy’s success. It does not count volunteer work, workplace productivity, or profit gaps caused by long-term planning. GDP was never meant to be a perfect measurement, and these activities are difficult, if not impossible to measure in monetary terms. But even beyond these omissions, the use of GDP is problematic because it essentially rewards irresponsible and unsustainable business decisions, as long as output follows. For example, the costs of the Gulf oil spill will be added to, not subtracted from, the GDP of the United States in 2010. Imperfections aside, GDP is still the primary worldwide economic indicator. And it’s becoming more and more clear that using GDP is out of touch with reality.

Alternatively, Gross National Happiness seeks to measure the real benefits of, and as a result encourage, sustainable and responsible business decisions – even those that do not lead directly to increased profit or output. If a more comprehensive indicator for success were used worldwide, the entire bottom line of the economy would be shifted; companies would have more incentive to incorporate environmental, social and sustainable practices into their programs, investments and brands.

Measuring Sustainability and Environmental Social Responsibility

As an underlying principle to guide individuals, businesses and governments in their decisions, Gross National Happiness is a concept that’s gaining traction. It’s encouraging to see it being discussed in the blogosphere and in conferences both in the United States and overseas. The challenge now is to develop concrete and objective measurements for the indicators valued by Gross National Happiness. This is not an easy task. How can sustainability be measured? What are the quantitative benchmarks of environmental and social responsibility of businesses and governments? In order to be a plausible alternative to GDP, Gross National Happiness will need to go the route of the World Development Indicators or the Human Rights Index, used by the World Bank and UN respectively, by employing transparent, universal and comprehensive indicators and scales.

Until then, Gross Domestic Happiness is a philosophy – one that can guide businesses in making decisions that benefit their own company, community and the environment.

Healthy Living Marketing helps leading companies throughout North America shape, communicate and demonstrate their commitment to acting responsibly. For information on how to create Gross National Happiness for your own brand, please call (301) 378-0384.

Tags: environmental social responsibility, GDP, Gross Domestic Product, Gross National Happiness, measuring results, quality of life, strong economy, sustainability