Reoccupying Happiness: Building Flourishing Economies of Wellbeing - PDF document

Reoccupying Happiness: Building Flourishing Economies of Wellbeing April 14, 2012 Mark Anielski * One must make a new system that makes the old system obsolete. Buckminster Fuller Reclaiming the language of economics Economics and the gospel of economic growth has failed humanity as it relates to delivering on the returns to well-being we all desire: to live happy and meaningful lives. The economics of eternal growth has lost touch with the original Greek meaning of the word economy ( oikonomia ), which means the management of the household. Economists have also forgotten the meaning of words like wealth , which originates in the 13 th century Old English meaning ‘ the conditions of well-being. ’ Or the word value , generally associated with money, which actually means ‘to be worthy or strong’ from the Latin valorum . And competition comes from the Latin ( competere ) meaning ‘to strive together.’ Instead of genuine economists, we have become practicing chrematistics ( what Aristotle defined as the art of getting rich or the science of making money). Aristotle distinguished economics from chrematistics. He argued that the accumulation of money itself is an unnatural activity that dehumanizes those who practice it. As an Alberta ecological economist and adjunct professor of corporate social responsibility and social entrepreneurship at the University of Alberta’s School of Business, I ask my business students: what is an economy for? What is the role and responsibility of business in a society focused on returns to wellbeing? Why do we measure progress the way we do? Why is it that despite rising levels of gross domestic product (GDP) we have seen no commensurate increase in self-rated happiness of Americans or Canadians? If continuous economic growth has failed to improve the happiness index of nations, then why must be continue to grow the economy despite evidence that we may be destroying our very life capital (human, social and natural) which is the foundation of a good life? What if the progress of our economies were measured in term the conditions of wellbeing and self-rated happiness that psychologists tell us contribute most to our genuine happiness and societal wellbeing, including the strength and joy of our relationships? ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ * Author of The Economics of Happiness: Building Genuine Wealth , and President of Anielski Management Inc. based on Edmonton specializing in the measurement of well-being and happiness. ¡ 1 ¡

Eduamonia: Happiness Aristotle, the Greek philosopher, defined happiness ( eudamonia 1 ) as ‘well-being of spirit’ and noted that happiness was a sense of well-being resulting from achieving excellence in the fulfillment of one’s functions. Another translation of eudamonia is "human flourishing.” This relates to the importance of living a virtuous life and requires that each individual discover their vocation – their purpose for being. Aristotle said that happiness results from a good birth, accompanied by a lifetime of good friends, good children, health, wealth and a contented old age, and virtuous activity. The Buddha noted that the purpose of our lives is to be happy. Whither Alberta’s Progress? It was in 1996, when I first read about the US Genuine Progress Indicator (GPI) – an alternative measure of wellbeing to the GDP – developed by Redefining Progress, a San Francisco-based economic think-tank. As a senior economic advisor at Alberta Treasury, I dreamed of a day when I might Alberta might adopt such a measure of wellbeing. In 1999 I had the opportunity to work on an update the US GPI as a senior fellow with Redefining Progress. Then in 2001, with a dream of a GPI for Canada, I lead a team of economists and biologists at the Pembina Institute to develop a prototype GPI sustainable well-being account of Alberta’s progress between 1961 to 1999. We asked: was Alberta on a sustainable path? The results of our study made the local and national news. The front page of the Globe & Mail on April 23, 1999 announced the results with the headline “Fat Cat Albertans Struggle With Happiness’ while The Edmonton Journal’s front page read “Alberta’s Natural Capital Slipping.” We had struck a chord or a nerve through our forensic accounting of well-being. Our study revealed that despite 40 years of steady economic growth (an average GDP growth of 4.4 percent per year), Alberta’s overall index of well-being (a 50 indicator GPI composite index) had declined at an average rate of 0.5 percent during the same period. The economic credo that a rising tide of the GDP lifts all boats had been repudiated again. What we lacked longitudinal data on happiness of self-rated wellbeing that could tell us whether or not Alberta’s are feeling happier today than 40 years ago. It is rather remarkable that while pollsters collect opinions about all kinds of issues and economists track GDP quarterly, Albertans are not asked simple questions about what makes them happy (or unhappy) about living in Alberta. What might, for example, oilsands workers in Ft. McMurray say about whether their work is meaningful or brings them joy? One ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ 1 Etymologically, it consists of the word "eu" ("good") and "daim ō n" ("spirit") ¡ 2 ¡

thing we do know: Alberta’s GDP continues to rise with each barrel of oil we extract and export. Since the release of the Alberta GPI report 10 years ago, I’ve continued to track key well- being indicators which I intuitively feel would matter most to happiness of my Alberta friends and neighbours. Two of the more disturbing statistics include the incidence of cancer and income inequality. Between 1981 and 2006 the incidence of all cancers (the rate per 100,000) increased by 23.6% in males and 28.4% in females while Alberta’s real per capita GDP increased by 52.2% over the same time period. Regrettably more cancer is good for Alberta’s GDP (the more we spend on cancer treatment the more GDP grows) though a liability for happiness. Income inequality is also rising. Alberta is second only to B.C. in terms of the gap between rich and poor and this gap has been rising since 1981. Alberta’s Gini coefficient for after-tax family income — a number between zero and one that measures the relative degree of inequality in the distribution of income — has increased 14.2% between 1981 and 2009. Why is inequality important to happiness? Recent research by epidemiologists Richard Wilkinson and Kate Picket in their book Spirit Level found concrete evidence that inequality in societies leads to regrettable erosion in the social capital of communities. The authors found that inequality causes shorter, unhealthier and unhappier lives; it increases the rate of teenage pregnancy, violence, obesity, imprisonment and addiction; it destroys relationships between individuals born in the same society but into different classes; and its function as a driver of consumption depletes the planet's resources. They also show that for virtually every measure of quality of life there is a strong correlation between a country's level of economic inequality and its social outcomes. In almost all cases, Japan and the Scandinavian countries are at the favourable "low" end of inequality, and almost always, the UK, the US and Portugal are at the unfavourable "high" end, with Canada, Australasia and continental European countries in between. The bottom line is that we do better when we are more equal. Albertans are blessed with tremendous natural capital (oil, natural gas, arable farm land, and water), social capital (a strong sense of belonging) and human capital (people, entrepreneurialism, and spirit). Yet the province is without a comprehensive balance sheet that accounts for the wellbeing conditions of these most important forms of life capital. At the same time unfunded ecological liabilities, in the form of carbon emissions and the degradation of ecosystem and their ecological services, go unaccounted for either on balance sheets of government or corporations. Measuring happiness is the all the rage Since the release of my book (The Economics of Happiness: Building Genuine Wealth) in 2007, there has been an explosion of other books and works on the subject of the ¡ 3 ¡