In 1968 Robert Kennedy critiqued the Gross National Product (GNP) as a flawed measure of progress; he noted that the GNP measures everything (in money terms) “except that which makes worth while.” Our work is motivated by Kennedy’s challenge: to develop a new system for “measuring what matters” in terms of our well-being and happiness.
For over 60 years, we have been using an accounting system for measuring economic progress called the Gross Domestic Product (GDP) that tracks all money being spent on goods and services in the economy. This might be a good accounting of cash flow but it fails to measure the actual things that makes life worth living (including our happiness and state of well-being), as Robert Kennedy noted in 1968 when critiquing the GDP.
What is “genuine wealth”?
Genuine Wealth is a model for measuring and managing the overall well-being and happiness of a community or organization by explicitly accounting for the assets (human, social, natural, and manufactured or physical) of a community or organization that are linked to individual and societal values and aspirations for a good life.
Genuine means to live authentically, in accordance to the values that make life worth living. If our measures of progress and performance align with what we value most, then we have a hope of “measuring what matters” to our well-being.
Wealth is much more than financial and material things; the word comes from the 13th Old English meaning “the conditions of well-being.” Therefore Genuine Wealth is about accounting for the things that truly make life worthwhile.
Measuring what matters most to the happiness and well-being of people’s lives will require not only new metrics of progress but a new economic system that focuses less on growth and more on improving well-being.
This new economy of well-being and happiness was proposed by Bhutan’s Prime Minister Jigme Y. Thinley on April 2, 2012 at a special UN meeting in New York. Bhutan has adopted the Gross National Happiness measure of progress as an alternative to the GDP. Bhutan is the first nation in the world to have adopted the Gross National Happiness measure of progress.
Genuine Wealth is a new well-being-based performance measurement system that I believe will become the international standard for measuring and managing the real well-being of communities and nations.
GDP is not the be all and end all of economic success. There are other ways to measure the progress of a society. Using the Genuine Wealth accounting model it is possible to account for the well-being of three sorts of capital:
- physical or manufactured (infrastructure and the means of production)
- human (wellness, skills and education)
- social (relationships, belonging, trust) and
- natural (oil, gas, minerals, forests, soil, water)
While the first three are renewable, natural resources such as fossil fuels, soil, biodiversity, and even forests may be depleted, sometimes permanently.
The United Nations is now proposing the “Inclusive Wealth Indicator” as a challenge to the myopic focus on short-term profits and economic capital inherent in GDP. The Inclusive Wealth Indicator, which is scheduled to launch later this year, captures economic growth as the aggregate of a country’s wealth including its natural resources. In its early findings, it found that natural capital declined 46% in Brazil and 31% in India during the last 17 years. This reduced the countries’ blazing GDP growth rates to a more modest “inclusive wealth” increase of 3% in Brazil and 9% in India.
Genuine Wealth* accounting and analytics will help communities, businesses and countries account for their overall economic, social and environmental well-being in the form of a new and genuine balance sheet.
This way the real wealth of nations can be measured in relationship with what people most value about a good life.
Our goal is to provide individual, businesses, communities and national governments with practical tools for the regular assessment, reporting and enhancement of their real wealth, to create flourishing, resilient and happy communities of well-being.
* Genuine Wealth Inc. is a cooperative business founded in Edmonton, Alberta, Canada May 10, 2012 by Mark Anielski, Bill Craig, Dominic Mishio and Robert McGarvey.
Excerpted and re-posted by permission of the author from his blog post at anielski.com. To read the complete article go to http://www.anielski.com/measure-matters-well-being/#more-762
- Measuring What Matters: Seeking a New Understanding of Wealth (Anielski video)
- The Politics of a Dollar (Block)
- Flying Down (McKnight video)