A Repository of Thoughts, Beginning with the Happiness Index

It's been a long while since I've blogged. But now I've decided to use this blog for another reason - as a repository for my column articles for The Edge Singapore, mainly the year-ended opinion pieces to begin with. Who knows; it might spark off more blogposts in the coming months....In the meantime I am looking at this process to give me some inspiration for ideas on what to write for this year's year-ender which is due in a week!!

Well, I guess the best place to start would be my first year-ended piece, which I wrote in 2010.
this one was about the Happiness Index. I have always tried to find a human/psychological aspect of business in my year-ender pieces, to find a way to tell people that it's not just all about money. It was also my way of tapping into my interest in behavioural economics. And so the first piece looks at how countries around the world were beginning to introduce a national wellbeing or 'happiness index' so to speak. Here it is:


Dec 2010

Bhutan’s done it, France and Canada have been talking about it. And now, the UK is planning to launch one as well.

More and more countries around the world are beginning to look at alternative ways to measure their success by going beyond traditional economic indicators like the Gross Domestic Product (GDP). Instead, measures like Bhutan’s Gross National Happiness (GNH) Index, the Canadian Index of Wellbeing and Australian Unity Wellbeing Index focus on the non-economic factors of wellbeing and happiness.

Efforts to look beyond financial benchmarks like the GDP and Gross National Product (GNP) are not new and in fact, hark back to Robert Kennedy’s 1968 campaign speech when he noted that the GNP ‘measures everything, in short, except that which makes life worthwhile’. It is however a clarion call that’s increasingly being taken up even by the likes of the European Commission and the OECD; both are part of the Beyond GDP initiative that aims to identify the most appropriate indicators of progress, true wealth and wellbeing.  

Yet when UK Prime Minister David Cameron recently announced plans for a national wellbeing index from next April, it was dismissed as ‘woolly’ and ‘airy-fairy’. Granted, the timing of his announcement couldn’t have been worse, coming at the heels of the country’s most severe austerity budget cuts since the Second World War. And the fact that the government is spending £2 million to measure the nation’s happiness at a time when people are facing not-so-cheerful issues like unemployment, tightened household budgets amidst rising living costs, and mass protests against public spending cuts has caused many to see red.

Critics like the Daily Mail’s Melanie Philips have derided the plans as the government’s attempts to control people’s minds. By discovering what people want, she says, the government can develop policies to manipulate people’s choices and behaviour; in short, ‘nudging’ them into wanting ‘the things that the Government wants them to want.’ As expounded by behavioral economist Richard Thaler and law professor Cass Sunstein in their book Nudge: Improving Decisions About Health, Wealth And Happiness, the ‘nudge’ theory asserts that governments can create environments in which people can make better choices for themselves and society. Cameron is said to be so taken with the theory (another big fan is Barrack Obama) that he has set up a ‘nudge unit’ known as the Behaviourial Insight Team in his government, with Thaler as its adviser.

Regardless of the motives, political or otherwise, it is interesting to see that governments are beginning to pay more attention to people’s happiness and wellbeing at a time when one would consider them to be at an all-time low, what with the far-reaching effects of the global economic recession. In fact, it was in Sept 2009 – a year after the world’s banking system crashed – that Nobel prize-winning economists Joseph Stiglitz and Amartya Sen called on global leaders to consider not only economic production but also human welfare, environmental and social sustainability when measuring their nations’ prosperity.

A cynic could contend that focusing on wellbeing detracts attention from dismal economic figures. On the other hand, an optimist could see this as recognition from governments that the relentless pursuit of economic and material success does not necessarily equate happiness and wellbeing at the end of the day. And that in the aftermath of the global financial meltdown, there is realisation that we may have perhaps lost sight of the fact that money and wealth are a means to an end, and not an end in itself.

Measuring happiness and wellbeing is very subjective and unlike financial numbers such as the GDP, is not absolute. After all, what constitutes happiness anyway, as it can mean different things to different people. For its GNH Index, Bhutan looks at psychological wellbeing, education, health, time use, culture, ecology, living standard, and good governance.  The privately-funded Legatum Prosperity Index considers wellbeing issues like health, freedom, governance, safety, education, entrepreneurial opportunity and social capital, as well as economic growth to measure a nation’s prosperity. Potential indicators for the UK’s wellbeing index include health, education, inequalities in income and the environment, as Cameron aims to focus on ‘how together we can build a better life.’

Whether or not GNH will really replace GDP as a global measure of a nation’s success remains to be seen. But at a time when many of us are becoming increasingly disenchanted with the existing economic order, this could serve as a timely reminder that in measuring our own personal success, not everything that’s important in our lives can – or should – be measured in economic or monetary terms. It’s not just our personal GDPs alone that counts, but also our personal GNHs.

Yin F Lim would love an iPad for Christmas, but will settle for good health, peace of mind, the happiness and wellbeing of her family and friends, and peace and goodwill to all mankind.