Measuring Our Success as a Society | Omega

The Gross Domestic Product (GDP) is only one measurement of a country's health. Here are some others that take both people and the planet into consideration. 

The saying "what gets measured, gets managed" is the business equivalent of the idea that our thoughts shape our reality. We can also apply the concept to society: how we measure our success (what we pay attention to) indicates what we value, and that in turn shapes our culture and civilization.

What are we currently paying attention to? How are we measuring our success? And do we want to measure (pay attention to) something else if we want to create a more inclusive, equitable, just, and ecologically sustainable society?

Gross Domestic Product (GDP)

The dominant economic measurement today is the Gross Domestic Product (GDP). It measures the value of all goods and services produced by the country. As an aggregate measurement of human economic activity, the GDP works reasonably well (although it overlooks nonmonetized and black market work, both a significant part of the economy). 

However, the GDP is often crudely interpreted by politicians, economists, and journalists—if it goes up, that's good; if it goes down, that's bad. Herman Daly, the godfather of ecological economics, explains how this approach ignores the fact that after a certain point aggregate growth becomes "uneconomic growth," doing more harm than good, often due to pollution and environmental degradation.

It also overlooks the fact that the GDP makes no distinction between money trading hands due to things we can all agree are good, such as more people getting proper toilets, and things that may actually hurt society, like a building boom after a hurricane has destroyed a coastline. GDP calculations tally both simply as economic activity.

The GDP is an instrument that doesn't seem up to the task of guiding us from today's dirty (fossil-fuel based) economy to tomorrow's clean economy. We need another way to measure our success, either in place of or in addition to GDP measurements. Fortunately, there are some great systems already in use. 

Genuine Progress Indicator (GPI)

Calculated since 1995, the Genuine Progress Indicator (GPI), developed by Redefining Progress, "starts with the same personal consumption data that the GDP is based on, but then makes some crucial distinctions. It adjusts for factors such as income distribution, adds factors such as the value of household and volunteer work, and subtracts factors such as the costs of crime and pollution." 

Other factors incorporated in the GPI are the effects of resource depletion and long-term environmental damage, changes in the availability of leisure time, so-called defensive expenditures that households are forced to make to avoid eroding their quality of life, and the lifespan of consumer goods.

Including all these factors creates a much different picture than the single-focused GDP. It shows that a steadily increasing GDP hasn't led to improvement in people's lives since the 1970s. 

Gross National Happiness (GNH)

Another measurement that attempts to take a more holistic view of a society is the Gross National Happiness (GNH), originally promoted by Bhutan and now embraced by the United Nations. 

GNH takes into account many of the same factors as the GPI, but also measures the spiritual well-being of a nation, the community and cultural involvement of the people, and their level of concern for nature. 

According to Bhutan's prime minister, quoted in Columbia University's World Happiness Report, GNH attempts to get at a deeper level of happiness than "the fleeting, pleasurable 'feel good' moods so often associated with the term." Calculating this deeper definition of happiness reveals that 41 percent of the Bhutanese are happy, with the rest of the population reaching sufficiency in just under 60 percent of the specific categories considered by the GNH measurement.

Ecological Footprint & Human Development Index (HDI)

While GPI and GNH are improvements over GDP in terms of considering people and the environment in the equation, two other helpful measurements of how well a country is balancing ecological and economic concerns are the Ecological Footprint (which represents biocapacity versus demand) and the Human Development Index (which accounts for health, education, and standard of living).

In 2012, the Worldwatch Institute used these two measurements to discover which countries have a high development of human development and consume resources sustainably. The only found one: Peru. In previous years Cuba, Ecuador, and Colombia were also on the list, but each has increased their ecological footprint enough that they are now just off the mark. 

Emulating these nations isn't the answer for other countries (as they also have plenty of social and environmental problems), but knowing that it's possible to reach a place—where people and the planet are both taken care of—is important. Studying these countries can help us start to redefine what it means to be a developed nation and take care of the environment simultaneously. 

In a world that is beginning to experience what Jeremy Rifkin calls the Third Industrial Revolution, nations that successfully balance high levels of human development with an economy that functions within ecological limits will be in the best position moving forward. It's these countries that will be the leaders in creating just and sustainable societies.

© 2014 Omega Institute for Holistic Studies