“That action is best which procures the greatest happiness for the greatest numbers.” – Francis Hutcheson (1694-1746)
What’s in a number? If the number is GDP, the answer is almost everything or not enough, depending on your point of view. To some economists, GDP is a good – or as good as we’re ever likely to get – measure of progress. If an economy’s growing, then people are (probably) getting richer and able to spend more on the things they need and the things they want. Ergo, progress.
But to others, not least the Nobel laureate Joseph Stiglitz, as well as a growing number of social scientists and environmentalists, GDP leaves out a lot. (Indeed, the strengths and failings of GDP as a measure are being debated right now at The Economist.) Yes, it may show economic growth, but it doesn’t show if that growth is sustainable, if it’s creating unwanted side-effects like pollution, or who’s benefiting. To use an analogy from the WWF, GDP is a great speedometer, but doesn’t a car need other indicators – a dipstick in its petrol tank, brake lights, temperature gauge?
Such questions have come to the fore in recent decades. Increasingly, people are asking if we should pursue economic growth – rising GDP – for its own sake. In the eyes of many, growth has come to be associated with environmental disaster, growing social inequality and – especially in the wake of the 2008 financial meltdown – instability. None of this is fully reflected in GDP.
Does that matter? Yes. “Statistics are not an end in themselves,” says the OECD’s Angel Gurría. “Their importance lies in the policy discussions they stimulate as much as the evidence they provide.” In other words, what we measure governs the things we strive for, And if we can’t measure what’s really happening in our lives we won’t design policies that best serve our economic, social and environmental needs. That’s why numbers matter.
But which numbers? Over the past 80 or so years, our societies have been gathering ever more hard data – first on the economy, then on the health of our societies and later about the environment – as well as “soft” data (like, “do you feel happy?”). Indeed, so much is now available that it can be hard to work out what matters and what doesn’t. In response, there have been numerous attempts to combine data to show the progress of people and societies, for example the Genuine Progress Indicator, the UN’s Human Development Index and the European Commission’s Beyond GDP project. Governments are getting interested, too: Late last year, the UK government announced plans to measure people’s “happiness”.
The question has also been the focus of a lot of work here at the OECD – since 2008, the OECD has hosted the Global Project on Measuring the Progress of Societies, which has its own wiki – wikiprogress.org.
And next week, the story of measuring progress steps up a pace with the launch of (drum roll, please) … Your Better Life Index.
Unlike other projects, Your Better Life Index is fully interactive and reflects primarily the interests and concerns of you, the user. So, rather than the OECD ranking countries in terms of quality of life, it’s up to users like you to rate your country on the things you feel make for a better life – housing, income, education, the environment and so on. You can share your findings with other users, and over time Your Better Life Index will build up a picture of the issues that people in OECD countries and, eventually, further afield, believe are most important to their societies.
It all goes live here during OECD Week on May 24 at 10am in Paris (5pm in Tokyo, 9am in London and 4am in New York).