Is this as good as it gets?

Happy days aren’t here again

Last Monday, Jan Zjederveld, Unilever’s director for Europe, told the German edition of the Financial Times that his company was adapting its marketing strategy to deal with “a return of poverty in Europe” by using sales methods that are successful in Asian developing countries. That means for example pushing entry-level lines rather than organic products or premium brands and selling small doses of cleaning products rather than a larger package that may now represent half a shopper’s budget. Unilever sees this as a strategy for hard times until things pick up again. But what if they don’t? What if this is as good as it gets for a whole range of issues worldwide from living standards to geopolitics to personal freedom?

Ever since Enlightenment philosophers like Condorcet and Turgot in France or Hume and Smith in Scotland advocated, in different ways, the idea that society and not just individuals could improve, we’ve grown used to the notion that the communities we live in would become wealthier, better educated, more enlightened, healthier, and so on. More recently, just about everybody assumed that children would have a better life than their parents.

One of the most lasting legacies of the recession that followed the 2007 financial crisis may be the end of that assumption. Even an organisation like the OECD, not known for sensationalism, warned that: “If we want to make sure that the progress in living standards we have seen these past fifty years does not grind to a halt, we have to find new ways of producing and consuming things. And even redefine what we mean by progress and how we measure it.”

The latest OECD Environmental Outlook is equally alarmist about “the consequences of inaction”, to quote the book’s subtitle. Terrestrial biodiversity is projected to decrease by a further 10% by 2050. Without a significant change in policies, global average temperature is projected to be 3C to 6C above pre-industrial levels by the end of the century, exceeding the internationally agreed goal of limiting the rise to 2 degrees. The number of premature deaths from exposure to particulate matter in the air is projected to triple from just over 1 million today to nearly 3.6 million per year in 2050.

Since the Outlook was published, other indicators have reinforced its messages. August 22nd was Earth Overshoot Day, the day when the total resources consumed by humanity will exceed the capacity for the Earth to generate those resources that year. In 1987, Overshoot Day was December 19th and it has been getting earlier every year since. To put it another way, we’d need 1.5 Earths to balance the budget, or 4.1 if everybody lived like a resident of the USA.

Fatih Birol, the International Energy Agency’s chief economist says that “we have to leave oil before it leaves us”. The IEA doesn’t make any predictions about when peak oil will occur, but the BBC published a chart in June estimating when various other non-renewable resources would run out. For minerals, the predictions range from eight years for antimony to 80 for aluminium.

Trends in other domains aren’t very cheerful either. The sovereign debt crisis drags on, and although the subprime crisis is behind us, aggressive lending to people who can’t afford to repay debts that are then rebundled and sold on has re-emerged according to the US Consumer Financial Protection Bureau’s report on student debt.

Speaking of young people, youth unemployment is almost as high as it’s ever been, at 17%, and there are at least 23 million NEETs in OECD countries – young people not in education, employment or training, more than half of whom have given up looking for work. Health is another area where there are fears that the steady progress of recent decades may slow or stop, due to obesity. Half the population is now overweight or obese in over half of OECD countries. Rates are projected to increase further, and in some countries two out of three people will be obese within ten years. Obesity is also a problem in developing countries, and obesity and malnutrition can even exist simultaneously.

I’ll stop there. You could probably add to the list or produce a counter-list of where things are improving. In both cases, many of the items would be based on reasonably objective data while others would be more subjective. But even where there was agreement about what is important, there would be debate about what the priorities should be. My colleague Donata Garrasi of the International Dialogue on Peacebuilding and Statebuilding told me that when she was working in Afghanistan, an official came out from London to consult the leaders of the area she was in about how to spend UK aid money. You’d think they would have asked for a hospital, roads, a school… They asked for a conference centre.

Donata says that people she tells this story to assume it’s in some way linked to corruption around building contracts. It’s not. Having a new centre like this for official meetings is prestigious (very important in Afghan society) and makes the leaders look more professional. This is in turn is vital for new authorities trying to establish their legitimacy and power, and may help to attract donors and political cooperation from governors from other regions. Also, many of the Quick Impact Projects that were built by the American military were conference centres, so those who did not get one were judged less influential by their constituents.

The OECD Better Life Index gives citizens a chance to tell governments what their priorities are. But that still leaves open the question of whether these wishes should be respected, and whether the government has the right to impose unwanted measures it considers in the best interests of the country.

Useful links

OECD work on the environment

OECD work on employment and social affairs

OECD launches Your Better Life Index

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As we mentioned a few days ago on the Blog, this week marks the launch of the OECD’s brand new Your Better Life Index . A quick reminder: The Index is designed to let you compare and contrast the various factors that determine people’s well-being – not just GDP, but a much wider range of things like education, income, housing, security and so on.

The Index was launched this morning in Paris by OECD Secretary-General Angel Gurría l, who quoted Bob Kennedy, who in 1968 said of GNP – a more traditional economic measure – that it “does not allow for the health of our children, the quality of their education, or the joy of their play; it does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials … It measures everything, in short, except that which makes life worthwhile.”

Danilo Türk, president Republic of Slovenia, spoke next and described the Better Life Index as a “very important and very precious present” from the OECD as it marks its 50th anniversary. He praised the Index’s “imagination and creativity,” and said he hoped it would help drive a rethinking of measuring progress: “I hope the quote from Kennedy will look obsolete in a few years’ time,” he added.

Inevitably, with such a new project, there were plenty of ideas from panellists at the opening sessions of the OECD Forum on how the Index could be improved and, just as importantly, made relevant to people’s lives and to policymaking.

Jacques Attali, Chairman of PlaNet Finance, a non-profit that works on microfinance issues, felt the Index needed to take more account of democracy issues, freedom of speech and corruption. He said it had become clear that these issues were missing in many international indicators, especially the Millennium Development Goals, but that they were essential to social progress.

Pravin Jamnadas Gordhan, South Africa’s Minister of Finance, said a test of the Index’s usefulness would be whether it helped publics to communicate with politicians. He warned that “significant parts of the population feel excluded,” citing groups like young people in Spain and workers in Greece. He said there was an urgent need for “ruling elites hear voices that are marginalised in society.”

Sharan Burrow, General Secretary, International Trade Union Confederation, liked the Index, but warned that its focus on a broader approach to thinking about well-being needed to be reflected in policy: “The Index means little if it remains separate from our dominant economic thinking.” She also was critical of mixed messages from the OECD: The organisation’s policy thinking on structural issues was bad for workers and would foster inequality, she said, which was at odds with that the thinking behind the Index.

Also commenting was Yoshinori Suematsu, a Japanese Senior Vice-Minister, who said the catastrophes that have struck his country this year had focused people’s attentions on what is really necessary for living a good life. One of the most important, he said was social networks, and he noted that since the earthquake and tsunami sales of engagement rings had jumped by 50% in Japan – a mark of people’s little need for engagement in a dark time.

A quick final note: The Index is already getting plenty of media coverage: “Canadians can’t complain,” reports The Globe and Mail which reckons that the Index shows Canada is a pretty good place to be. What do you think? Take a look at the Index and let us know.

Useful links

OECD’s 50th Anniversary Week