Imagine an economy that focuses on achieving population wellbeing and social justice instead of profit and mathematical growth. This may sound utopian, but some governments are already making progress – despite or maybe even as a result of the coronavirus crisis.
Text: Dietmar Schobel
“A wellbeing economy aims to achieve social justice on a healthy planet” – this is how Katherine Trebeck, speaker at the European Health Forum Gastein 2020, describes the concept in a nutshell. The economic model promoted by her as Advocacy and Influencing Lead of the Wellbeing Economy Alliance (WEAII) is intended to transform and gradually replace the current system. WEAll is a global network of at least 150 organisations and over 50 renowned academics. According to a WEAll policy paper, the currently dominant economic system is “unsustainable, unfair, unstable and unhappy”, consuming 1.5 times more natural resources than our planet can offer every single year, and being “on course to using three planets’ worth by 2050”.
This criticism of the present economy addresses the primary orientation and dependency on growth, or specifically the focus on growth of the Gross Domestic Product (GDP). Although this mathematical value for measuring a nation’s economic performance became established in the 1930s as a response to the worldwide economic crisis during the interwar period, it has now become the overriding target in politics and business. The GDP is the sum of all goods and services that are produced in one year within the borders of a national economy. However, the GDP is a purely mathematical variable and – as Robert Kennedy remarked in 1968 while running for the office of US President – it therefore measures “everything except that which is worthwhile”.
What is supposed to grow? And why?
This statistic – whose development is closely watched quarter by quarter, year after year by decision-makers, financial experts, entrepreneurs and members of the general public – also contains spending on gambling, prostitution, tobacco and alcohol consumption, as well as the removal of environmental pollutants, for example. On the other hand, it fails to include services such as home nursing, the education of children in families, the significance of protecting nature for health, or the value of good social relationships – whether with partners, relatives, friends, neighbours or acquaintances, to name only a few examples. Supporters of a wellbeing economy are therefore convinced that we must move from quantitative to qualitative growth. “Instead of striving for growth at any cost, we need to ask ourselves what is supposed to grow, and why? Who is supposed to benefit?” remarks Katherine Trebeck.
The positive sides of economic growth are in no way refuted by the advocates of a wellbeing economy. From a global perspective, the numerous achievements for humankind as a whole over the past decades include a reduced number of people living in extreme poverty and a decrease in infant mortality. Certain widespread diseases are now under better control or, as in the case of smallpox, were even eradicated altogether. And according to the UN, the number of primary school children without access to education was almost halved worldwide between 2000 and 2015. These are only a few examples of how the lives of many people have been improved when growth is used well – directed to those who need it most and invested in collective institutions.
The crucial point was reached long ago
At the same time, as a result of the developments in recent decades, the human race has reached a crucial point in its history. It is not just the environment in which we live that is being increasingly harmed by today’s prevailing economic model. The inequalities between individual groups of the population are becoming more pronounced in many countries as well. According to the World Health Organization (WHO), an ever greater number of people are suffering from mental illness despite rising prosperity. The Global Burden of Disease Study 2017 revealed that more than 264 million people were affected by depression alone. “We are now at a point where, particularly in the GDP-rich countries, there are more than enough goods and services for everyone’s needs. We need to move away from the concept of creating more regardless of the cost, and focus on fairer distribution of what we already have, in a manner that enables it to be enjoyed by everyone,” says Katherine Trebeck.
The challenge is to make ourselves at home in the world.KATHERINE TREBECK, ADVOCACY AND INFLUENCING LEAD OF WELLBEING ALLIANCE
The details behind this work are described by Trebeck and her co-author, the journalist and activist Jeremy Williams, in their book “The Economics of Arrival”, published in early 2019. The title refers to the fact that after decades of flying high on economic growth, the GDP-rich countries need to think about settling down. The two authors write: “In the industrialised world, the great challenge is not to remain competitive, or to increase efficiency or production. It is to slow down without derailing, to reimagine progress beyond more of the same. The challenge is to make ourselves at home in the world.”
Pioneering work by four governments
This may sound necessary and sensible, or unrealistic and utopian. However, the four governments of Scotland, New Zealand, Iceland and Wales are already working towards a wellbeing economy, sharing their experiences in the Wellbeing Economy Governments (WEGo) partnership. They are currently focusing specifically on how they can continue their efforts – despite or even as a result of the coronavirus crisis. In Scotland, decisions are influenced by the National Performance Framework, which was renewed in 2018 and combines the measurement of how well Scotland is doing in economic terms with a broader range of wellbeing measures.
In New Zealand, Prime Minister Jacinda Ardern presented the first wellbeing budget in 2019. State expenditure was to be evaluated on the basis of whether it contributes to the wellbeing of the population, and not just whether it increased economic growth. In Iceland, the population was involved in developing a set of 39 wellbeing indicators for the future orientation of development in politics, the economy, and society. Back in 2015, Wales created the position of Future Generations Commissioner and passed the “Well-being of Future Generations Act”. This legislation requires public bodies in Wales to think about the long-term impact of their decisions, to work better with people, communities and each other, and to prevent persistent problems such as poverty, health inequalities and climate change.
Concrete steps are important
Katherine Trebeck emphasises: “Other concepts – such as the Doughnut Economy developed by Kate Raworth – and other countries such as Sweden, France and Germany, and the European Union with its Green Deal – have not dissimilar goals.” She adds that it is naturally not the label that is important for achieving greater social justice and sustainability, but rather that concrete steps are taken. As a civil society institution, the Wellbeing Economy Alliance sees it as their responsibility to support and amplify the work of those working towards that goal, regardless of the term they use.
Has the coronavirus crisis made it easier or more difficult to reorientate the economic system?
Has the coronavirus crisis made it easier or more difficult to reorientate the economic system? “It is difficult to gauge. I believe that we are at a crossroads: we may see decision-makers doing everything in their power to stimulate the economy as rapidly as possible when the coronavirus crisis comes to an end – focusing on outdated metrics and using harmful methods. So there is a particular danger that they will continue in the same vein as before. Then again, state expenditure around the world is presently at a level that was inconceivable until very recently, which offers huge opportunities for employing this investment in a specific way, namely for sustainable development that benefits the whole of society. There’s no better time than now.”