In times like this it is not hard to see why economics has long been known as the dismal science. As the world grapples with the consequences of the pandemic, world leaders and economists are rummaging through their toolkit for appropriate solutions. However, as Australia and other countries attempt to emerge from the economic ruins, is this the time to rebrand the economics discipline? As governments decide on policies to support the economy, should they place a greater emphasis than before on the wellbeing and happiness of their citizens?
The pursuit of increased economic activity often leads to greater individual and community happiness. Although, the notion that increasing gross domestic product (GDP) will always lead to improved wellbeing for citizens is not necessarily true. The latest figures (2019) from The World Bank reveal that Singapore has a GDP per capita of US$65,233, whereas Costa Rica’s GDP per capita is US$12,238.[i] However, the 2019 World Happiness Report produced by the United Nations has Costa Rica (12th) approximately 20 places higher with regards to overall levels of happiness than Singapore (34th).[ii] Based on similar figuresYuval Noah Harari in his book, Homo Deus, poses an interesting question: “Would you rather be a highly productive but dissatisfied Singaporean, or a less productive but satisfied Costa Rican?”
I will leave the choice up to you—but the question however does suggest an interesting balancing act for policymakers to be aware of. Bhutan is the country that has pioneered the narrative of prioritising pleasure over production. The nation’s first legal code in 1629 stated that “if the government cannot create happiness for its people, there is no purpose for the government.”[iii] Bhutan has since continued to adopt this sentiment and in 1972 the 4th King of Bhutan, King Jigme Singye Wangchuck, declared that “Gross National Happiness (GNH) is more important than Gross Domestic Product.”[iv] The government of Bhutan subsequently developed the GNH index to more holistically measure the overall wellbeing of its citizens. The index comprises both objective (more heavily weighted) and subjective indicators based on four pillars: good governance, sustainable socio-economic development, cultural preservation, and environmental conservation. The index informs policy decisions, so that each pillar and various sub-pillars are considered prior to implementation.
Bhutan was, perhaps surprisingly, ranked 95th in the aforementioned World Happiness Report likely due to a greater weighting given to GDP per capita. This demonstrates the difficulties in measuring happiness. Despite this, Bhutan benchmarking their policy decisions against GNH is an interesting concept which many other governments could place greater emphasis on. The current headlines surround how the Australian economy has and will continue to suffer because of the Stage 4 lockdown in Victoria and how various proposed schemes will attempt to ‘boost our economy.’ Now is the perfect time for policy makers to consider the impact on the country’s overall wellbeing and push policies that directly target our ‘gross national happiness.’
Unsurprisingly, the Nordic countries namely, Finland, Denmark, Norway, Sweden and Iceland are consistently rated among the happiest in the world. The World Happiness Report attempted to uncover the reasons why these countries consistently feature in the top handful. They found that quality institutions, informed citizens and a trustworthy and well-functioning government were factors (among many others) that heavily contributed to their continued high levels of happiness. Moreover, the report found that there was “no secret sauce specific to Nordic happiness that is unavailable to others.”
Ultimately, governments around the world face a remarkably difficult challenge to power us through to the other side of the health and economic crisis. Emerging from this pandemic is the time for other governments to take inspiration from the Nordics and attempt to replicate their success. Evidently, there will be great economic reform required and perhaps this is the time to pivot (slightly) to move towards policies with greater consideration of individual and community wellbeing. As mentioned, there is “no secret sauce” and recent initiatives such as the Victorian Government’s $60 million funding boost for mental health are a step in the right direction. As the saying goes, ‘crisis creates opportunity’ and our unfortunate circumstances provides a springboard for a happier and more productive future.