Prosperity and quality of life
Prosperity and rising economic output – measured in terms of GDP – are not indicative of the quality of life of a country’s population. They say nothing about whether people are satisfied or whether they feel happy or safe.
Even if average income and hence purchasing power in a given country are high, that does not necessarily mean that prosperity is equally distributed and that everyone has the same access to education, employment and healthcare. The state of the environment, too, has an impact on prosperity and quality of life. More and more countries are starting to rethink their choice of prosperity indicators.
Prosperity without growth
Criticism was levelled at the use of GDP as the sole indicator of prosperity as far back as 1972. The Club of Rome, an international group of leading personalities in science, business, culture and politics, pointed out that there are limits to growth. If the economy continued to grow at the same pace, they claimed, everyone would suffer in the end. Quality of life would decline, since unchecked economic growth leads to environmental degradation, social inequality and resource depletion. These concerns are still relevant today.
Some national governments, among them France, Canada, the UK, Sweden and Germany, later set up committees to identify broader and more accurate indicators of prosperity and quality of life. France’s President Nicolas Sarkozy was first. In 2008, he established a commission chaired by Joseph E. Stiglitz and Amartya Sen, both Nobel Prize laureates for economics. They recommended that to measure wellbeing more accurately, greater consideration should be given to the distribution of income, consumption and wealth within a society. Political codetermination, too, plays a role when assessing one’s personal quality of life.
Measuring prosperity differently
‘The search for happiness is also relevant to social progress,’ says Martin Binder, an evolutionary economist at the Max Planck Institute of Economics in Jena, Germany. His award-winning PhD thesis proposes a new method for measuring prosperity and quality of life, which he developed using empirical insights from happiness research, psychology, biology and neuroscience. ‘Today we know that from a certain income level upwards, money is not actually that important to an individual’s sense of wellbeing,’ explains Binder. What does make them happy is friends, family, self-determination in their jobs, or voluntary work. ‘All these things make people happy,’ he adds.
The search for true prosperity
The search for a better indicator of prosperity and quality of life continues. Recently around 200,000 Britons were asked to indicate what makes them happy and/or anxious. The results, it is hoped, will help policymakers improve the population’s level of satisfaction. Meanwhile, in Germany various studies on the subject have produced a number of suggestions in this regard. They are being discussed by an enquete commission entitled ‘Growth, prosperity, quality of life - How to achieve economic sustainability and social progress in a social market system’. Once new indicators of satisfaction have been found, it will be interesting to see how they differ from one society to another.
What constitutes prosperity and quality of life for you? What criteria should be used to measure them? What does ‘happiness’ mean in your home country? Let us know your thoughts, and discuss them with your fellow alumni.