Ours is an age when Gross Domestic Product (GDP) has become something that indicates our living standard. It has been the main device used to measure a country’s economy since 1944 (Dickinson). It indicates which countries are economically developed and the living standard of the countries’ people. On the other hand, Gross National Happiness (GNH), a newer term than GDP, emphasizes more on a nation’s wellbeing than economic status and was introduced in 1972 by the fourth king of Bhutan, Jigme Singye Wangchuck. Bhutan is the only country till now that has adopted GNH to measure the progress of the nation instead of GDP. This paper, will argue that if the measurement of GNH is practiced in all countries, the world will be a better place to live in because happiness will prevail and inequality will not exist.
The measurement of GDP is done by aggregating a country’s all of private and public consumption, government outlays, investments and exports less imports. Indirectly, GDP is related to the income of the individuals of a country because the more a person earns, the more he or she can consume. Conventionally, economists look at GDP to understand a nation’s economic development. When the GDP of a nation is going up, the economy is good and the nation is advancing (Lisa). On the other hand, the notion of GNH involves sustainable development taking a holistic approach towards the concept of progress. In GNH, equal importance is given to the non-economic form of well-being. The measurement of GNH contains nine domains: psychological wellbeing, health, education, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards. The domains here measure the well-being of the Bhutanese people, where well-being means accomplishing all the conditions of a ‘good life’, if not a monetarily wealthy life (Bhutan GNH Index).
According to David R. Loy, economists in present days live in a world of statistics and equations where human value does not exist (1). While comparing between nations, we just look at different data, like GDP, that indicate which nations earn more and consume more. Eventually, ranking of the GDP shows for different countries set them off for a race where they compete to increase their GDPs. As GDP has no upper limit, there is no finishing point of this race and the race keeps on going. Being so engrossed in the race, nobody notices that their lives are not at a state of well-being. The race is also devoid of human value, which makes a human being ‘human’. It lacks religious values too. Loy says, “Increasing our ‘standard of living’ has become so compulsive for us because it serves as a substitute for traditional religious values — or, more precisely, because it has actually become a kind of secular religion for us” (6). It also takes away people’s mental peace as they always think of increasing their wealth. The desire for wealth preoccupies us and shadows our life with the fear of poverty (Loy 8).
On the contrary, the limit of GNH is just to be happy. A person is considered happy even if he or she does not have adequacy in all of the domains because individuals having adequacy in at least six of the nine domains are considered happy. In pursuit of the nine domains to be happy, people end up having a healthy and prosperous life. For example, under the domain of ‘Psychological Well-being’, they acquire spirituality, life satisfaction, positive emotions, and avoid negative emotions, like anger, fear, worry, jealousy, and selfishness. This reduces people’s craving for material well-being. According to Lyonpo Jigme Thinley, Bhutan’s home minister and ex-prime minister, material well-being is only one component that does not ensure that people are at peace with their environment and in synchronization with each other. This is actually a concept that is based on Buddhist Philosophy (Revkin 2). Buddhism values nonattachment to material needs and upholds the virtue of having less wants, but that does not mean that it encourages poverty. In Buddhism, poverty is measured through the lacking of fundamental needs to lead an adequate life. In fact, it is a “clever way to enjoy your life,” said the Vietnamese teacher Thich Nhat Hanh, as mixing up the quality of life and the quantitative standard of living is considered foolish (Loy 5). Lord Buddha, the founder of Buddhism, has also instructed that satisfaction with whatever you have is the greatest wealth (Loy 4). This relates back to the domain of ‘Psychological Well-being’ where life satisfaction is achieved. So, in terms of Buddhist philosophy, a person satisfying that domain is not considered as poor even if he or she does not earn a lot. Thus, GNH is more important in people’s lives because it teaches us the need for self-limitation and self-satisfaction, instead of GDP that renders us a monetarized society.
GNH also ensures equality in the society. We emphasize more on the GDP and let it trigger the competition of earning more wealth. While competing, we do not look at those countries that have a lower GDP than us and feel happy by ourselves for having a higher GDP. We tend to look at those that have a higher GDP and push ourselves to earn even more. We tend to follow every possible way, legal or illegal, to increase our assets. In this competition, the poor fall behind because they cannot join or survive. We use up all the resources and do not leave anything for the poor in this competitive environment. That’s how they become deprived. Lack of resources and infrastructure make their lives miserable and definitely a miserable life with no sufficient food or adequate shelter is not a happy life. On the other hand, those who are using up all the resources in trying to make themselves richer and richer cannot call themselves happy either because they are never mentally satisfied. They always want to increase their income and accumulate GDP. This creates disparity between the rich and the poor. According to the United Nations Development Report for 1998, the three richest people on the planet have assets that exceed the combined Gross National Product of the 48 poorest countries (Loy 8). Loy states, “Three-fifths of the 4.4 billion people in developing countries lack basic sanitation, one-third have no safe drinking water, one-quarter are inadequately housed, one-fifth undernourished and one-fifth lack access to modern health services” (Ibid). Development agencies like World Bank try to help those countries, but unfortunately, it is usually the wealthy class of the country that is benefitted by this help while the poor remain poor.
Now, suppose a person in Bhutan has a job that pays him an adequate amount of money. He has a nice little home to live in with a nice family; he is able to meet the needs of his family; he has good neighbors; he does voluntary activities. On the whole, he leads a healthy and peaceful life. So, on the basis of the nine domains, he is a happy man. And it is the GNH index that shows him that he is happy, rather than showing him that there are other people in the world whose living standards are higher than his own, which GDP does. So, when the man finds himself happy, he will not desire for more. He will not hanker after wealth, so there will not be any competition of earning more wealth. Thus, he will just stay happy with whatever asset he has. In this way, he is just using up the resources that are allocated for him. Therefore, everyone gets an equal access to the resources. As a result, the poor also get a chance to better their condition by accessing resources and that creates equality in the society, not only on the basis of happiness, but also on the basis of livelihood.
One might say that emphasis on GNH will make people less ambitious as people will remain satisfied with what they have and will not have craving. But the point to be noted is GNH does not discourage non-economic achievements. Suppose the same person I have mentioned earlier, who is happy already, has invented a new technology after a lot of hard work. He had the ambition to invent such technology that inspired him to be successful. But for his achievement he will not expect any monetary reward because in pursuit of the nine domains, he is already devoid of craving for wealth. Earning money was not his intention behind the invention at all. His intention might be serving his nation with a new technology or the welfare of the mankind. Thus, GNH only promotes resistance to cravings for wealth, not a craving for other non-economic achievement.
This is also true that we cannot avoid GDP totally as it has been counted for a long period of time and has some significance also. But if we take a deeper look, we will be able to figure out whether it is really serving its purpose. As GDP shows the economic health of a nation, looking at the GDP, economic-decision makers make policies and development planning (“GDP and Its Importance”). But does GDP portray the actual economic condition of a country?
The measurement of GDP does not include the production of the products that are not purchased. It doesn’t count if someone grows his own food, but if someone likes to watch TV and buys one, GDP would count that (“Macroeconomics”). Moreover, even if GDP shows economic development, sometime it underestimates it too. The reason is it does not count the income gained from the black market (Pettinger). A number of nations earn much money through black markets, but still they might show a lower GDP, which misrepresents the economy of those nations.
Also GDP is submissive to oligarchy. For example, South Africa is in top 40 countries that have higher GDP, but 50% of the population in this country lives in poverty (“Three Limitations”). Thus, higher percentage of GDP is actually owned by a smaller but powerful group in this country. The greater number of people in poverty might not be able to access different infrastructure, which is important for economic development, but GDP is not used to improve that (Pettinger). So, GDP cannot actually represent the original living standard of nation’s population. Finally, GDP overvalues negative externalities. This is the bad effects that occur when consumption of production increases. When GDP increases, negative externalities, like air pollution and water pollution, increase too (“Three Limitations”). Living in a polluted environment affects the health of the people badly and we cannot expect development from a nation having an unhealthy population, no matter how high the GDP is of that nation.
All the reasons stated above indicate that the measurement of GDP does not serve the purposes it is supposed to serve; the purposes for which it is given so much importance. So, why GDP is worthy of measurement? And why should it not be replaced by GNH?
The world is full of sufferings that are generated from different cravings. We cannot heal all the sufferings even if we turn all the resources into consumable products because people’s craving is endless. At the same time, if the measurement of GNH is promoted everywhere, we will learn how to save ourselves from the craving that will lessen our suffering. Thus, according to Tibetan Buddhist analogy, we will learn to make shoes to save our feet from the thrones of the world rather than paving the whole ground. Paving the ground is a stupid attempt taken by “our collective technological and economic project” in effort to make us happy (Loy 6). In conclusion, making the measurement of GNH prevalent everywhere will bring happiness and equality and a world like this is indeed a better place to live in.
Loy, David R. “Buddhism and Poverty.” (n.d.): n. pag. Rpt. in Global Justice Course Packet. N.p.: n.p., n.d. Print.
Revkin, Andrew C. “A New Measure of Well-Being From a Happy Little Kingdom.” (n.d.): n. pag. Rpt. in Global Justice Course Packet. N.p.: n.p., n.d. Print.
Dickinson, Elizabeth. “GDP: a brief history”. ForeignPolicy.com. Retrieved 10 December 2012.
Smith, Lisa. “High GDP Means Economic Prosperity, Or Does It?” Investopedia. Investopedia US, A Division of ValueClick, Inc., 20 Dec. 2009. Web. 13 Dec. 2012. <http://www.investopedia.com/articles/economics/08/genuine-progress-indicator-gpi.asp>.
“BHUTAN GNH INDEX.” Gross National Happiness. Centre For Bhutan Studies, n.d. Web. 07 Dec. 2012. <http://www.grossnationalhappiness.com/articles/>.
“GDP and Its Importance.” Flame Knowledge Center Gdp_importance. IIFL, n.d. Web. 13 Dec. 2012. <http://flame.org.in/knowledgecenter/gdp_importance.aspx>
“Macroeconomics – Limitations of GDP and Alternative Measures.” Investopedia. Investopedia US, A Division of ValueClick, Inc., n.d. Web. 13 Dec. 2012. <http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/limitations-gdp-alternative.asp>.
“Three Limitations of Using GDP as a Measure of Welfare Between Countries.” Dalias Economic Blog. N.p., 25 Apr. 2010. Web. 13 Dec. 2012. <http://daliaeconblog.wordpress.com/2010/04/25/three-limitations-of-using-gdp-as-a-measure-of-welfare-between-countries/>
Pettinger, Tejvan. “Does GDP Measure Economic Development?” Economics Help. N.p., 24 May 2007. Web. 17 Dec. 2012.