Bookmark and ShareJuliet Michaelson is a researcher at nef‘s centre for well-being.

A letter to the Financial Times, 30 January 2009.

Sir, As John Thornhill notes (“A measure remodelled”, January 28), those such as Simon Kuznets who developed the modern measure of gross domestic product were explicit that it should not be used as an indicator of social progress. More than 60 years on, in a classic example of mission creep, GDP remains the de facto measure of national success and is used as the standard against which virtually all macro-level policy decisions are judged. The consequences of this obsession with economic growth are clear: a financial system disconnected from the real economy, unsustainable levels of debt and intolerable strain placed on the planet by our high-consuming lifestyles.

The new economics foundation has long called for governments to establish national accounts of subjective well-being – systematic measures of how people think and feel about their lives. In a report launched last weekend, we provided the first ever detailed proposal for how they could be structured and implemented – see www.nationalaccountsofwellbeing.org

An approach endorsed by, among others, Enrico Giovannini, the Organisation for Economic Co-operation and Development’s chief statistician, and Prof Daniel Kahneman, the economics Nobel laureate, national well-being accounts provide a direct measure of meaningful outcomes in people’s lives.

By enabling policymakers to understand the real impact of their actions on people’s experience, such accounts would reconnect government with its core purpose: improving the lot of the people it serves. It is a reconnection that must be swiftly expedited. As we enter uncharted territory it is clear that we need a better compass to guide us; National Accounts of Well-being would be a significant step in the right direction.

Juliet Michaelson
Sam Thompson
Centre for Well-being,
nef (new economics foundation),
London SE11, UK


See also: Reuters, ‘On wealth versus well-being’

Advertisements