You are currently browsing the tag archive for the ‘progress’ tag.

Bookmark and ShareAndrew Simms is nef‘s Policy Director and head of nef’s Climate Change programme.

We may be in the grip of the worst economic upheaval for half a century, but the UK is still at heart a forward-looking, modern economy, isn’t it? Smogs and satanic mills are things of the past and we have a model that is resource-light and service driven, don’t we?

Perhaps not. In the UK for the first quarter of this year, £1 in every £4 paid in dividends to shareholders came from a single industry: oil and gas. And, from that sector, just two companies – BP and Shell – accounted for the vast majority.

If the banking crisis taught us one thing, it is that putting too many of your economic eggs in one sector’s basket is a very bad idea. In banking it was a bad idea because they practised Narnia-nomics (which is probably a slur on Narnia). With the oil and gas sector it is a bad idea for two reasons, which may seem contradictory: the products are both very damaging and have no long-term future. Unfortunately, however, there’s still enough oil and gas left to cause more damage than the planet can handle (and an awful lot of coal, which people may turn to as the other fossil fuels become more expensive and harder to get).

Where the damage is concerned emissions continue to drive the loss of a climate system conducive to stable, flourishing societies. A combination of steadily rising greenhouse gas concentrations and temperatures suggest that in around 78 months we will enter a new, more dangerous category of risk for creeping climatic instability, reason enough perhaps, to disinvest in fossil fuels.

The second reason is that an economy so hard-wired to the oil and gas sector is hitching its future to a long-term loser. We are already decades past the point of peak global oil discoveries, and on the cusp of the peak of oil production.

A new assessment of 14 forecasts of global oil supply underlines how the short-lived empire of oil is already well into its dotage, with the end in sight during our own lifetimes.

Some speculate that the moment at which production levels-off and begins its inexorable decline is already with us. If so, it may be only the recession, which temporarily reduces demand, that is hiding it. Several more forecasts suggest it will happen over the course of this decade – mere seconds away in the calibration of economic planning. Crucially, the study concluded that no credible forecast could put the date more than 20 years away.

Expect to see repeats of BP’s disaster at its Deepwater Horizon rig as companies seek to extend their lives of by exploiting ever-more marginal and hard-to-get reserves. Accidents happen when limits get pushed and an industry becomes increasingly desperate.

While companies like Shell, BP and Exxon may dominate the current economic landscape like leviathans, it is a feature of the end of empires that they seem permanent (especially from within) until, suddenly, they are gone.

All the more important, then, to plan for the inevitable. This is starting to happen. As the peak, plateau and decline of oil production approaches, its price will rise dramatically. Companies that are heavily exposed or, in other words, dependent on the old oil economy, will be at risk. Thinking back to the oil price spike of 2008, the ratings agency Fitch recently reassessed a range of industrial sectors for how vulnerable they will be when oil again knocks on the door of $150 per barrel. Airlines, trucking, chemicals and various consumer goods sectors look to be in big trouble. But railways and renewable energy cash-in.

It’s not just the coasts of the Gulf of Mexico that have fallen victim to our economic dependence on oil, its the climate that we depend on, for example, to grow our food, and will soon also be huge chunks of the economy.

The quicker we arrange a separation between society, the economy and the oil and gas sector, the better. This era-defining problem falls on the watch of the new coalition government. They could start by substantially capitalising the proposed new green investment bank and turning the taxpayer-owned Royal Bank of Scotland – that once proudly called itself the “oil and gas bank” and is still up to its neck in fossil-fuel financing – into a Royal Bank of Sustainability. More or less we have just the lifetime of this parliament to get money out of oil and into renewables and low-energy infrastructure.

After the bank bailout, we were left with the question, “where did the money go?”. At least if we put our resources into the great transition away from fossil fuels there would be tangible results. We would be looking at a great wave of new employment opportunities, more energy security, a less vulnerable economy and the chance for a better future.

78 months and counting …

Bookmark and ShareAndy Wimbush is nef‘s Communications Assistant and blogmaster.

“A map of the world that does not include Utopia,” wrote Oscar Wilde, “is not worth even glancing at, for it leaves out the one country at which Humanity is always landing. And when Humanity lands there, it looks out, and, seeing a better country, sets sail. Progress is the realisation of Utopias.”

A map of Thomas Mores Utopia

A map from Thomas More's Utopia

“Progress is the realisation of Utopias.” Can you imagine Peter Mandelson saying that to the CBI? Would Gordon Brown produce such a quip at the World Economic Forum? Even Barack Obama might have problems with this level of political lyricism. Progress might be the realisation of ambition, enterprise, or even dreams, but not utopias.

Utopianism tends to be a pejorative term these days. It’s associated with religious and political myths which we now might find naive and old-fashioned: be it the New Jerusalem of Christianity or the promised revolution of Marxism. The quotation from Wilde comes from his 1891 essay ‘The Soul of Man Under Socialism‘, a political polemic with a curiously evangelical and redemptive tone.

We’ve witnessed too many failed or dangerous utopias to be taken in by such rhetoric anymore. How many of the 20th century’s worst atrocities started with a vision of a perfected world? And even when they haven’t ended in totalitarianism, utopian mindsets have collided with the wall of reality sooner or later. The global financial crisis of the last eighteen months has put paid to the neoliberal belief that history “ended” with the rise of free market capitalism.

Today we’re inclined to agree with the political philosopher John Gray, who writes that  “utopia is the projection into the future of a  model of a society that cannot be realized.”

And yet, somehow, I still have some sympathy with Wilde’s vision. Even once we accept the danger of utopianism and see through its mirages, we still need to chart a course for our societies to follow. We will always need some sort of compass to guide us.

The sociologist Stephen Lukes came up with the idea of a ‘concrete utopia’. Unlike John Gray’s definition, the concrete utopia is based on ‘the knowledge of a self-transforming present, not an ideal future’.

There is no doubt that we are currently in a ‘self-transforming present’. Thanks to a century and a half of industrialisation powered by fossil fuels, the world’s climate is changing – not somewhere else or at a future date, but right here, right now. The biggest economic crisis since the Great Depression has shaken all economic and political orthodoxies. And as inequality has risen in developing countries, so too has social instability and unrest. If we do nothing about these things, the present will transform itself for the worse. nef has calculated the costs of carrying on with ‘business-as-usual’ until 2050: the UK will be faced with a £1.6 to £2.5 trillion bill for climate change, and a  £4.5 trillion bill for social problems arising from income inequality.

In order to steer clear of these threats, we’ll need something like a concrete utopia. Our new report The Great Transition attempts to put in place some clear steps towards the kind of economy which works for people and the planet. The Great Transition is undoubtedly utopian in spirit: we call it ‘the tale of how things turned out right’. But its recommendations are based right here in the present moment. There are things we can do immediately to tackle climate change, restore economic stability and create a more equal human settlement.

For the concrete utopian, it isn’t enough just to draw utopia onto Wilde’s map. First, you have to do some scouting, to see if that country actually exists, to glimpse its shores, even from afar. At nef, we’ve been able to do so through the vast array of practical projects we’ve been involved with over the years. Timebanking, complementary currencies, new methods of participation and democracy, Transition Towns, our BizFizz project for budding entrepreneurs, co-productive public services and barter economies all constitute, as we said in our pamphlet From the Ashes of the Crash, part of a ‘sleeping architecture of a new, diverse and resilient local financial system’, human-scale and low-carbon. And it’s on these foundations that we’ll start to build our concrete utopia.

If you’d like to glimpse the beginnings of the Great Transition, and help make it a reality, make sure you head along to The Bigger Picture: Festival of Interdependence, this Saturday 24 October, at the Bargehouse, South Bank, London.

of a new, diverse and resilient local financial system

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

This article first appeared at Policy Innovations.

A sunset in Costa Rica, the nation that topped the Happy Planet Index 2.0. | Image by Alexander Steffler

A sunset in Costa Rica, the nation that topped the Happy Planet Index 2.0. | Image by Alexander Steffler

Governments around the world are caught between the proverbial rock and a hard place: We are now nearly two years into what is widely heralded as the worst global economic crisis since the Great Depression, and the ecological crisis of global warming threatens the foundations of human civilization. Should countries stimulate their economies at any cost? How should they prioritize the health of global and local ecosystems? The debates about whether government money should be used to shore up struggling car industries neatly encapsulate these sorts of dilemmas.

Many in government may feel that the best overall path is far from clear. Part of the problem is that they lack tools for making these sorts of policy decisions. The common yardstick since the 1940s has been GDP growth. Gross Domestic Product reflected the wartime concern with increasing economic productivity, and since then it has become synonymous with progress. As the United Kingdom’s Sustainable Development Commission notes, “The state has become caught up in a belief that growth should trump all other policy goals.”

Yet intrinsic to growing GDP is the need to produce more stuff. This is exactly what our planet cannot sustain. More stuff requires more of the Earth’s dwindling fossil energy supplies, with waste products that threaten the climate.

The kernel of the solution to resolving these competing demands lies within the structure of the problem itself. The fact that economic growth can be conceived of in opposition to the health of the planet suggests that neither can claim to be regarded as the true overall measure of success in human society. A much more convincing case is made by the concept of well-being. The experience of well-being is about feeling that your life is going well, something which is universally important to people everywhere. The concept of well-being enables us to define the ultimate aim of human endeavor to be healthy, happy, and meaningful lives.

The Earth’s resources are the fundamental input to this system. A well-regulated economy is just one means to produce well-being—along with others including community, technology, values, and governance. Systems thinking also shows us that using planetary resources so that they can be sustained into the future is vital to ensuring that human well-being can also be maintained in the long term.

The updated Happy Planet Index (HPI), published last month by nef (the new economics foundation), uses this view of society to formulate an indicator of overall progress. Scores on the HPI represent the amount of human well-being a country produces relative to its resource use. It is measured in terms of long and happy lives. The HPI is thus an efficiency index, measuring how much well-being is achieved per unit of environmental impact:

HPI ≈ (Life expectancy x Life satisfaction) / Ecological footprint

Read the rest of this entry »

Bookmark and ShareSaamah Abdallah is a researcher at nef‘s Centre for Well-being.

Palazzo Strozzi

The Palazzo Strozzi in Florence was once home to a Renaissance banking dynasty. But last week it provided a setting for a conversation about how we can re-define progress beyond simply measuring national product.

International meetings of statisticians are hardly the most likely place for one to find passion and drama. Yet, in the Palazzo Strozzi in Florence, home to one of the major banking families of the 13th century, Juliet Michaelson and I took part in a debate which could be changing how we measure progress.

When nef started advocating subjective measures of well-being – i.e. asking people how they feel their life is going – as a tool to guide policy, we were entering almost virgin territory. But it seems that the world of government statistics has started to catch up with projects such as our Happy Planet Index. Subjective well-being is part of official statistics in several countries including New Zealand, Canada and even the UK. nef is currently advising Eurostat, the EU’s official statistics body on the feasibility of including well-being indicators in their official sets. And the OECD is the unlikely home of a major Global Project on Measuring the Progress of Societies, championed until now by the organisation’s Chief Statistician, Enrico Giovannini.

It was the OECD that arranged the meeting aimed to encourage chief national statisticians to take subjective well-being measurement seriously. Chief statisticians and presidents from the statistics offices of the USA, Canada, Ireland, Spain and many other countries were present. The meeting was timed to follow on the heels of the ninth annual conference of the International Society for Quality of Life Studies (ISQOLS), ensuring many of the leading academics working on subjective well-being were also present.

The meeting showed that there was still work to be done. Many statisticians recognise that measuring subjective well-being is a central part of informing governments how well they are doing. They also see the benefits that subjective data provide in terms of understanding other areas. For example, well-being data can tell you something about the impacts of high or low social capital in an area. Academics such as Prof. John Heliwell at the University of British Columbia in Canada made a plea for statisticians to include a few subjective well-being questions in as many different surveys as possible. Meanwhile nef, alongside Prof. Felicia Huppert at the University of Cambridge, called for more textured measures of well-being, such as the National Accounts of Well-Being, so as to provide policy makers with a better understanding of the ways in which the nation’s population is doing well or not so well.

Some statisticians, howeever, were still very resistant to the idea of taking up precious ‘real estate’ on their surveys with questions about how people feel. They argue that they measure what they are told to, and that they are not being told to measure well-being. As Dr. Munir Sheikh, Chief Statistician of Statistics Canada put it, “It’s not my job to decide which data is more important. It’s the users.” Other statisticians disagreed, highlighting that statistics offices do have some flexibility to pre-empt data requests. Meanwhile, the academics argued that there is a chicken-and-egg situation: government bodies will not ask for well-being data until statistics offices collect it, and vice versa.

But, perhaps, for the sake of statisticians such as Dr. Sheikh, it is important that we make it clear that well-being is important. A recent UK poll found that 81% of people supported the idea that the Government’s prime objective should be the ‘greatest happiness’ rather than the ‘greatest wealth’. Given that’s the case, and given that statistics offices are public bodies whose duty it is to provide information to citizens on how our Government is faring, perhaps we all need to tell them just how much we’d like to know the state of well-being in our countries.

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


Today’s Financial Times includes a full page of analysis discussing the growing movement among economists and others towards producing alternative measures of economic performance and social progress. If you’ve already read our National Accounts of Well-being report , published last weekend, or looked at the accompanying website, much of the content will be familiar: the strong caution issued by Simon Kuznets, the designer of the original GDP measure, that it should not be used to infer the welfare of a nation; the perverse nature of the way GDP is calculated by mechanically counting productivity, so that spending on things like divorce proceedings is counted as a benefit; and the current work of the commission headed by Nobel-laureate economists Joseph Stiglitz and Amartya Sen to develop new measures to enable us to change “our political priorities and build happier, greener, societies”.

The article concludes by highlighting what it describes as “perhaps the most controversial issue” being examined by the commission, namely “whether to create some kind of ‘happiness index’ based on surveys of people’s attitudes”. What it doesn’t mention is that this is precisely what we have done in our work on National Accounts of Well-being. While we don’t claim that our indicators are the final word on how governments should measure people’s experiences of their lives, they certainly show how, by using high-quality survey data, robust and detailed measures of well-being are not only possible, but now a reality.

It remains to be seen what the Stiglitz-Sen commission will conclude when it reports in April. But crucially, to enable policy-makers to truly understand the impact of their actions on the reality of people’s lives, societies must start paying attention to the ways in which subjective well-being can be carefully and seriously measured. We think that our National Accounts of Well-being represent a substantial step forward along this path and our growing band of expert supporters suggests that many others are beginning to think so too.

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

park

What is the best way to measure whether a country is successful? For most of the last 100 years, we have tended to assume that the answer lies in observing the growth of headline economic indicators, such as GDP. Plenty of criticisms have been levelled at GDP – it is far too narrow a measure, takes no account of the distribution of resources or environmental costs, and so on. And recent events hammer home the point that chasing ever-increasing economic growth is a fool’s errand. Even Gordon Brown, since 1997 the de-facto Chief Financial Officer of UK PLC, has had to admit that there’s no such thing as boom without the bust.

Our new report, National Accounts of Well-being: bringing real wealth onto the balance sheet, published on Saturday, provides a different response to the question. It argues that the success of nations is best measured in terms of the things that really matter to the people who live in them: their experiences, feelings and perceptions of how their lives are going. In other words, their subjective well-being. After all, as British economist Andrew Oswald noted almost 30 years ago:

“Economic performance is not intrinsically interesting…People have no innate interest in the money supply, inflation, growth, inequality, unemployment…Economic things matter only in so far as they make people happier.”

What does matter to us, and is arguably the ultimate goal of all human endeavour, is that we feel good about ourselves and the people around us, and do things in our lives which give us a sense of meaning and value.

Of course, the current economic situation is going to seriously hurt a lot of people. But in the post-crash world, we need to ask ourselves whether we want to rebuild the system according to the same flawed blueprint, or find a better compass to guide us.

The first set of National Accounts of Well-being, which nef has produced for 22 countries across Europe, are a tangible means by which governments can monitor their progress in promoting the well-being of their citizens. Using the most comprehensive international survey data on subjective well-being ever collected, we have designed a framework of measures which describe a nuanced picture of people’s experiences. For example, as well as measuring whether people have good feelings, we also look at whether they undertake activities which are meaningful, engaging and which make them feel competent and autonomous. And alongside our first headline measure of personal well-being we also measure people’s social well-being  – whether they have supportive relationships and a sense of connection with others.

The results – which can be explored interactively on the website accompanying the report – show how far we still have to go when measuring success in these terms. While Denmark retains its oft-cited position with the highest well-being levels in Europe, Sweden, so often singled out to be praised for its policy success, does not feature among the top five countries on personal well-being. The UK’s performance according to the headline indicators is distinctly middling, and on the trust and belonging component of social well-being it comes a very poor 20th out of the 22 countries.

By redefining success in terms of how people actually experience their lives, National Accounts of Well-being set out a challenge for anyone interested in shaping the future of their society. But they also provide a crucial tool in efforts towards creating brighter tomorrows, in a classic illustration of one of nef‘s key principles: that measuring the things which matter is a crucial step in getting them to change.

So how quick will governments be to adopt these new measures of success? Given the growing political interest in well-being we’re optimistic that it won’t take too long. In the meantime, we’ll be keeping a close eye on the reaction to our proposal, and carrying on making the case that we should be measuring what matters most…

ABOUT

This blog is operated by nef (the new economics foundation).

Follow us on:
Vimeo
Twitter
Flickr

ARCHIVES

CATEGORIES

Put People First
Airplot - join the plot
nef employees blog in their personal capacity. The opinions expressed here do not necessarily reflect those of the new economics foundation.