Beyond the Bailout: Measure What We Really Want

By David Korten | Website

Reprinted from  "Sustainable Happiness," the Winter 2009 YES! Magazine
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The only legitimate function of an economic system
is to serve life. At present, however, we assess economic performance
solely against financial indicators—gross domestic product (GDP) and
stock prices—while disregarding social and environmental consequences.
We are now paying the price for years of managing the economy for
financial performance, which translates into making money for people
who have money—that is, making rich people richer. It was not a wise
choice. We now bear the devastating costs of this foolishness in the
form of massive social and environmental damage and financial

This would be a good time to
start evaluating economic performance against indicators of what we
really want—healthy children, families, communities, and natural
systems. This would place life values ahead of money values and
dramatically reframe the public policy side of our economic
decision-making. Happiness, by the way, is an important indicator of
physical and psychological health.

We might
well continue to track GDP, a measure of economic throughput, as a
quite useful indicator of the economic cost of producing a given level
of health and well-being. When we recognize that GDP represents cost,
not gain, it becomes clear why making it grow is a mistake. A number of
researchers have been pointing out that happiness, as well as other
indicators of human, social, and environmental health, have been
declining even as GDP increased, but their appeals have been largely
ignored. We continue to manage our economies to maximize the cost,
rather than the benefit, of economic activity. The shock of financial
collapse creates an opportunity to draw attention to this substantial
anomaly. We will know we have turned an important corner when business
news reporters happily announce, “It has been a successful quarter.
Happiness rose by two points and GDP is down by one point.”