Gross Domestic Product v. Gross National Happiness

“Most of us know what Gross Domestic Product (GDP) is having learned it at some point in high school or in college. The total value of all finished goods, products, and services produced within a country’s borders over a specific time period such as a quarter (three months) or a year. Economists commonly use GDP as a model for economic health when it comes to an individual country.”

Most of us know what Gross Domestic Product (GDP) is having learned it at some point in high school or in college. The total value of all finished goods, products, and services produced within a country’s borders over a specific time period such as a quarter (three months) or a year. Economists commonly use GDP as a model for economic health when it comes to an individual country. If GDP grows positively or increases over time, then generally you could assume that the economy is doing well or is at least maintaining its equilibrium. However, when the GDP of a country is declining or has been stagnant for multiple years, economists are likely to assume there is a problem of some sort.

There are economic terms related to Gross Domestic Product as a recession (two straight quarters of negative GDP growth) leading to an economy to contract rather than grow. We also know of an economic depression where an economy contracts for years and is often associated with double-digit negative growth and/or high unemployment, inflation rates. What is less talked about is how do we measure the health and well-being of citizens within a country’s borders.

What other measurement besides GDP could measure a country on a national scale? While GDP measures the economic health, the actually mental health of a country’s citizens has been measured by a little-known survey conducted by the small land-locked, mountainous country of Bhutan, which is a Buddhist kingdom that is located at the eastern part of the Himalaya mountains. This national survey is given out only every five years to the citizens of Bhutan, of which there are only 750,000 people living in the small country. Instead of a simple 0 to 10 survey on if you are happy on a scale, the survey is quite comprehensive in its questions.

The government of Bhutan asks over 300 questions in the survey and can take multiple hours to complete. Questions are compensated a day’s working wage to answer the questions and it strives to measure all forms of human capital and not just the economic capital measured by GDP. The survey has nine different domains, 33 social indicators, and hundreds of variables. The categories of the survey include education, health, culture, time use, psychological well-being, community development, environmental practices, and overall living standards. This GNH survey has become a cornerstone of Bhutan’s presence on the world stage and has gained notoriety since it was introduced in 1998 as a form of alternative human development.

About 8,000 households in Bhutan answer the survey every five years, which is conducted by the Centre for Bhutan Studies and GNH research. Questions can range from being general about prayer and/or meditation habits to being specific about if you ‘trust your neighbors’ to if you ‘fight with your family at all.’ The measuring of the country’s happiness began in 1972 when the fourth king of Bhutan, Jigme Singye Wangchuck, declared that the “Gross National Happiness is more important than gross domestic product” for the country.

Bhutan has seen numerous changes over almost fifty years since the movement towards measuring GNH began. The same king helped ensure a parliamentary democracy was established in 2008 with the constitution and political reforms putting him in a more ceremonial role. Bhutan has strived to actually use the survey to help improve certain aspects of the lives of its citizens such as having free education, health care, and getting electricity at no extra cost. Bhutan’s new democracy is messy like any young democracy would be, but Bhutan is known for attracting increased numbers of tourists before the COVID-19 pandemic began and for being largely self-sufficient in terms of food production and for being a peaceful, inwardly looking nation.

The concept of Gross National Happiness is related to the country’s prominent religion of Buddhism with the focus on being content with less, not being so concerned with materialism or economic gains, and to be calm, cool, and collected when facing life’s many challenges. Seeking harmony with one’s friends, family, and neighbors is also another key part of the GNH survey. Bhutan is a beautiful, land-locked country, which has provided its citizens with a number of basic needs such as education, health care, and peaceful relations with its neighbors with having a smaller GDP than many other nations.

The paradox of a country such as Bhutan is that it may be the only country to internally measure happiness in some formal way, but it still ranks in the median in terms of national happiness by outside surveys. Norway was ranked 1st by the United Nation in its 2020 World Happiness Report, which had a different format and questioning style than Bhutan’s, but for which is a relatively new kind of survey that Bhutan’s GNH survey helped to inspire. While Norway topped the list, Bhutan ranked 97th out of the 153 nations surveyed, which may not inspire much confidence, but the country does face ongoing challenges especially with its GDP.

Bhutan ranks as a ‘least developed’ country by the United Nations and is dealing with the effects of climate change, high income inequality, increasing youth unemployment, and an uncertain energy future due to the effects of environmental degradation. Bhutan’s GDP is only $2.2 billion and while material wealth and economic growth are not integral to the GNH survey, it likely has a role to play in affecting the happiness of its citizens.

The 2015 GNH Survey by Bhutan reported that “91.2% of people reported experiencing happiness, and 43.4% of people said that they are deeply happy.” From my reading of the survey, Bhutan is committed to improving the happiness of its people by having such an insightful and detailed survey and while their national happiness has room for improvement, they have taken that crucial first step to actually evaluating if its citizens are happy or not, which is quite unique when compared to other nations around the world.

The first step to solving the problem is realizing there is one. If a country focuses only on GDP as a measure not only for economic health but for the health of their citizens in other ways, then they are making a false dichotomy. Economies are naturally going to rise and fall in growth rates but the same can be said of people’s own happiness over time. The key is to first be aware of how happy people are by having a comprehensive yet accessible way to measure that elusive emotion as best as you can. Bhutan is a model for not seeing only its Gross Domestic Product as a sign of national progress.

Any nation can be wealthy and still be extremely unhappy and a nation can be poor but still be happy. The same could be also for a poor nation being unhappy as a rich nation being very happy. The key to 21st century economics will be to figure out how to find that balance between economic success and people’s happiness. You can have the average citizen make a lot of money and be considered a ‘success’ but what if the schools in their town are lousy, the health care is too expensive and of low quality, and the community is distrustful of one another.

Bhutan has taken the initiative as a country for seeing happiness as being an important part of a nation’s well-being, which can be measured in various ways. While their GDP is very small, they recognize that economic growth is not simply everything that a country should be known for. If you have a certain amount of money in the economy, where are you putting the national product towards? How will you know how to spend the money gained from your citizens through taxes without knowing what their grievances are and what they unhappy with?

Having Gross National Happiness be part of a country’s consciousness involves asking difficult yet necessary questions from the population on different aspects of their lives. Bhutan has taken that crucial step towards asking their citizens what they are happy with, what they are not happy with, and what could be improved in their lives. When you have that necessary information coming in, the government can then take steps to allocate the tax money and other revenue they have available to put it towards where its’ needed most. If government services need to be improved, they’ll know from their citizenry that it’s a priority. If living standards need to be improved such as providing more housing, better food, or less pollution, they will have that awareness from knowing more from the GNH data that they are receiving.

Lastly, a government like Bhutan’s can work closely with the parliament, civil servants, non-governmental organizations, and civil society leaders to take the survey’s results and work together on a common set of facts and figures to start to improve the country in needed areas where people are unhappy about. If other governments can learn from Bhutan when it comes to Gross National Happiness, it’s that it can be measured from your citizens in a comprehensive way and that each government can learn from its citizens how their people’s lives can be improved and in what ways beyond just how much money their people are producing each year.

Sources:

https://www.npr.org/sections/parallels/2018/02/12/584481047/the-birthplace-of-gross-national-happiness-is-growing-a-bit-cynical

https://www.grossnationalhappiness.com

https://www.happiness-report.s3.amazonaws.com/2020/WHR20.pdf

Book Recommendations – Volume XI

“There’s nothing better than sitting under your favorite tree in a backyard or out on the balcony with the sun in your face reading an engaging and enlightening book. As I have mentioned previously, Summer is the best season for reading and since a lot of other summer activities are postponed or cancelled, why not catch up on some reading?”

There’s nothing better than sitting under your favorite tree in a backyard or out on the balcony with the sun in your face reading an engaging and enlightening book. As I have mentioned previously, Summer is the best season for reading and since a lot of other summer activities are postponed or cancelled, why not catch up on some reading? Regardless if the book is fiction or non-fiction, spending a few hours each day reading a good book can make the time pass by quicker and get rid of any kind of twiddle-your-thumbs moments that can happen when you don’t have a movie, concert, or sporting event to distract you. While live events may be out of order this summer, your bookshelf is dying to have you open up a book, sit down on your favorite couch or chair, and let your mind wander to an imaginary or a real place to pass the time.

  1. The Back Channel: A Memoir of American Diplomacy and The Case for Its Renewal by William J. Burns

William J. Burns might be one of the best diplomats the United States has ever had. With over thirty years of experience and having served in two of the most important regions of the world, Mr. Burns’s story is an example of the good that diplomatic efforts can do in resolving conflicts, promoting peace, and ensuring cooperation among both allies and adversaries. He is one of only two career diplomats to have ever earned the title of ‘Deputy Secretary of State’ and he gave advice and counsel to five U.S. Presidents and ten Secretaries of State.

Mr. Burns’s storied career includes Ambassadorships to both Jordan and Russia and he held numerous Assistant Secretary positions within the State Department during his three-decade tenure. He was partly responsible for ceasefire agreements between the Israelis and the Palestinians, for helping to eliminate Libya’s nuclear weapons program, and for helping to reset U.S. relations with Russia in the early 2010s. He also shares insights in this book that were previously not publicly known involving his views on the Iraq War, the Civil War in Syria, and of the Russian aggression against Ukraine at the end of his tenure.

This 400+ page memoir is simply a must-read for anyone interested in how diplomacy works and how vital it is to maintain within a government’s foreign policy. In a time now where it has been underinvested and mismanaged, Burns’s book illuminates how big of a difference it can make and how one man’s impact can be felt throughout an entire foreign policy apparatus due to his vigorous study of culture, languages, and history in order for him to be taken seriously. The book is not only educational but is also gripping in terms of his recall of major events throughout his diplomatic career as well as the written cables that explain them. It is a real page turner and should be required reading for any student of international relations and who hopes to become a diplomat in their own future career.

2. On the Plain of Snakes: A Mexican Journey by Paul Theroux

Cooperation, friendship, and understanding is important among friends, but it is even more important among your neighbors. The US-Mexico relationship has been fraught with mistrust and tension especially during the years of the Trump administration. The best way to do away with stereotypes and misgivings about each other is to visit the lesser known places of a country and visit the non-touristy areas. Paul Theroux may be the best living American travel writer today.

From his experience as a Peace Corps volunteer in Malawi in the 1970s to his trek in the American Deep South, Paul Theroux has traveled around the world over five decades and counting. His latest novel about his travels in Mexico is a must-read for Americans and anyone else looking to understand Mexico from an outside lens. While not an exhaustive take on the complex country and its people, Theroux’s book, somewhat observant and otherwise felt like you’re in the middle of his travels is both illuminating and powerful.

Paul Theroux is really a true traveler and even though this is the first of his travel novels that I have read, this one felt very timely as it was released in 2019 during a time of souring relations between the two North American neighbors. Theroux spares no miles or kilometers in seeing all of Mexico that he can. From the desert Region of Sonora in the North to the Mexico mundo of Mexico City to the Southeast of the country where he visits the Zapatistas, this is an extremely educational look at modern Mexico.

Theroux’s book highlights the issues that Mexico is going through from immigration from the Northern Triangle to the ever-present threat of the drug cartels to the hopes of Mexico’s indigenous populations who believe that they have been left behind as other villages and towns hollowed out while the economic gains went elsewhere. It’s not just the issues that Theroux shines a lens on but also the beauty of the country’s culture and its warm people. As an elderly traveler, Theroux is treated with great respect and even reverence as ‘Don Pablo.’

He is welcomed as a guest, kept safe by complete strangers, and invited to interview Mexicans who normally would not talk to foreign travelers. Theroux travels all the way from Massachusetts across the border where few Americans are found to cross. He does so in his own car on his own dime and does not travel with any security or any kind of companionship. He learns Spanish and teaches writing to Mexican students. He is a refreshing kind of traveler, one who remembers to show people through a human lens and to not deal with harmful stereotypes.

Overall, ‘On the Plain of Snakes’ is an excellent travel novel for anyone interested in learning more about Mexico’s people, its culture, its struggles, and its hopes for a better future.

3. Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Our World by Michele J. Gelfand

This book has been my favorite one of 2020 and I only heard of it through a weekly David Brooks column in The New York Times Opinion section. The differences and similarities between cultures and societies is a topic that has fascinated me for years. As someone who has lived in both loose and tight countries as Mrs. Gelfand so brilliantly classifies, it is fascinating to see her extensive research come into fruition and how these loose and tight countries affect our outlook on everything from celebrations to driving to health care to tattoos.

Tight countries are cultures where norms are preserved and breaking them is frowned upon. Societal cohesion is encouraged and straying from norms is open to punishment. Loose countries are cultures where norms are often broken and breaking them usually comes with a shrug or a lack of care. Why do Germans always stop at a red light even when its 3 AM? Why do Brazilian clocks never run on time? Why do Japanese trains always run on time? Why do Singaporean laws ban gum from being chewed?

These tight and loose differences do not just extend to countries but also to states, cities, organizations, businesses and even within us. This book of ‘tight and loose’ norms highlights how we feel about any subject and how that is reflected in how we act with others. There is no right or wrong answer as to whether living in a tight culture is better or if living in a loose culture is better. Mrs. Gelfand excellently points out in each chapter how they both have their advantages and disadvantages depending upon the norm being considered.

Our upbringing, our environment, our country’s history, etc. all have effects on how ‘tight’ a culture is or how ‘loose’ a culture is. There can also be changes to a culture depending if there are big events like a terrorist attack, a pandemic, a natural disaster, etc. Cultures can tighten or loosen depending upon what is going on in the country and how people are being affected by these natural or manmade shifts to our lives.

Having seen both ‘tight cultures’ and ‘loose cultures’ up close and personal, this book has been a revelation to me in terms of explaining what I thought about only in my theories that I concocted after traveling from country to country but never really expressing it as well as she has in this great book. Mrs. Gelfand has done extensive research across many countries and continents to explain why some countries have more ‘rule makers’ and why other countries have ‘rule breakers.’ In order for our own cultures to shift from one spectrum to the other, we have to first understand why the country’s culture is the way it is and if it can shift, what benefits are there to tightening up or loosening up depending on what is going on in our lives and in our society at the time?