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

Life’s Fleeting Moments

Why is that sunrises and sunsets are often so captivating and moving? Perhaps it’s the uniqueness of the colors blending and merging together to form a painting-like setting that can’t be reproduced elsewhere. Maybe it’s the sense of satisfaction that comes from seeing a new day born or see the old day fade to its end. However, I tend to think the beauty of these happenings lies in another part of its overall appeal.

While some aspects of sunrises and sunsets bring a lot of beauty and perspective to life, I think the main reason why sunrises, sunsets, and even the random rainbow appeal to the human psyche is because these events represent fleeting moments that last for only a few seconds or minutes. They are impermanent, awe-inspiring, and hard to experience often. Sunrises and sunsets are ephemeral events that can be easy to miss and require one’s full attention to really appreciate them.

These sunrise and sunset events are what I like to call ‘fleeting moments’ and they are truly special. I say this because they do not last, and they require you to really pay attention and let your distractions float away. You have to be in the moment and that is increasingly difficult for most people to do nowadays. We are constantly bombarded by sensory overload that is often man-made and unnatural. Advertisements, loud noises, screeching vehicles, bumps in the roads we drive, these can cause us to lose sight of what’s truly important in life. Taking measure every now and then of why these fleeting moments are important to experience not only reminds us of the beauty of life but also how impermanent our time here really is. When you compare the fleeting moments of life to the routine moments in life, it really is no contest to as to which kind of moment is the preferred option to experience in full.

Categorically, the rewards of these fleeting moments are among the best in life because we all know that they are not common. Among the daily monotony and chores that encompass our routines, taking a few moments to appreciate being alive and being at peace are really what we all should be striving for even if these moments are fleeting. The fleeting moments are hard to capture but when you do, they bring the most joy and happiness that you can possibly have. As I mentioned in a previous article, there is a rule of diminishing marginal returns that we should be aware of and that’s why the more common we experience certain things in life, the less we really value them.

It’s quite a paradox when you think about it. The most enjoyable moments in life are the ones that we cannot plan for or anticipate, but that is part of the beauty of life and of living. Going back to my sunrise and sunset example, if they happened every hour instead of every day, that would be boring, right? You would probably start yawning after the fourth sunrise and the third sunset. Fleeting moments are special inherently because they are temporary, and you may not be able to enjoy them forever. Fleeting moments can also be part of your daily routine but ones that can only last a few seconds or a few minutes.

For some of us, it could be the first sip of a fresh cup of coffee at the beginning of the day or for others, it could be a hot shower after a long day of hiking. We know that the 2nd or 3rd cup of coffee like the 2nd or 3rd shower would not be as pleasurable or as enjoyable because then it becomes routine and our mind adjusts to it happening. However, the fleeting moment when your lips touch the coffee or when your face is enveloped with shower water, then it’s almost pure ecstasy for your body and mind. While these moments are definitely fleeting, they are the most enjoyable. Keeping them as part of your routine is important so that you will feel better both mentally and physically.

What we should all keep in mind is how to maximize the most enjoyment from these temporary moments because we know they don’t come around every minute or every hour of each day. My thinking on this is to really put all distractions away for those moments so you can be living fully and freely. When you are having a nice dinner with friends, make a habit to engage yourself in the conversation rather than daydream about what you’re doing afterwards. When you are watching the sun rise or set, put the phone away and just watch the colors merge together to form the painting-like canvas. Let your stress and worries melt away as much as possible to really enjoy these moments. There are so many distractions out there, but your sense of contentedness will be much higher if you are able to have the willpower yourself to be in the here and now wherever that may lead you.

Laughter among friends, patting a baby’s back, a spontaneous rainbow, a beautiful vista after a long climb, holding the hands of a beloved family member, these are the moments you want to remember throughout life. They are fleeting in length and a small amount of sand in the hourglass known as one’s lifespan, but they are precious and powerful. If you can take the time to work, to play, to sleep, to eat, then you can take the time to live in the moment and appreciate beauty and joy when it comes your way.

Being able to live fully by being in the moment will set you on a path of fewer regrets the further you go through life. Letting yourself experience moments of happiness and joy without distraction or worries will improve your well-being. It is a conscious effort to stay in the moment, but the rewards are well worth it. If you have to meditate, exercise, or even do yoga to help yourself stay present, then do so but don’t let life’s fleeting moments pass you by.

The Rule of Diminishing Marginal Return

There is a well-known law in economics called the ‘Law of Diminishing Marginal Utility’, which states that as consumption of a good or service increases per unit, the satisfaction derived from consuming an additional unit or more will lead to a subsequent decline in its overall utility. In other words, the more you consume, the less satisfied you will be with each additional product or service you purchase. The first thing you buy, use, or consume will be the most satisfying but the 2nd, 3rd, or 4th unit of the same item you utilize will not be as useful and could even not satisfy you at all.

This fundamental law in basic economics is one that is worth memorizing because it makes total sense. The first chocolate bar you consume will be delicious and fulfilling. You may not be satisfied with just one chocolate bar so you may end up eating another one since the first one was so tasty. However, anyone will tell you that the 2nd chocolate bar will not be as tasty or satisfying as the 1st one and you may even end up with a stomachache from eating too much chocolate if you are not careful.

The ‘Law of Diminishing Marginal Utility’ does not just apply to economic principles but goes far beyond that in terms of being applied to human psychology. The act of consumption, I would argue, is not just an economic one but also applies to the psychology of choice and how we live our lives. Everybody is a consumer in one way or another whether it’s the air we breathe, the water we drink, or the food we eat each day. Without any consumption, we would not survive but it is our choices that define our consumption habits and how we behave not just as economic actors but as human beings.

In a psychological context, instead of calling it the ‘Law of Diminishing Marginal Utility’, I would refer to it as the ‘Rule of Diminishing Marginal Return’, which is similar but discussing more how it’s a rule of life that the more we buy of something, the less return on that investment we will get out of it. The first of something whether that’s the purchase of a new car, a first trip to a new country, or the first time you try a new cuisine. These experiences will captivate you and do its job of putting your happiness level to a 9 or 10, but it’s a rule of life that it won’t stay there. While the memory of that experience will provide you with satisfaction and joy in its remembrance, your psychological state will revert to the norm of being level in terms of happiness or satisfaction with life. You may try to buy or consume more of something to recapture that feeling of happiness but that would actually be counterproductive in the long run and actually create false expectations compared to the first time you purchased or consumed that activity, experience, food, or drink.

How do you avoid the marginal returns of consuming, buying, or eating too much? Well, that is not easy to do but that is part of being a mature and responsible adult. You must have enough willpower and be able to reason with yourself that one more plate of food, one more drink, or one more car will not do the trick in giving you happiness. You must realize that your base level of happiness as a person won’t change as a result of consuming more and it may end up backfiring by causing your satisfaction to be lower because you consumed too much in the first place.
Being able to limit your consumption and controlling your vices will make you better off. If you can master your desires or your urges, then you can focus on bettering yourself or making you happier through more sustainable means. If you are working on personal projects, devoting yourself to a volunteer cause, or working on improving yourself mentally and/or physically, that kind of satisfaction will have a higher return on investment than just mindless consumption.

Consumption of goods and services may spike your happiness and satisfaction levels in the short run, but that kind of joy is short-lived and can often feel isolating if you are not sharing in that joy with others. That is why a meal with friends or family is often much better than eating by yourself. It’s why travelling with a close friend will generate more memories than a trip by yourself. It is not wrong to sometimes treat yourself to a nice meal, a nice trip, or a new gadget but shared experiences will make you happier and create more memories than those times that you were on your own in consuming.

One should carefully watch what they consume and monitor how much per day, per week, per month, and even per month they are consuming whether that’s food, drink, goods, etc. Everything in moderation is a good way to be as an adult and if you want to abstain entirely from consuming something, then that is an admirable thing to do as well. The worst thing you would want to do is to become overindulgent or overly reliant on a consumable good to make you happy or give you long-term satisfaction in life. You know better than anyone else the limits of your consumption and that true happiness is derived through shared experiences in life and of challenging yourself to be a better and more developed person.

In the long-term, I believe you get increased rather than diminished return through producing instead of consuming, by challenging yourself mentally and physically, and sharing yourself with others whether that’s through a good meal, a volunteer experience, or a worthwhile group project. All the chocolate and ice cream in the world won’t add to your happiness but would rather detract from it. A bowl of ice cream or a chocolate bar will satisfy you for a few hours, but you eventually will be back to that same level of happiness homeostasis that you had previously.

Instead of looking to keep yourself content or happy all of the time, know that happiness is not everything in life and that you benefit more from the hard work and the struggle that you put yourself on a daily basis than of just sitting on the couch and eating ice cream until the end of time.

When you get to that 2nd or 3rd bowl of ice cream, you should realize that you’re starting to get a stomachache and that you should stop yourself before you get sick. The diminishing marginal return of trying to seek out happiness through ice cream should be counteracted by getting off the couch and into the gym to start working out those extra calories you just gained.

By embracing the struggle of a gym workout and burning off all that ice cream, you’ll be sacrificing that short-term happiness for that long-term struggle but eventual satisfaction of improving yourself physically as a person and making yourself happier and healthier in the long-run as a direct result of your choices and decision-making. You should not be afraid to indulge a little bit every now and then but remember that life is better experienced in moderation and you should always watch what choices you are making as you go through your life as both a consumer and a producer.

The Importance of Community

“Be part of a group. Life is better that way.”

“Being apart of a community is what makes you happy…not rising to the top and sequestering yourself from community.” This quote is from one of my favorite podcasts, “Tangentially Speaking” with Dr. Christopher Ryan. During this show, he conducted an interview with travel host and producer, Jonathan Legg of ‘The Road Less Traveled’ who is the author of the quote above. I was listening to the podcast while I was driving through my hometown when the subject of ‘community’ came to the forefront of their interview. The two of them, who are both very intelligent and worldly men, explained to the listeners how chasing money, fame, and fortune doesn’t ultimately make us happy as human beings.

I absolutely agree with this assessment made on the podcast and believe that while possessions, money, and owning property can create happiness in the short-term, long-term happiness and fulfillment can only come from strong bonds with your friends, family, and community. Dr. Ryan and Mr. Legg also mentioned in one segment of the podcast how isolating oneself while traveling, and staying in hotels does not create a great life experience. I couldn’t agree more having stayed in nice hotels, hostels, and guesthouses during my own travels.

While one could be very comfortable and relaxed in a hotel, you won’t meet other travelers and potential friends as easily compared to when you’re staying in a cheaper hostel that’s in the city center. Dr. Ryan and Mr. Legg concluded in their discussion on communal living that the best way to live is to have your own space to eat and sleep, but to live in close enough proximity to others nearby that you can still have a sense of community and sharing without being isolated. I believe that compared to recent generations and even further back, the idea of community is starting to weaken and become less important which is in direct contrast to human nature and true happiness.

Harvard Political Scientist and Professor, Robert D. Putnam, was one of the first people to bring to national attention the change and decline in communities with his book, “Bowling Alone: The Collapse and Revival of American Community.” He makes the argument that people have been interacting with each other less and less over the past few decades. Instead of going out to socialize in public through bowling leagues, picnics, sport clubs, religious organizations, etc., more and more people are opting out and have been expanding the amount of time spent using technology as a substitute.

With the ability to have groceries, electronics, books, restaurant food, etc. delivered right to one’s doorstep in major cities and towns now, people have less and less motivation to leave the house. Telecommuting and ‘working from home’ have become more popular as well making ‘office work’ and ‘happy hours’ less obligatory. Social and traditional forms of media have exploded in the sheer amount of offerings whether its’ through websites, TV channels, and/or digital gadgets.

When it comes to community life, religious and social organizations have often formed the backbone and glue that holds people together. However, many different news media outlets have reported that attendance at churches and synagogues have been taking a downward spiral. A growing percentage of Americans are identifying themselves as ‘atheist’ or ‘agnostic’ when it comes to their religious beliefs. Personally, I have no problem with our generation being an irreligious one but I do think it’s tough to replicate that type of community within other types of social organizations.

In addition to the close bonds between neighbors that shared religious beliefs can bring, it can provide a sense of belonging just like many other social groups. Beyond religious affiliated groups, membership in long-standing organizations such as the Boy Scouts and other volunteer organizations is also on the decline as well.

Newsweek.com highlighted this trend illustrated this disturbing trend with official numbers from the Bureau of Labor Statistics: “In recent years, the percentage of Americans volunteering has dwindled and is now at its lowest level in a decade. Last year, In 2014, the official volunteer rate was 25.4 percent, or 62.6 million people, compared with 29 percent of the population in 2003, according to the U.S. Bureau of Labor Statistics. (Official statistics on volunteer rates go back only to 2002.)”

Recently, one of the pillars of my community that I was born into and grew up with shuttered its’ doors last year. My local synagogue where I was Bar Mitzvah’d, went to Shabbat services, and celebrated the Jewish holidays was not able to fund itself due to overall lack of membership and decided to merge with another still functional congregation. This was disappointing for me to hear about because I have a lot of fond memories of that place and the people I met there. It was more than just about religion but it was also a gathering place for Jewish residents of the local area to come together and get to know one each other better and form bonds of friendship. While members of the former synagogue have moved on to another synagogue nearby, it’s not the same as it once was and it’s difficult to integrate oneself into a new community.

This is a trend that seems to be replicating itself across the country. Most Americans don’t know their neighbor next door like they used to and beyond the local school PTA of the local town or city, there’s not much anymore to bring people together. The increasing atomization and isolation of people is worrying for me to hear about. However, I am quite positive about the power and spread of the internet to bring people from different backgrounds and beliefs all over the world together.

While it’s not perfect, you can still remain connected to old friends, former classmates, past roommates, etc. through social networking. Instead of bowling leagues, sports clubs, the local YMCA, now we have Meetup.com and Groupspaces. As technology continues to advance, the meaning of ‘community’ will continue to change and adapt to the times. However, we as human beings must not forget the importance of being apart of a community and how much it means to our mental health and overall happiness.

References:

http://www.saddleback.edu/faculty/agordon/documents/Bowling_Alone.pdf

http://www.newsweek.com/2014/10/03/volunteering-america-decline-272675.html

http://www.reuters.com/article/2015/01/17/us-usa-boyscouts-idUSKBN0KQ05O20150117