Category: WEGo in Practice

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climate change WEGo in Practice

Germany Moving Towards a ‘Wellbeing Economy Logic’?

The latest announcements that the new German Minister for the Economy and for the Climate, Robert Habeck, made in the run-up to the launch of the latest report on the German economy are very interesting — in many respects, he uses a vocabulary and terms that seem to come from the Wellbeing Economy school of thought.

The influential German weekly DER SPIEGEL reported on the new tone in the report, based on a draft that was circulated early:

The draft report states that “overall economic growth, measured in terms of growth in gross domestic product, is a necessary but by no means sufficient prerequisite for sustainable prosperity, employment, participation and social security”. For the first time, the German government will examine “complementary dimensions of material and immaterial prosperity as well as intergenerational sustainability” beyond gross domestic product (GDP).

And further down:

In addition, a “saturation with basic consumer goods” had been reached in the middle of society. Therefore, “a political promise of further and generally rising consumption levels cannot be made.”

In the center/conservative daily paper FAZ, a commentator says:

The Greens have long been at odds with the concept of basing the country’s well-being primarily on the value of domestically produced goods and services. As a consequence, they have negotiated a passage in the coalition agreement about a well-being report which is to be integrated in the annual economic report and “that covers not only economic but also ecological, social and societal dimensions of well-being”. A GDP framed green.

(Translations from German all mine.)

The actual report (German) that finally did come out has been toned down — most likely to accommodate the other two coalition parties that are not as progressive in their thinking about the economy. Overall, the report focuses less on a changed approach to running the economy, and much more on the climate crisis (which is still encouraging news, coming from a ministry that was in the hands of staunch fossil fuel defenders for decades). But I believe that the statements that were circulated beforehand are the real news that deserve our attention. Because that seems to be where Habeck’s heart is.

Today, the Wellbeing Economy Alliance have published a guest piece on their blog I have written. I am commenting on Habeck’s initiative from my point of view as a German, having spent most of my life surrounded by a society that was deeply marked by the unbridled adoration of GDP growth — no surprise there, Germany built its entire raison d’être around increasing the material output of its economy after the disaster of World War II and the Nazi era.

I personally hope that Habeck will get the support that he needs to see his vision through. If Germany adopted this way of thinking more broadly, it could produce a chain reaction in Europe and beyond.

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WEGo in Practice

New Members Joining the Wellbeing Economy Governments

As humanity is struggling with the Covid pandemic (and, in many parts, trying to get into a Christmas spirit, despite the virus), there is still some good news happening. Yesterday, the Finnish Government declared that it is joining the WEGo project:

“Joining the network will give us new opportunities to promote the economy of wellbeing approach, for example in the recovery from the COVID-19 crisis. This approach makes it possible to create a sustainable foundation for a just, equal, climate-friendly and competent society which is better equipped to respond to future crises and to overcome them more swiftly,” says Minister of Social Affairs and Health Aino-Kaisa Pekonen.

To us, it is incredibly exciting to witness the development of this alliance. We started following the project when it was nothing more than a visionary idea in the heads of a handful people who wanted to establish a different approach to running our economies.

We were there, at the end of 2018, when it was officially launched to the world, at an OECD conference in South Korea.

Today, a little over three years after the first small meeting was held at the University of Glasgow, to discuss an approach to economics that finally puts the wellbeing of people and planet at the core of economic policy development, five regional and national governments have publicly declared that this is the right one for them.

This does not mean that these governments abandon GDP as a key measurement tool in their work. Not yet. Finland cannot, actually: As a member of the Eurozone, Finland is committed to the Maastricht criteria, which indirectly leads to requirements for GDP growth. But if you carefully read the press release that’s linked above, you’ll see that it makes no reference to GDP growth. And that alone is saying something. It is a starting point.

Earlier this year, at the beginning of May, the Welsh Government became first new member after the alliance’s founding:

Covid-19 has dramatically changed our lives and will have a lasting and profound effect on all of us, on our economy, on our public services and on our communities. We cannot go back to business as normal, and need to plan for a Wales, shaped by the virus, that is more prosperous, more equal and greener, rooted in our commitment to social-economic and environmental justice. Last week, we joined the Well-being Economy Government (WEGo) Network and will be working with Scotland, Iceland and New Zealand – who all have a shared ambition to deliver and improve well-being through their economic approach.

Katherine Trebeck has been fighting for years for this alliance to come about, and to this day, she is part of countless conversations that are happening all around the world — as governments are beginning to rethink their approach to economic development, and slowly moving into a wellbeing economy logic.

I am truly excited that we will get to tell the story about some of the amazing people behind all this in our film.

Which will come out next year. Just bear with us. Still working on that edit. And will keep doing that for a little while longer …

A Christmas season that may be as merry as it can — to all those who celebrate it, and also to those who don’t or can’t. And all the best for a year 2021 to all of us — may it make things come true that we currently don’t even dare dream of yet.

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Introduction WEGo in Practice Wellbeing Economies: Concept

The Vision of Wellbeing Economies.

A couple weeks ago, I had to summarise the “Wellbeing Economies vision”, for an internal document that we needed. I am neither a scholar nor a practitioner of wellbeing economics, but I still felt that the exercise of writing down what I had understood in our project to be valuable. Clearing one’s thoughts by putting them into writing is often quite helpful. Here are the results. Interestingly, the real experts in the matter — the team at the Wellbeing Economy Alliance (WEAll) – also just happened to put out a document about the very same thing. I haven’t had the chance to read it yet. But it may be fun for some to contrast and compare.

The concept of Wellbeing Economies (WE) does not attempt to explain the world through a central foundational economic model, nor does it recommend a particular path for achieving its goals. Rather, it is essentially a very pragmatic approach that begins not with a “system”, but with the end goal: an economy that serves people and the planet as a whole.

Five central concerns are to be achieved:

  • Dignity: Everyone has enough to live in comfort, safety and happiness
  • Nature: A restored and safe natural world for all life
  • Connection: A sense of belonging and institutions that serve the common good
  • Fairness: Justice in all its dimensions at the heart of economic systems, and the gap between the richest and poorest greatly reduced
  • Participation: Citizens are actively engaged in their communities and locally rooted economies

One of the reasons why there is no central (mathematical) model for Wellbeing Economies is that advocates of the “Wellbeing Economy” idea embed economics deeply in the social sciences and reject a purely model-driven, number-oriented approach — which tries to give Economics a false semblance of a natural science.

Rather, they acknowledge that the very particular social science “economics” is about the question of how the earth’s resources are to be treated and allocated in the best possible way, in order to achieve the above goals. And while there is no question that mathematical skills are required for this, at the same time it is also necessary to recognize that philosophical questions about the meaning of life, normative ideas about law and justice, and an understanding of human irrationality, emotionality and spirituality are just as important. And they are all factors that have no or only a very limited place in the traditional data-driven approach to economics.

Even though this may not always be explicit, a foundation of WE seems to be that they start from a different view of humanity than capitalism of the neoliberal school does. The latter assumes that the central driver of all human activity is personal benefit maximization (greed), which must be put at the service of economic development. WE, on the contrary, see a number of different needs in people, which are expressed, above all, in our social and cooperative behaviour. In the current design of our economy which is essentially based on greed, these do not come into their own. It is now necessary to change this orientation, in order to give other central human qualities more justice in a our economic logic.

But in order for this to happen, it is fundamental to acknowledge that every economic system is man-made and can therefore be rebuilt or readjusted.

For this readjustment, the Wellbeing Economies see a particular need in redefining the key measures of success of our economic systems: politics and the economy are profoundly influenced by what is measured as success and recognized as desirable.

A core requirement is therefore to abandon the goal of continued economic growth in the sense of a steady increase in gross domestic product (GDP) and instead to define and measure the prosperity and progress of our world’s societies in new, different ways. It is acknowledged that GDP growth in the western world after the Second World War certainly helped increase prosperity and improve living standards. But the resulting obsession with steadily rising GDP is now seen as a central cause for our world becoming more and more unjust and dealing with nature in an completely destructive manner.

The fight against the apocalyptic climate crisis, which results from the unlimited growth of the carbon industry in the post-war economic growth logic, is a central motive for many to work towards Wellbeing Economies.

Politically, Wellbeing Economists are therefore trying to convince governments to use other indicators, better suited to the goals of the WE, rather than classic indicators such as GDP, unemployment figures or stock market prices, to help define and verify the true goals of policies made for people and nature. Examples of implementations are the Scottish National Performance Framework or the New Zealand Wellbeing Framework.

A second demand on policymakers is that ministries in governments abandon their silo roles and understand that they can only create a better society in the sense of Wellbeing if they collaborate and cooperate intensively with each other. Many central problems in economy and society are at the same time the task of the Ministry of Social Affairs, Economy, Finance and Environment. Egoism or struggles for budgets within a government are very counterproductive. In a complex interrelated world, problems need to be approach jointly from all perspectives and then joint solutions need to be developed.

Further demands of the WE are:

  • Decentralized economies: Instead of relying on huge central production facilities, whose products or services must then be shipped all over the world, local production close to people should be the goal. This applies just as much to energy production (local, sustainable, citizen-driven) as it does to sustainable production or provision of physical products (repair shops, 3D printers, recycling, etc.) and services.
  • Plurality of approaches: The WE recognise that the objectives of the WE can be achieved in different ways around the world and that these different ways enrich the concept.
  • Democracy and participation: There seems to be a general consensus that a WE can only be enforced if it involves the local people in its emergence and thereby makes them partners and co-shapers of the new economy.
  • Experimenting and learning from each other: Wellbeing economies can only develop if we learn from each other – because much of what is not yet understood in one place has already been tried out in another. And we must experiment – because we still have to invent some aspects of how these Wellbeing Economies may function.
  • Wellbeing as a social task, not as a private project: One concern of the pioneers of the Wellbeing Economy is that the term “Wellbeing” could be adopted by neoliberalism and made its own. This would turn the concept against itself: Wellbeing would no longer be a political project, but would be interpreted as a task for each individual within the existing system. Mindfulness approaches in start-up companies, yoga retreats and other concepts that try to strengthen the individual in the struggle within the existing destructive version of capitalism can easily be misinterpreted as a wellbeing approach, while they are the exact opposite.
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Gross Domestic Product Introduction WEGo in Practice Wellbeing Economies: Concept

Replacing GDP with “Girls on Bikes”.

Since early 2018, we have spent a lot of time with our protagonist Katherine Trebeck. In the summer of last year, we also traveled to Costa Rica together, to film her while she was speaking at a conference about sustainable fashion, and while she met the Costa Rican First Lady.

On that trip, she told us about an idea that I forgot about later, and that I was again reminded of recently. It is a beautiful thought that very convincingly illustrates how much we must change our notion of what progress actually means.

You have a very tough challenge to overcome when you try to move away from an economy that is measured by the “growth” it produces, in terms of financially measurable output. Or, in other words, by how much it increases GDP every year. GDP is such an established measurement: Everyone has heard of it, it seems so incredibly familiar (even though most people have no idea what it really is), and that’s why people have a really hard time letting go of it.

Now, how does the growth of GDP tell us that a society is improving?

Well, it measures how much a society makes every year, in terms of how much money is being spent on things in that society. And then it assumes that we are doing better if more things are made and sold next year. And so on. Forever. More stuff is better. It’s as simple as that.

We are now finding out that more is not better. Up to a certain point, yes. But after that, more just hurts more: It hurts nature. It hurts equality in society. It hurts the psychological health in a population. It hurts the climate. Etc.

In the western world, and after we’d broken everything in World War II (“thanks” to the nation I come from, Germany), looking at the GDP was probably a good idea, for a while. We could simply count how much we are making and then assume that we’re doing better if we are producing more next year. It meant more people in jobs, more people could afford things, life was getting better. But those days are gone. We are no longer better off if the GDP keeps growing, we’re actually worse off, nowadays. And we’re clearly ruining the planet this way.

So we speak a lot about what might be a better measure. There’s not going to be a single thing that replaces GDP, of course. But if you ask Katherine which single measure she would pick if she could use only one, to analyse if a society is actually doing better year after year, she’ll say this:

Why not get countries to measure the number of girls who bicycle to school?

Ok, this may seem very strange at first glance. What? Rather than looking at how much economic output our country is producing, let’s count girls on bikes?

Think about it. It makes a heap of sense:

If more and more girls ride a bike to school, it means it’s safer and safer to cycle in traffic.

If more and more girls ride bikes to school, it means that bikes are increasinly accepted as a means of transport. And it means less parents’ cars — who are now doing the “parent taxi” thing (a big issue here in Germany) — are polluting the air and creating dangerous traffic jams outside schools.

If more and more girls cycle to school, it means that more and more girls are actually going to school and getting an education, period. That’s an important achievement in many countries.

If more girls are cycling to school, it means that they’ll get used to this mode of transport, it will translate to better health for them in the future, and to less pollution in society in the future.

If more girls go to school on bikes, it means that they are not afraid to be attacked by predators who do them harm.

If more and more girls ride bikes to school, more and more boys will do that, too.

If more and more girls cycle to school, it means that more of them are empowered and unafraid.

I think I agree with Katherine: This is an incredibly convincing measure of progress. And one that deserves serious consideration as a replacement for GDP. And I am not joking one bit.

Free photo by @luizmedeirosph.

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WEGo in Practice Wellbeing Economies: Concept

The Scottish First Minister’s TED Talk – Let’s Move Beyond GDP

The Scottish First Minister Nicola Sturgeon gave a TED Talk — it was just published on the TED.com website. In her talk, she makes the case for governments to focus the efforts of their work no longer on GDP, but on increasing the well-being of their citizens:

In early 2018, we decided to tell the story behind the Scottish and other governments who were trying to join forces, to move beyond GDP. Not knowing if this would happen, and not knowing how it would play out. The fact that the Wellbeing Economy Governments now do exist, and that Nicola Sturgeon just delivered her courageous message is very exciting for our film project.

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OECD South Korea WEGo in Practice Wellbeing Economies: Concept

The Wellbeing Economics Governments Are Moving Forward.

In the past weeks and months, we’ve been excited to notice how the Wellbeing Economics Governments have been making progress.

New York Times About New Zealand’s Wellbeing Budget
The most visible example may have been the New York Times article about New Zealand’s Wellbeing Budget. We were excited to see this in part also because in January we had the chance to interview the very same Grant Robertson who is mentioned in the article for our film — he is New Zealand’s Finance Minister. And some of what he told us then was pretty much verbatim repeated in the article. The text provides an inspiring view-from-the-outside picture of what the current New Zealand government is trying to do differently, and it’s encouraging to see that the NYT is taking note.

The First Wellbeing Economy Governments Policy Lab
Even closer to our film’s subject was the first meeting of the WEGo policy lab in Scotland on May 1st of this year — in a house that Adam Smith himself had lived in.

Back in November, we were in South Korea as the WEGo — the Wellbeing Economy Governments initiative — was first publicly presented at the OECD Forum in Incheon. What may be the crucial part of this project is said Policy Lab. If governments want to move towards a holistic approach to Wellbeing of People and Planet, they need to do a lot of things very differently. And that is hard.

So in order to figure out how to make this happen, they are trying to learn from each other, by organising these policy labs. In the words of First Minister Sturgeon:

But we know that we don’t have all the answers. We know that we have got a lot to learn – and a lot to gain – from working with other like-minded countries.

That’s why the Scottish Government established the Wellbeing Economy Governments initiative and it’s why we’re so pleased to be hosting the first of these Policy Labs. And it’s why we’re delighted to have such a wealth expertise represented here today.

Our film’s protagonist Katherine Trebeck attended the opening session, where both the First Minister of Scotland, Nicola Sturgeon, and the Prime Minister of Iceland, Karin Jakobsdottir, gave speeches (New Zealand’s Prime Minister Jacinda Ardern was not at the lab, but NZ sent representatives). And Katherine published a blog post about what that was like, on the Wellbeing Economy Alliance website. Here is how she explains in her text what the WEGo are about:

WEGo is about governments rolling up their sleeves, linking arms, and walking together down a path that sees national success as being defined by the quality of life of citizens rather than the growth rate of a country’s GDP. As the Chief Economist of the Scottish Government said, WEGo is about driving the wellbeing agenda in economic, social, and environmental policy making.

First Minister Sturgeon’s speech from the event is available online, and some of her statements show where the WEGo are headed, particularly when it comes to their stance on the role of the GDP:

GDP has too often come to be seen not just as an indicator of a country’s wealth, but as the main measure of its success.

(…)

As governments, we see the promotion of sustainable and inclusive growth as a vital way of raising living standards for all. But we also understand that growth is only of any real value if it makes people’s lives better, it is not, and never should be seen, as an end in itself. We have to test whether we are creating a fairer, healthier, happier nation in the process.

And then I cannot help but notice: The heads of these three Wellbeing Economy Governments are all strong and inspiring women. I’m beginning to doubt that that’s a coincidence. And instead a sign of a future that needs a lot more female leaders.