Category: Wellbeing Economies: Concept

What are wellbeing economies?

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Wellbeing Economies: Concept

Online-Event: Maja Göpel and Lorenzo Fioramonti

On Monday, the 30th of November 2020 at 7 pm (CET), German Professor and ‘transformational thinker’ Maja Göpel will meet with Lorenzo Fioramonti (one of the two main protagonists of our film) in a live debate, streamed online. The title for the evening:

WELLBEING
How can we recreate our societies and
thereby ensure wellbeing and quality of life?

The event is organised by Arts & Nature Social Club, in collaboration with the German Chapter of the Club of Rome.

Even though we are already deep in the editing process, we will attend and film the event — to capture what will surely be an inspiring and inspired discussion about how to make our societies future-proof.

For those who want to join, here is the YouTube live link for the evening. Musical support will be provided by Frida Gold.

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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.

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Behind the Scenes Gross Domestic Product OECD South Korea On the Road Wellbeing Economies: Concept

Film: Thoughts from the OECD Forum in South Korea.

In November our documentary film took us to Incheon in South Korea for the OECD World Forum on Statistics, Knowledge and Policy. Here’s a little video from the trip!

[youtube https://www.youtube.com/watch?v=LjNYFjYBitM&w=1110&h=624]

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On the Road poverty Wellbeing Economies: Concept

“In the UK, ‘poverty is a political choice.'”

We are just now returning from our trip to England and Scotland, after conducting a range of amazing interviews for our film — with inspiring people both in Scotland and in England. At the same time, we couldn’t help but notice the ripples of political shockwaves rolling through the United Kingdom. The most obvious one being Brexit, of course, which was incredibly hotly debated right when we were in Edinburgh and Glasgow. The PM Theresa May had just presented the results of her negotiations with the EU in Parliament, and all the media were (and still are) full of the ensuing debate. But on Saturday, I got an even greater shock when I picked up an issue of the Guardian.

The front page article was about a report from the “UN rapporteur on extreme poverty and human rights”, Philip Alston. He had completed a two-week mission to Britain, following up earlier indications that the situation of the poor and their numbers in the UK were highly alarming. His current report confirms that the situation is dire — after years of austerity policies. Even worse, according to his reporting, the situation is not just unfortunate or tragic, it is the will of the ruling political establishment in Britain.

14 million people in the UK live in poverty — that is one fifth of the population. 1.5 million are destitute — they do not have the money for basic essentials.

And that is happening in the fifth-largest economy of the world, with record numbers of millionaires and billionaires. The size of the issue is hard to even comprehend.

Here are a few quotes from the article:

The government has inflicted “great misery” on its people with “punitive, mean-spirited and often callous” austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity, the United Nations poverty envoy has found.

In others words: a UN official literally says that the British Government is deliberately cruel to poor people.

… compassion had been abandoned during almost a decade of austerity policies that had been so profound that significant elements of the post-war social contract (…) had been swept away.

In other words, the British Government is ripping apart the fabric that holds society together, by giving more to the rich and not caring at all about the poor.

In [his] report (…), the eminent human rights lawyer said that in the UK, “poverty is a politicial choice”.

And we are talking here of the world’s fifth largest economy!

(…) Alston said that the problems were “obvious to anyone who opens their eyes to see the immense growth in food banks and the queues waiting outside of them, the people sleeping rough in the streets, the growth of homelessness, the sense of deep despair that leads even the government to appoint a minister for suicide prevention and civil society to report in depth on unheard-of levels of loneliness and isolation”.

The British Government has a minister for suicide prevention! And yet they don’t think that there is a problem:

The ministers he met (…) were almost entirely dismissive of criticisms of welfare changes and universal credit, he said. Instead they described critics as political saboteurs, or said they failed to understand how it worked.

Scotland is one of the example countries that our film will speak about. And the local Scottish Government is apparently trying to do what it can to work against the horrible effects of the political decisions coming from London:

(…) authorities in Scotland and Northern Ireland are frantically trying to devise ways to ‘mitigate’, or in other words counteract, at least the worst features of the government’s benefits policy (…)

The way many economists and policy-makers think is not only deeply troubling because it is destroying our planet. It’s also deeply troubling because it is destroying people.

That is why we are making our film about Wellbeing Economies. Because this insanity needs to end, and we want to help tell that story.

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Gross Domestic Product Sustainability Wellbeing Economies: Concept

Criticising the GDP: a Key Concept for Wellbeing Economies.

One of the key ideas driving the fight for wellbeing economies is the realisation that the Gross Domestic Product — the GDP — and its “endless growth” may no longer be the right measures to guide our economic policies. What served us well in the past, particularly after the end of World War 2, seems to be increasingly dangerous for the development of our societies. In our latest short video, we’re explaining why that is:

[youtube https://www.youtube.com/watch?v=fqWtD7AUNBw&w=1110&h=624]

Update December 3rd 2018: If you’re interested in this, here is another blog post that describes what an alternative to “GDP-thinking” might look like, and what countries are doing to implement it.