Rory Sutherland Rory Sutherland

You can’t judge happiness by GDP

Rory Sutherland says that it is wrong to equate the cost of something with how valuable we find it. New technology, for instance, is cheap but transforms our lives

issue 19 December 2009

One of David Cameron’s ideas which may have fallen victim to the recession is the proposal to measure Britain’s success by some means other than GDP. When first proposed, the idea was linked to the famous remark of the king of Bhutan, Jigme Singye Wangchuck, who had observed in the 1980s that ‘Gross National Happiness is more important than Gross National Product’. Cameron’s suggestion was that some more holistic measure of ‘Gross National Wellbeing’ should replace the purely economic measure of GDP.

At a time of financial crisis, it would be easy to ridicule the suggestion that we all become less materialistic, especially when it comes from an Etonian — the kind of person who, in Harry Hills’s joke, ‘already had a castle so, for his birthday, his parents hired a bouncy council estate’. The idea isn’t helped by its Buddhist associations either: if you have just lost your job in Teesside, it can’t be much consolation to hear that you suddenly have a lot more spare time for sitting around saying ‘om’ or dyeing everything saffron.

However, some recent findings suggest we should not abandon this line of enquiry quite yet — for, rather than killing it, the downturn may have proved the idea’s importance. Against all expectations, the latest findings from the United States seem to suggest that this latest recession has made people happier. Measures of happiness in the US hit previous lows in 1973, 1982, 1992 and 2001, all recession years, so you might assume that 2009 would be worse. In fact Time (tinyurl.com/yak6pyl) reports that the latest findings of the Gallup-Healthways Well-Being Index show that, after an initial dip at the time of the crash, American happiness has now hit a record high.

Surprised? The author of the Time article, Nancy Gibbs, has a simple explanation for these findings.

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