GDP or GNH (The Bhutan Way)?

March 24, 2017

GDP or GNH (The Bhutan Way)–Maybe it’s Time to screw the  Economists and start looking at alternative ways to measure what makes life worthwhile

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Listen to this TED presentation by Chip Conley and reflect. I enjoyed it and wonder why we continue to measure only the measurable (the tangibles) and ignore the intangibles. As  someone who is trained in Economics (and does being taught this academic discipline make a economist?), I am wonder how it is that  I can be so misled and still have not abandoned GDP as a measurement of national wealth if I know it is misleading when intangibles matter more today. Maybe it is a force of habit. Should be I Aristotelian or Maslowian?  Let me know what you think.–Din Merican


8 thoughts on “GDP or GNH (The Bhutan Way)?

  1. There is nothing new about the basic flaw in using only the GDP…(many will recall that originally it was the GNP…Gross National Product…which was a better measure of the economy…but still incomplete…and was slowly left out because it did not fit into politics)…

    GDP is only meaningful if it is accompanied by income (wealth) distribution… otherwise we end up like in the current situation in the US…which has had astronomical levels of GDP for more than half a century…but has the widest income inequality in the world…

    Common sense really…

  2. Bhutan got a lot of mileage out of its practice, first adopted in 1972, of using a broad “Gross National Happiness” (GNH) measure of its people’s welfare rather than a narrow measure like income. I first visited this mountain kingdom before they introduced TV in 1999, and I’ve since been back twice to play golf at Royal Thimpu Golf Course. And each time I saw changes in Bhutan. The first time I saw mostly Indian visitors who behaved like colonial masters. It’s not hard to understand why the Bhutanese dislike the Indians because India had attempted but failed to annex Bhutan in 1990, but in 2006 India succeeded to grab Duars from Bhutan. The last time I was there I saw many Chinese visitors. Bhutanese were telling me they want to work on reducing the obstacles to happiness rather than talking about happiness as how their government spent their day.

    According to the many people who have fallen in love with the idea of GNH, a holistic approach to welfare reflects more accurately the many dimensions of well-being in the human condition. The philosophy has been urged upon rich and developing economies alike as the proper goal of government policy. Except Bhutanese people today are throwing out its backers and brought in its critics. For GNH defines and imposes a unitary set of values that does not protect diversity or individual rights, or at least addresses them only in ways that can be defined and controlled by the government. It is a communitarian view of the world distinctly reminiscent of Hu Jintao’s ideal of a “harmonious society”, a concept frequently cited by the Chinese government when clamping down on free speech and dissent. It should give GNH’s foreign supporters a long pause for thought.

    Poor farmers need more motorized rototillers to work their land and fewer autocratic monarchs commanding them to be happy in a manner decreed by the state. Measures of well-being need to be debated and tested rather than dreamed up and imposed. Bhutan’s “Gross National Happiness” has attracted praise from gullible foreigners, but at home it has acted as a cover for serious failures of governance and severe abuses of human rights. Its demotion is entirely to be welcomed.

    Chip Conley brought up Abraham Maslow’s model of hierarchy of needs. Maslow has made great contribution to the studies of psychology, and no one can deny that. But the problem with Maslow’s hierarchy, none of these needs, starting with basic survival on up, are possible without social connection and collaboration. Without collaboration, there is no survival. It was not possible to build a secure structure, or care for children while hunting without a team effort. It’s more true now than then. Our reliance on each other grows as societies became more complex, interconnected, and specialized. Connection is a prerequisite for survival, physically and emotionally.

    Needs are not hierarchical. Life is messier than that. Needs are, like most other things in nature, an interactive, dynamic system, but they are anchored in our ability to make social connections. Maslow’s model needs rewiring so it matches our brains. Belongingness is the driving force of human behavior, not a third tier activity. The system of human needs from bottom to top, shelter, safety, sex, leadership, community, competence and trust, are dependent on our ability to connect with others. Belonging to a community provides the sense of security and agency that makes our brains happy and helps keep us safe.

    In some ways, life hasn’t changed our fundamental human natures. Whether it’s the ancient Savannah or today’s Facebook and Twitter, social behaviors adapt to the environment to support that most basic of human needs. Social connection is ever-present. What social media has done is make it infinitely easier for the social connection to take place. And today’s young people entering the workplace, who have grown up in this inter-connected world, expect the workplace to reflect that.

    In management today, I believe, Maslow’s hierarchy of needs was helpful to a certain extent in pointing out to managers why traditional management – hierarchical bureaucracy with managers acting as controllers of individuals – was unlikely to meet the psychological needs of employees. But it offered an unrealistic route to meeting those needs: ascension up the hierarchy of needs towards self-actualization. The truth is that not everyone wants, or needs, or is able, to be a self-actualizing artist or leader.

  3. Good one Din. It’s time to evolve or devolve, depending on how one looks at it.

    I’ve consistently been against Globalization and it’s demon spawn, Consumerism. What intellectually and economically challenged folk like me always advocated was a local economy and distributism. Unfortunately, the latter has been labelled by many of being too “Catholic”, although most practitioners are secular. No one listens simply because it’s inconvenient and against what has, is and will be taught in the hallowed-hollow lecture halls of economic faculties world over.

    The Maslowian hierarchy is basically an inadequate, allopathic remedy to what should be Self Evident, Essential and therefore enable Happiness. As i have always emphasized, Max Neef’s Fundamental Human Needs are a better metric for all things intangible in social theory.

    It’s not what we own, profess to own or obsession with brand names which determine our existential affect (psy: the experience of feeling or emotion). It is our sense of Ownership of Self that is of utmost importance.

    For aspiring ‘Soft’ Economists:

  4. Gross National HAPPINESS is OK for tiny societies nestled within high mountains…hence their name… Shagrillas…

    For the remaining 7 billion plus inhabitants of the planet happiness can come no better than in a system that shares equitably, wealth created by ordinary folk…

    So, forget about Bhutan …and let us concentrate on correcting the indecent gap in our economies… and happiness will follow…

  5. I prefer Schumpeter’s “small is beautiful” given that capitalism has gone amok. Working in a MNC service company for the last 16 years, we have undergone m&a 3 times in five years, and durign this period, our parent companies gave us 10 good reasons why they are buying us and then another 10 good reasons why they are selling us a few years down the road!

  6. Ah so Brian, you like E. F Schumacher (not Schumpeter)? Great.
    His Buddhist Economics is also brilliant. And he’s a distributionist.

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