If you want to capture a complicated story, you need more numbers, not just different ones. But perhaps I am too sceptical.
However, putting these measures into a coherent framework is a lot of work! I started a hobby project in doing this last year (see this diary), but quickly found that it is very time-intensive. Would love to go to the conference, but I have a budget to think about. I hope there's good documentation.
The "Beyond GDP" website FAQ mentions this approach, albeit very briefly:
Beyond GDP - International Conference - 19 & 20 November 2007, Brussels
Indicator sets (e.g. those comprised of environmental, economic and social indicators) are yet another way of complementing the single use of GDP. A recently started effort - the Canadian Index of Well-being - is under development in Canada.
The Canadian Index of Well-being's Contribution to Beyond GDP "Virtual Indicator Expo" (PDF) states that:
The CIW will track changes in eight quality-of-life domains.
These are:
Living Standards Healthy Populations Educated Populace Vital Communities Ecosystem Health Civic Engagement Time Use Arts and Culture
In fact, though, there are plenty of "indicator sets" already available, provided for example by the OECD, EuroStat, Worldmapper, and others, many linked to on the "Beyond GDP" website.
The big question is: Is it easier to persuade everyone to do away with a single indicator altogether for measuring the overall health of a society, or is it easier to come up a composite index (i.e. a single number) that while not perfect at least takes into consideration a far broader and more pertinent set of factors than the unidimensional GDP we have now?
(Actually, even the Canadian Index of Well-being project hedges a bit in that paper --
The domains will be blended into a composite index that will provide a quick snapshot of whether overall Canadian wellbeing is changing for better or for worse. CIW reports will present detailed information on both the composite index and the individual domains. The CIW's `basket' of domains will be reported regularly with clarity about trends and interrelated stories (e.g., "While X is on the rise, it is interesting to note that Y is flat, and Z is declining. Possible explanations include...").
-- no doubt in acknowledgement of the possibility that people will continue to discuss, compare, judge, criticize, rank, etc. in terms of a single number.) Truth unfolds in time through a communal process.
The "Arts and Culture" variable also at least sounds like it would favor certain places above others, perhaps unfairly. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Yeah, there's the rub.
Although a piece in yesterday's New York Times agrees that it's not GDP, nor Happiness, but Leisure and Social Interaction that we should measure -- and try to improve:
The era of laissez-faire happiness might be coming to an end. Some prominent economists and psychologists are looking into ways to measure happiness to draw it into the public policy realm. Thirty years from now, reducing unhappiness could become another target of policy, like cutting poverty. <...> Happiness seems fairly cheap to manipulate. <...> A notorious study in 1974 found that despite some 30 years worth of stellar economic growth, Americans were no happier than they were at the end of World War II. A more recent study found that life satisfaction in China declined between 1994 and 2007, a period in which average real incomes grew by 250 percent. Happiness, it appears, adapts. It's true that the rich are happier, on average, than the poor. But while money boosts happiness, the effect doesn't last. We just become envious of a new, richer set of people than before. Satisfaction soon settles back to its prior level, as we adapt to changed circumstances and set our expectations to a higher level. <...> Despite happiness' apparently Sisyphean nature, there may be ways to increase satisfaction over the long term. While the extra happiness derived from a raise or a winning lottery ticket might be fleeting, studies have found that the happiness people derive from free time or social interaction is less susceptible to comparisons with other people around them. Nonmonetary rewards -- like more vacations, or more time with friends or family -- are likely to produce more lasting changes in satisfaction. <...> More broadly, if the object of public policy is to maximize society's well-being, more attention should be placed on fostering social interactions and less on accumulating wealth. If growing incomes are not increasing happiness, perhaps we should tax incomes more to force us to devote less time and energy to the endeavor and focus instead on the more satisfying pursuit of leisure. All They Are Saying is Give Happiness a Chance
Happiness seems fairly cheap to manipulate. <...>
A notorious study in 1974 found that despite some 30 years worth of stellar economic growth, Americans were no happier than they were at the end of World War II. A more recent study found that life satisfaction in China declined between 1994 and 2007, a period in which average real incomes grew by 250 percent.
Happiness, it appears, adapts. It's true that the rich are happier, on average, than the poor. But while money boosts happiness, the effect doesn't last. We just become envious of a new, richer set of people than before. Satisfaction soon settles back to its prior level, as we adapt to changed circumstances and set our expectations to a higher level.
<...>
Despite happiness' apparently Sisyphean nature, there may be ways to increase satisfaction over the long term. While the extra happiness derived from a raise or a winning lottery ticket might be fleeting, studies have found that the happiness people derive from free time or social interaction is less susceptible to comparisons with other people around them. Nonmonetary rewards -- like more vacations, or more time with friends or family -- are likely to produce more lasting changes in satisfaction.
More broadly, if the object of public policy is to maximize society's well-being, more attention should be placed on fostering social interactions and less on accumulating wealth. If growing incomes are not increasing happiness, perhaps we should tax incomes more to force us to devote less time and energy to the endeavor and focus instead on the more satisfying pursuit of leisure.
All They Are Saying is Give Happiness a Chance
If so, it would suggest that the CIW is at least on the right track with its "Vital Communities" and "Time Use" categories, despite the challenges od measuring those that you point out. Truth unfolds in time through a communal process.
I understand that a single indicator can be useful, if only for communication purposes. However, any composite index will need many choices about what to include and how to wheigh them. And given that there is no more or less "natural" choice for these weights (as opposed to for example the weights used in stock market indices), it is going to be vulnerable to tuning to get desirable answers.
To put it bluntly, I can't imagine the EU developing an index on which it (or at least its richer parts) score below the US, nor one on which Germany and France differ substantially from each other, or score below the UK. In fact, I don't think the UK will adopt any measure developed by the EU, no matter how well it scores on it. Basically, if the EU as organization is involved in its development, no matter how good the measure is, it will be a bit suspect
I think it would be much safer if separate people, countries and organizations develop their own measures for their own purposes, much like the CIW you mention. Then, after these have been tested and fine-tuned we can compare them, see how they correlate and scale to different countries and situations. After that, the politicians can come in and pick one that works as they would like it. Let them pick a car but not design the engine.
Perhaps I am mistaken, but this conference seems to be about a much earlier stage in the development. It would be wise to let them explain what they would like to see in an index, but please let independent people develop the details.
Pieter Everaers: European Commission, Eurostat Enrico Giovannini: OECD Hazel Henderson: Club of Rome Andreas Huber: European Parliament Tony Long: WWF Robin Miège: European Commission, DG Environment
*Actually, not one. I looked up Andreas Huber, and he's head of the environment committee secretariat of the EP, not a Member of Parliament himself.
These are all civil servants.
The Human Development Index (HDI) then represents the average of the following three general indices: Life Expectancy Index = Education Index = Adult Literacy Index (ALI) = Gross Enrolment Index (GEI) = GDP Index = LE: Life expectancy at birth ALR: Adult literacy rate (ages 15 and older) CGER: Combined gross enrolment ratio for primary, secondary and tertiary schools GDPpc: GDP per capita at PPP in USD
The Human Development Index (HDI) then represents the average of the following three general indices:
LE: Life expectancy at birth ALR: Adult literacy rate (ages 15 and older) CGER: Combined gross enrolment ratio for primary, secondary and tertiary schools GDPpc: GDP per capita at PPP in USD
It's possible that the EU is just trying to come up with a measure that makes it look better than the US, but I think the problem is that the EU has gotten itself into a pinch with its Lisbon Strategy for Growth and Jobs, especially on the "Growth" bit, because "growth" is not sustainable as currently configured (for a data point, see my diary Spain is unsustainable on November 11th, 2007). It has been suggested to make non-renewable resource extraction (which is not "production"!) contribute a negative amount to GDP as a way to measure "sustainable" growth.
On the "jobs" part of the Lisbon strategy, when one thinks that filling a call centre with telemarketers counts as "jobs", one realizes that there's more to a sensible employment policy than to get people to spend 8 hours a day doing no matter what to earn a living. We have met the enemy, and he is us — Pogo
The use of non-renewable resources is already captured in future GDP. We could put it in the current figure, but I think we'd really just be talking about one means of accounting vs another.
The problem with GDP -- and here I'm speaking only to the economics of it -- is that it doesn't give our populations a full story on how the typical person is doing. Median real income growth/contraction is a much better measure, but that, too, isn't perfect. GDP is fine for central bankers who need a picture of the economy as a whole, but it's of little use beyond those sorts of macroeconomic issues.
The HDI is a good start as a measure that the public can use to judge how things are going, but I agree with everyone here about needing more numbers. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
"make Europe, by 2010, the most competitive and the most dynamic knowledge-based economy in the world".
With this, they of course implicitly claimed that the EU was in 2000 not the most competitive blah-blah of the world. Since then, little has been done and nothing has been achieved. European growth figures haven't changed much and US GDP and productivity growth have been comparable or higher than those of the EU countries most of the time. Most projects announced. like the European Institute of Technology, have been ditched because no one was interested.
So,there is reason to suspect that the European Committee would very much like to have a different index on which the EU is doing better than the US, is growing faster than the US, etcetera.
If you believe that the EU was OK in 2000, than it still is doing fine. If you think the EU had a problem in 2000, then the problem hasn't gone away. But the Committee will soon have claim that the EU was doing bad in 2000 and a great job now, so they are in definite need for creative accounting.
But I still think the Lisbon Declaration was a 'good thing', and that the failed promise to implement its aims is regrettable. You can't be me, I'm taken
(These kinds of conferences don't get that much media attention, really)
Schumpeter and democratic theory In the same book, Schumpeter expounded a theory of democracy which sought to challenge what he called the 'classical doctrine'. He disputed the idea that democracy was a process by which the electorate identified the common good, and politicians carried this out for them. He argued this was unrealistic, and that people's ignorance and superficiality meant that in fact they were largely manipulated by politicians, who set the agenda. This made a 'rule by the people' concept both unlikely and undesirable. Instead he advocated a minimalist model, much influenced by Max Weber, whereby democracy is the mechanism for competition between leaders, much like a market structure. Although periodical votes from the general public legitimize governments and keep them accountable, the policy program is very much seen as their own and not that of the people, and the participatory role for individuals is severely limited.
In the same book, Schumpeter expounded a theory of democracy which sought to challenge what he called the 'classical doctrine'. He disputed the idea that democracy was a process by which the electorate identified the common good, and politicians carried this out for them. He argued this was unrealistic, and that people's ignorance and superficiality meant that in fact they were largely manipulated by politicians, who set the agenda. This made a 'rule by the people' concept both unlikely and undesirable. Instead he advocated a minimalist model, much influenced by Max Weber, whereby democracy is the mechanism for competition between leaders, much like a market structure. Although periodical votes from the general public legitimize governments and keep them accountable, the policy program is very much seen as their own and not that of the people, and the participatory role for individuals is severely limited.
