Rebuilding social justice  |  Publications  |  07.07.2011

National Accounts of Well-being: Bringing real wealth onto the balance sheet

This publication from the New Economics Foundation presents a radical new way of measuring social progress in modern societies, based on the subjective well-being of the people who live in them. This report presents one of the most comprehensive international analysis of well-being ever produced.

GDP fails to capture a range of factors that indicate welfare, such as the unpaid work of households, the distribution of income and the depletion of resources. Yet in the aftermath of the Second World War overall productivity became firmly entrenched as the key hallmark of a country’s overall success and widely interpreted as a proxy for societal progress, with damaging consequences for people and the planet.

National accounting indicators such as Gross Domestic Product (GDP) have only ever revealed a very narrow view of human welfare. A myopic obsession with growing the economy has meant that we have tended to ignore its negative impacts on our well-being such as longer working hours and rising levels of indebtedness. It has created an economic system which has systematically squeezed out opportunities for individuals, families and communities to make choices and pursue activities which play a role in promoting positive well-being and human flourishing. All this is underpinned by a fiscal system which, as recent events have exposed, has run out of control. Add to this the fact that the model we have been following – of unending economic growth – is taking us beyond our environmental limits and the case for very different measures of human progress and policy evaluation become compelling.

We now need to shift towards more meaningful measures of progress which capture the richness of people’s lived experience and by doing so create a far more effective tool with which to guide policy. The study presents a radical, robust proposal to guide the direction of modern societies and the lives of people who live in them. It demonstrates why national governments should directly measure people’s subjective well-being: their experiences, feelings and perceptions of how their lives are going. It calls for these measures to be collected on a regular, systematic basis and published as National Accounts of Well-being. The measures are needed because the economic indicators which governments currently rely on tell us little about the relative success or failure of countries in supporting a good life for their citizens.

Edited extract from executive summary.

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