Measuring quality of life – is it time for a change?

The Purpose of Wealth as a Mean to Support General Wellbeing

The other day I decided to have a light read, the Organisation for Economic Cooperation and Development’s Framework for Statistics on the Distribution of Household Income, Consumption and Wealth from 2013, a very light read indeed. And must admit that this paper got me thinking about quite a lot of things which I will try to summarise here concerning our present and future.

Systems in use for the creation of macro-economic statistics are starting to be questioned, which is, in the author’s opinion, great, as probably there are quite a lot of people wondering if the Gross Domestic Product indicators are actually still a valid form to understand wealth, wellbeing and quality of life when it comes to individuals and communities. Moreover, does GDP growth automatically translate in an improved quality of life? Maybe to some extent it did, and likely more in the past than today.

If we look at countries, specifically at State Structures, we understand that these organised structures have a major purpose, that to guarantee the safety and prosperity of its inhabitants, their well-being, and that is something that is not measured by the GDP or only marginally. When looking at incomes, expenses, consumption and the distribution of wealth, do we get a clear and comprehensive picture of the people’s wellbeing, how it develops, in which direction is it going? Quite the opposite the picture is limited and incomplete, and still this insufficient information is at the very root of the decisions made by policymakers and economists as well as their future forecasts, something that in the past years appears to show more and more errors and miscalculations.

To measure well-being, we should perhaps take a pause to understand what well-being actually is, and there is no easy answer. One can define well-being as the quality of life, how happy and satisfied we are with our lives, thriving in a place where our true potential and virtues are really appreciated, where we can belong to a community that offers us participation opportunities, and generates possibilities for our development, that help us grow a sense of purpose and accomplishment concerning both personal and social goals. Back in 2008 that was roughly the definition the New Economics Foundation provided us on what is wellbeing, and what is most striking is that none of the above-mentioned keywords exist in the most common macro-economic measurement systems and indicators.

The world today is really different from the one that witnessed the GDP criteria first generated, the challenges and problems humanity faces today are not the same as the ones discussed at Bretton Woods; if then the challenge was to make market economy and wealth more widespread and rebuild the global markets after two world wars and enhance trade between countries, the threats of today concern the globe as a whole, depletion of resources, pollution, climate crisis, health challenges; unimaginable in 1944 and definitely not on the agenda of world leaders back then.

The current and old economic models are unsustainable, they served their purpose back in the day, and not anymore, and as oftentimes it occurred the history of our species, when a system becomes obsolete, we need to gather the lessons learnt and tag them along while we restart the systems into brand new ones, and more relevant to our today’s conditions. We need to develop a model that is centred around well-being. If the richest countries of the world have their wealth produced and kept by a small minority, while at the same time their segments of population that can’t afford healthcare or live below the poverty line, we still measure the wealth of that minority as equalling the wealth of the country, not the wellbeing of its inhabitants, despite the state system failing at guaranteeing safety and quality of life of all its citizens. If the wealth of a single country does not benefit all its citizens, can it be really considered wealth? (Yes, the author is that naïve!)

Rutger Bregman, the author of “Utopia for Realists”, argued in his book that a person on therapy for depression in need of paying for the therapist, pharmaceutical and treatment, is actually a positive contributor to the GDP as much of this person’s salary is transferred back to the market by purchasing services and goods. Would it not be a better indicator to measure that person’s mental health, to understand well-being and quality of life?

It was 2011 when the OECD had an initiative called “Better Life” and the outcome was the creation of 3 pillars upon which the measurement of the people’s wellbeing can be made:

  1. Material Living Conditions: what possibilities people have to purchase and consume goods and services and how much command and control is there over the needed resources.
  2. Quality of Life: What shapes people’s opportunities and chances in life, the access and use to what they consider to be non-monetary valuable according to cultural contexts.
  3. Sustainability of the socio-economic and natural systems where people live and work: That is the impact of human activities on different type of capitals such as; natural, human, social and economic, where a positive impact fosters well-being.

We can metaphorically try to imagine our societies and economies like a human body, presently we believe that it is enough to pump most resources to fewer organs, such as the heart and the brain, and if these are healthy then automatically will make all other organs healthy. It is true that heart and brain need to function properly for the other organs to be operational, and at the same time a healthy heart and brain are not necessarily indicators of a healthy body, a stomach ache or a kidney failure might occur regardless, for that purpose the body administers resources such as vitamins, minerals, etc. to ensure the health and well-being of the whole body. Shouldn’t we learn something from the most basic biological process upon which life is centred? Just asking for a friend.

Elaborating on the metaphor of the human body, poverty, inequality, social exclusion, and unsustainable practices are unhealthy, even when limited and in relatively small numbers; never mind when those are widespread. Coming across a paper by Adrian V Jaeggi “Do wealth and inequality Associate with Health in a Small-Scale Subsistence Society” a few thoughts came to the mind; the basic argument there is that a person’s social and economic position if unequal and unbalanced can affect both well-being and health, due to psychosocial stress. The outcome at the personal and social level that were observed included depression, anxiety, high blood pressure, social conflict; not observed or in much lesser levels among the wealthier segments of the population, and these observations were made during a study in high-income countries, the “advanced industrialised” societies

Lack of access to opportunities for well-being and having a good quality of life is bad for health, personal and social, and is overall harmful for individuals, societies, countries, their governance systems and of course for the economy, generating a conflictual and stressful environment. The solution needs to start from policy, preferably a bottom-up approach and starting local, where addressing inequalities and fostering wellbeing and quality of life can have tangible and visible results on the everyday life of community members.

Published by Lorenzo Nava

Consultant, Trainer and Coach, on participatory learning processes, experiential learning dynamics, non formal education and NLP certified practitioner