Self-Motivation
David Goggins
Former Navy Seal
Career Development
Bryan Cranston
Actor
Critical Thinking
Liv Boeree
International Poker Champion
Emotional Intelligence
Amaryllis Fox
Former CIA Clandestine Operative
Management
Chris Hadfield
Retired Canadian Astronaut & Author
Learn
from the world's big
thinkers
Start Learning

Are we confusing money with well-being? New Zealand's leaders believe so.

New Zealand's recent budget policy puts the health and well-being of its citizens over economic growth.

Are we confusing money with well-being? New Zealand's leaders believe so.
  • Economists and politicians have traditionally focused on economic growth to set policy and measure how citizens fare.
  • New Zealand has become the first country to put well-being, not growth or production, at the center of its economic policy.
  • Calls for "purposeful capitalism" are emerging in other countries, including the United States.


Politicians love to flaunt economic growth. A healthy gross domestic product (GDP) means an economy is doing well, which means the country is doing well, which means its citizens are doing well. It's all thanks to sagacious policy crafted by our savvy political leaders.

That's the rosy narrative anyway. In truth, GDP measures the average of per capita output in an economy overall, but tells us little about the prosperity of individual citizens.

For example, GDP can increase in tandem with income inequality. Social mobility can be quashed even within a prosperous economy. Corruption can take root in rich countries. And production measurements can ignore consequences such as environment degradation.

Some economists argue that our love affair with GDP needs to end and be replaced with more robust economic measurements. As Nobel Prize laureate Michael Spence told The Atlantic:

"Many of us think we would benefit from a multi-dimensional approach that captures things people care about. Missing from [economic] growth are many things: health, distributional aspects of growth patterns, sense of security, freedoms of various kinds, leisure broadly defined, and more."

New Zealand's Prime Minister Jacinda Ardern has taken up that call. Last month the island nation unveiled its new well-being budget, a policy designed to put the health and happiness of its citizens at the economic fore.

Happiness as a benchmark of success

Prime Minister-designate of New Zealand Jacinda Ardern before her swearing in. Photo credit: Governor-General of New Zealand/Wikimedia Commons

New Zealand's new economic policy will shift away from growth and production as a measure of economic success. As noted in New York Times, its new focus will be on "goals like community and cultural connection and equity in well-being across generations." While other countries have reconsidered traditional economic metrics, New Zealand is the first to initiate such a wellbeing-guided policy.

"This is not woolly, it's critical," Ardern said at the World Economic Forum's 2019 meeting in Davos. "This is how we bring meaning and results for the people who vote for us. It's not ideological either. It's about finally saying this how [sic] we meet expectations and try and build trust back into our institutions again, no matter where we are in the world."

The revised policy sets five priorities for New Zealand's governmental spending: thriving in the digital age; improving mental health services; reducing child poverty; developing a low-emission, sustainable economy; and addressing inequality, especially among the country's Maori and Pacific Island peoples.

The new policy has earmarked nearly NZ$2 billion for mental health services. (New Zealand has one of the highest teen and young adult suicide rates among Western democracies.) Resources have also been designated for child poverty and long-term shelter for the homeless, more than NZ$1 billion and NZ$200 million respectively.

Of course, not every New Zealander is onboard with the budget's new direction. "New Zealanders won't benefit from a government that is ignoring the slowing economy and focusing instead on branding," Amy Adams, a lawmaker in the opposition National Party, said in a statement to the Times. "We're facing significant economic risks over coming years, but this government is focusing on a marketing campaign."

A well-being paradigm shift?

As noted by the World Economic Forum, it will take years for New Zealand to refine its goals and then quantify the results, but other countries' well-being experiments will help us gather data in the meantime.

The United Arab Emirates employs a Minister of State for Happiness and a National Program for Happiness and Well-Being. The program sets benchmarks for happiness and fosters conditions of well-being that allow employees to thrive within the country's economy.

Elsewhere, Bhutan uses a Gross National Happiness index to evaluate its citizens well-being and incentivize policymakers. The index measures nine categories, among them health, education, time use, living standards, and community vitality.

Neither country has budgeted for well-being as New Zealand has, and they still use the GDP growth standard. But both have supplemented traditional economics with more purposeful economic thinking.

Capitalism: the root of all happiness

Can a more purposeful capitalism take root in the United States and other Western democracies? That answer will depend on a whole host of variables, among them New Zealand's successes and failures. However, there are already calls for similar changes to take place stateside.

In his book The War on Normal People, Democratic presidential candidate Andrew Yang laid the foundation for what he calls "human-centered capitalism." Yang wants to establish a universal basic income that gives Americans over the age of 18 $1,000 a month, no strings attached. Yang's so-called "freedom dividend" is the centerpiece of his policy, but his aim is wider is scope. He wants the market to support human experiences it previously undervalued, such as the arts, parenting, teaching, the environment, community connections, and disenfranchised groups.

"We must make the market serve humanity rather than have humanity continue to serve the market. We must simultaneously become more dynamic and more empathetic as a society," Yang writes.

Similarly, the Green New Deal supports a multiplex of ideas that would feel at home with a wellbeing-based capitalism. To name a few: universal health care, a right to affordable housing, the restoration of Glass-Steagall, and debt relief for students and homeowners.

New Zealand is a small island nation — and so out of the way that it's often forgotten by mapmakers. Yet, it could be the start of some big changes in how we measure progress and happiness.

Just How Much Land Does the Federal Government Own — and Why?

The rough beauty of the American West seems as far as you can get from the polished corridors of power in Washington DC.

Surprising Science

The rough beauty of the American West seems as far as you can get from the polished corridors of power in Washington DC. Until you look at the title to the land. The federal government owns large tracts of the western states: from a low of 29.9% in Montana, already more than the national average, up to a whopping 84.5% in Nevada.

Keep reading Show less

Can VR help us understand layers of oppression?

Researchers are using technology to make visual the complex concepts of racism, as well as its political and social consequences.

Future of Learning
  • Often thought of first as gaming tech, virtual reality has been increasingly used in research as a tool for mimicking real-life scenarios and experiences in a safe and controlled environment.
  • Focusing on issues of oppression and the ripple affect it has throughout America's political, educational, and social systems, Dr. Courtney D. Cogburn of Columbia University School of Social Work and her team developed a VR experience that gives users the opportunity to "walk a mile" in the shoes of a black man as he faces racism at three stages in his life: as a child, during adolescence, and as an adult.
  • Cogburn says that the goal is to show how these "interwoven oppressions" continue to shape the world beyond our individual experiences. "I think the most important and powerful human superpower is critical consciousness," she says. "And that is the ability to think, be aware and think critically about the world and people around you...it's not so much about the interpersonal 'Do I feel bad, do I like you?'—it's more 'Do I see the world as it is? Am I thinking critically about it and engaging it?'"
Keep reading Show less

Russia claims world's first COVID-19 vaccine but skepticism abounds

President Vladimir Putin announces approval of Russia's coronavirus vaccine but scientists warn it may be unsafe.

Russian President Vladimir Putin announced coronavirus vaccine at the Novo-Ogaryovo residence outside Moscow, Russia, Tuesday, Aug. 11, 2020.

Credit: Alexei Nikolsky, Sputnik, Kremlin Pool Photo via AP
Coronavirus
  • Vladimir Putin announced on Tuesday that a COVID-19 vaccine has been approved in Russia.
  • Scientists around the world are worried that the vaccine is unsafe and that Russia fast-tracked the vaccine without performing the necessary phase 3 trials.
  • To date, Russia has had nearly 900,000 registered cases of coronavirus.
  • Keep reading Show less
    Scroll down to load more…
    Quantcast