The following proposal was presented by Mark Anielski to billionaire George Soros at the World Economic Forum in Davos, Switzerland January 27, 2011

A New Genuine Wealth Accounting System for Nations

by Mark Anielski

Buckminister Fuller once noted said “One must make a new system that makes the old system obsolete.” It is time for a complete overhaul of our national accounting systems and how we measure progress. A new accounting system is required that will measure the conditions of well-being that makes life worthwhile for humanity and contributes to genuine happiness and a good life. This requires wisdom and courage.

What am I asking? The financial and human capital support to experiment with the practical implementation of the Genuine Wealth accounting system for communities, governments and business in countries like Tahiti, the Netherlands, China, Canada, Norway and other nations who have already expressed interest in taking the next step towards building economies of well-being and enduring happiness.

I believe it is time for virtuous actions and a new form of genuine capitalism with a heart and wisdom. We need to make bold efforts in the restructuring of the global economic architecture, that makes the old system (born during World War II) obsolete and begins to measure and manage what matters most to people. I believe it is possible to re-engage the minds and hearts of all of humanity by designing a new global accounting system for measuring the well-being conditions that are relevant to the values of China, Russia, the U.S., Tahiti or Pakistan.

As a professional economist, professor of business ethics, and author of The Economics of Happiness: Building Genuine Wealth (2007, New Society Publishers) I have laid out a road map towards building a new accounting system for measuring and managing the well-being conditions in communities, businesses and nations. I have called this system  Genuine Wealth, which literally means measuring the conditions of well-being in accordance what we value most in our hearts. I have advised municipal and national governments and corporations in Canada, China, the Netherlands, Austria and the US and Austria on how to implement the Genuine Wealth accounting system. It has resonated intuitively with many because of its common sense and practicality.

The Genuine Wealth accounting system is a tool for communities and organizations to begin to inventory the assets that contribute most to their well-being. The indicators of well-being and progress, in order to be genuine, must be aligned with the values of a community and what citizens consider most important to their quality of life.

The Genuine Wealth accounting system includes a new balance sheet that accounts for the assets and liabilities of five capitals: 1) human capital = people; 2) social capital = relationships; 3) natural capital = natural resources and the environment; 4) built capital  = infrastructure; 5) financial capital = money. This includes indicators of well-being that are both objective and subjective.

The system I have designed also includes a full cost monetary accounting of all public and private investments in order to evaluate the ‘returns to well-being’ that result from the investment of time and resources into improving and sustaining the integrity of the five capitals of a nation or community or business.

How will genuine progress be assessed? Genuine progress is achieved when all five core capital assets are in harmony and in a resilient and flourishing state. But most importantly, genuine progress will be seen by the joy on people’s faces and their  experience of genuine happiness. By genuine happiness I mean Aristotle’s original definition of eudemonia meaning: “A sense of well-being, resulting from achieving excellence in the fulfillment of one’s functions.”

I also envision a day, not too far off, when the creation of money could be guided by Genuine Wealth accounts at a regional, national or international scale. Imagine, money created in parallel with the need to sustain the integrity of the five capital assets of nations. This would give new life to not only economics but also finance and other disciplines.

The Genuine Wealth accounting is the next big and audacious idea for the salvation of economics. It would engage thousands of young economists, accountants and business graduates to redesign how we measure progress and allow politicians and business leaders to govern with greater wisdom and in alignment with the intuitive sense of citizens that the economy should enable the pursuit of genuine happiness.

In the absence of complete national balance sheets that track the real wealth of nations, a new accounting system is required that can track the conditions of well-being (the original definition of the word wealth) that contribute most to the physical, mental, emotional and spiritual well-being of millions of human souls.

Economics is failing humanity, in part, because it has lost touch with the original meaning of the word economy, which from the Greek is concerned with the wise management of the household. In a real sense we are all economists. Economics has forgotten that its primary concern must be the conditions of well-being of the household. It is no longer genuine.

Economists have forgotten the meaning of words like wealth, which originally meant , ‘the conditions of well-being’, in the 13th century Old English Moreover, the word value, generally associated with money, comes from the Latin (valorum), which means ‘to be worthy or strong.’ A competition comes from the Latin (competere) meaning ‘to strive together.’

Robert Kennedy in 1968 said that the GNP, key measure of economic progress, has failed to measure the things that actually make life worthwhile. And Simon Küznets, one of the key architects of the national income accounting system, noted that “national income concepts will have to be either modified or partly abandoned, in favour of more inclusive measures, less dependent on the appraisals of the market system.” And John Maynard Keynes, near the end of his life foreshadowed our situation today noting “The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems — the problems of life and of human relations, of creation and behavior and religion.”

Joseph Stiglitz has stated clearly that “GDP has failed to capture the factors that make a difference in people’s lives and contribute to their happiness (security, leisure, income distribution and a clean environment.” The Dalai Lama has said that ‘we need an economic system that enables the pursuit of true happiness.’ Bhutan is already pioneering a new well-being accounting system with their Gross National Happiness framework. We need more leaders like Bhutan’s Prime Minister Jigme Yoser Thinley who states unequivocally “In Bhutan personal spiritual fulfillment is not just a spiritual pursuit, it is government policy. My role is to help create conditions that will help our people find happiness.”

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