In 2007 I published my first book titled the Economics of Happiness; in 2018 I published a second book called An Economy of Well-being to reflect on over 10 years of experience in trying to implement the Genuine Wealth well-being accounting model and protocols. The success of the idea of measuring happiness and well-being has exceeded my wildest expectations for success. In 2008 I began to see the happiness wave rising like a tsunami; in a matter of months book shelves began to be filled with the happiness theme. Now in 2021 a new wave is building; a well-being economy wave perhaps as a result of the Covid-19 pandemic which has given us pause to count our blessings and to realize the real secret of a good life and happiness are relationships, belonging and trust. We miss giving each other hugs and getting packages from Amazon won’t satisfy our souls deepest desire for genuine human love and joy.
I have argued that “We need a new accounting system and indicators of well-being that help individuals, businesses, communities and nations measure their genuine wealth –natural, human, social and built (physical) capital assets that are the corner stones of human well-being,”
In 2011 I helped co-found Happiness Solutions Inc. with 10 others mainly from Alberta. Our mission was to build happy lives.
Then in 2012 I helped co-found Genuine Wealth Inc., an Edmonton (Alberta)-based cooperative business enterprise with a mission to help individuals, businesses, organizations, municipalities, provinces/states and nations to build and operate communities of well-being using the Genuine Wealth model.
My main critique was the shortcomings of GDP as a measure of progress? For over 60 years, we have been using an accounting system for measuring economic progress called the Gross Domestic Product (GDP) that tracks all money being spent on goods and services in the economy. This might be a good accounting of cash flow but it fails to measure the actual things that makes life worth living (including our happiness and state of well-being), as Robert Kennedy noted in 1968 when critiquing the GDP.
The Economics of Happiness challenged world leaders to consider a new accounting of progress and a new economic paradigm based on well-being and happiness. I called this system Genuine Wealth.
What is genuine wealth? Genuine Wealth is a model for measuring and managing the overall well-being and happiness of a community or organization by explicitly accounting for the assets (human, social, natural, and manufactured or physical) of a community or organization that are linked to individual and societal values and aspirations for a good life.
Genuine means to live authentically, in accordance to the values that make life worth living. Wealth is much more than financial and material things; the word comes from the 13th Old English meaning ‘the conditions of well-being.’ Therefore Genuine Wealth is about accounting for the things that truly make life worthwhile.
Measuring what matters most to the happiness and well-being of people’s lives will require not only new metrics of progress but a new economic system that focuses less on growth and more on improving well-being.
This new economy of well-being and happiness was proposed by Bhutan’s Prime Minister Jigme Y. Thinley on April 2, 2012 at a special UN meeting in New York. Bhutan has adopted the Gross National Happiness measure of progress as an alternative to the GDP. Bhutan is the first nation in the world to have adopted the Gross National Happiness measure of progress.
Genuine Wealth is the accounting system that will become the international standard for measuring and managing the real well-being of communities and nations.
In Alberta, I led a team of economists in 2001 in the research and development of the Alberta Genuine Progress Index (GPI) in 2001, a new accounting system that measured the changes in economic, social and environmental well-being, using 51-indicators of well-being. We showed that between 1961-1999, while Alberta’s GDP increased by over 400 percent (4.4 percent per annum) the Alberta GPI Well-being Index declined by almost 22% (0.5 percent per annum decline). This demonstrated that a rising tide of GDP did not result in raising the well-being of all Alberta households.
This work demonstrated the capacity to show the balance between explosive economic growth due to natural resource assets and Alberta’s overall state of well-being and the general happiness. We showed pointed out the shortcomings of our current accounting system whereby municipal, provincial and federal governments, despite having an abundance of natural capital assets, operate without a balance sheet that tracks the state and quality of these assets that contribute to our economic well-being.
In a similar study for the City of Edmonton in 2009, we showed that while Edmonton’s real GDP grew by 76.2% between 1981 and 2008 (or 2.8% per annum), the Edmonton Wellbeing Index — a composite index of 48 economic, social and environmental indicators — rose slightly in the early mid-1980s, peaked in 1983, then declined steadily hitting a low in 1998, with a steady recovery ever since.
GDP is not the be all and end all of economic success. There are other ways to measure the progress of a society. Using the Genuine Wealth accounting model it is possible to account for the well-being of three sorts of capital:
- built or physical (infrastructure and the means of production)
- human (wellness, skills and education)
- social (relationships, belonging, trust) and
- natural (oil, gas, minerals, forests, soil, water)
While the first three are renewable, natural resources such as fossil fuels, soil, biodiversity, and even forests may be depleted, sometimes permanently.
The United Nations is now proposing the “Inclusive Wealth Indicator” as a challenge to the myopic focus on short-term profits and economic capital inherent in GDP. The Inclusive Wealth Indicator, which is scheduled to launch later this year, captures economic growth as the aggregate of a country’s wealth including its natural resources. In its early findings, it found that natural capital declined 46% in Brazil and 31% in India during the last 17 years. This reduced the countries’ blazing GDP growth rates to a more modest “inclusive wealth” increase of 3% in Brazil and 9% in India.
The Genuine Wealth model and accounting system was formally launched on May 10, 2012 with the incorporation of Genuine Wealth Inc.
Genuine Wealth accounting and analytics will help communities, businesses and countries account for their overall economic, social and environmental well-being in the form of a new and genuine balance sheet.
This way the real wealth of nations can be measured in relationship with what people most value about a good life.
The well-being economy theme has begun to grow across the world from New Zealand, to Iceland, Finland and now Canada, especially amongst First Nations who understand the essence of life is the strength of relationships we have with each other and nature.
My goal is to provide individual, businesses, communities and national governments with practical tools for the regular assessment, reporting and enhancement of their real wealth, to create productive, resilient and happy communities of well-being