This article first appeared in Vermont Woman, Feb/March 2011.

Editor’s note: Last month we examined the growing inequality of income in our country and the world and some of the reasons for it. This month, we look more closely at new national and state measures that could make a difference in how we think about economic “progress.”

Linda Wheatley of Montpelier and Ginny Sassaman, from Maple Corner in Calais, live in comfortable middle-class homes in small, closely connected communities—and in a state less affected by the Great Recession than most of the rest of the country.  So why do these two Vermont women, both mothers and self-taught economic thinkers, want to help transform the heart of our current economy?

“We literally ‘bumped’ into each other, out running,” explains Ginny about their initial accidental meeting. Linda, who had directed leadership programs with Vermont’s Snelling Center for Government, and Ginny, a trained mediator, found they were reading similar books; they had similar “weird” interests. Both had learned of Bhutan, a tiny country in the Himalayas, whose young king had declared in 1972 that “Gross National Happiness is more important than Gross National Product.”  More used to the U.S. economy’s depressions and recessions, they were excited to wonder.  Was there another path?

What exactly was the Gross National Product? It seemed important they learn. The two women formed a small study group that met weekly in Ginny’s kitchen. Within a year, they and a small group of like-minded recruits had named themselves Gross National Happiness-USA and organized an international conference held at Burlington College in Sept. of 2010.

Attended by 120 people interested in similar questions, the conference was sponsored by diverse players, including Vermont’s Peace Academy, the Vermont Community Foundation, the Gund Institute for Environmental Economics , Winooski Hydro. National Life Insurance, the Peace and Justice Center and the Morrell Family Foundation. With help from Tom Barefoot of Universal Microsystems in Waitsfield, another kitchen-table economist, they created a new webpage to make connections with others interested in a happier economic system. http://www.gnhusa.org/

The organization’s name, Gross National Happiness (GNH-USA), both echoes and challenges our country’s main economic measurement. Not only Linda and Ginny, but a growing number of economists worldwide, have come to believe the national accounting system has badly misled us. While numbers grow exponentially without limit, the earth’s resources remain finite. “For me, it’s urgent,” said Ginny. The present economic system is chewing up the environment….our children and grandchildren will pay a big price if we don’t find something that can resonate with people. People intuitively respond to the idea of happiness.”

Yet the necessity of “growth” to work an economy is at the heart of the GNP’s economic assumptions. It is a heart one might rightfully call black, because GNP counts nothing but money. And it counts money not at all in the way you might in your own checkbook. Eric Zencey, of Montpelier, a history and politics professor with Empire State, also took part in that Calais kitchen group and now serves on the board of GNH. At the fall conference, he explained the Gross National Product (GNP) literally adds up every dollar spent in the U.S., even the ones most of us would count as a debit.

If it costs someone money, then it counts as a plus in GNP. By contrast, work done out of integrity or love, as a caring family member, or a community volunteer, doesn’t count. The GNP cares only about money and it never ever subtracts. For example, cleaning up Katrina’s disaster, rebuilding, expending emergency help, rescuing, all counted as a boon to the GNP. Likewise, the high U.S. prison-incarceration rate raises GNP, though most Americans would tend to believe the cost of the highest incarceration rate among advanced industrial nations indicates some sort of social dysfunction. Shouldn’t it be a debit?

“Imagine doing this with your checkbook,” said Zencey at the organization’s first conference in Burlington last fall:  “Your paycheck is a deposit; but so is your mortgage bill and your electric bill—just add it all up like they’re all a plus. That’s what GDP does. It measures the commotion of money.”

That in itself is crazy. But wait a minute. Did Zencey just say G-D-P? What happened to GNP?

They’re related. GDP stands for Gross Domestic Product, another term used in national accounting systems, and used much more commonly than GNP since the 1990s. Nobel-prize-winning economist Joseph Stiglitz explained the change from GNP to GDP to an audience in NYC in 2008. http://www.youtube.com/watch?v=QUaJMNtW6GA

I’ll paraphrase: While GNP measures the incomes of the people of any nation, GDP more neatly measures the nation’s aggregate product. It leaves out the details of income disparities between the rich and the poor. In the 1990s it became clear economic activity in a nation didn’t necessarily stay in a nation. GDP became the more favored number. In some cases, the GDP of a nation can go up, while the incomes of most people go down.

Here in the U.S. since 1980, the GDP per capita income has gone up 67%, but the median income has gone up only 15%.  Most of our aggregate gains have gone to the wealthiest 10% of Americans, and the same is true of China, now the second largest economy, with a median income ranking 62nd . So there is a political edge to these national accounting issues. It doesn’t pay to remain ignorant of them.

IN THE RED

Linda and Ginny and their kitchen cabinet set out to discover how an economy in the black works. But more importantly, they also wanted to learn how economies can operate in the red—meaning not the red of accounting books’ debits, not the red of yours and my checkbooks—but the living red color of human hearts. What is an economy for, after all, if not for people’s well-being?

They learned they were not alone in asking this question. Economic thinkers all over the world are arguing a large change in our point of view is needed. They found themselves in alliance not only with the King of Bhutan, who has created a whole government department for measuring his country’s happiness, but with the conservative President of France, Nicholas Sarkozy. Sarkozy appointed two Nobel-prize-winning economists, Joseph Stiglitz and Amartya Sen, to devise new measurement methods this year, a report published in December of 2010. http://www.stiglitz-sen-fitoussi.fr/en/index.htm

Interestingly, the commission included recognition of the suspicion of “official statistics” for many of us:

[T]here often seems to be a marked distance between standard measures of important socio economic variables like economic growth, inflation, unemployment, etc. and widespread perceptions. The standard measures may suggest, for instance, that there is less inflation or more growth than individuals perceive to be the case, and the gap is so large and so universal that it cannot be explained by reference to money illusion or to human psychology. In some countries, this gap has undermined confidence in official statistics (for example, in France and in the United Kingdom. only one third of citizens trust official figures, and these countries are not exceptions), with a clear impact on the way in which public discourse about the conditions of the economy and necessary policies takes place.

GDP’s reports of “growth” in the face of continued job loss, dropping home values and shrinking retirement funds turns citizens into cynics.  Stiglitz commented on why expansion of national measurements and greater transparency would make a difference shortly before he headed up the French commission, saying: “The reason I’m interested in this subject is that accounting affects behavior. In the 1990s, we had bad accounting and as a result we had bad behavior. Information affects behavior. It affects what we strive for.”

Similarly Ginny and Linda talked about the ways we can’t see, until we start measuring. Linda said it neatly, “What you measure is what you get,” and Ginny illustrated what she meant in personal terms. “When gas prices went up, all of a sudden, we were all interested in seeing what cars got better gas mileage. We looked at the stickers on cars. When I go on a diet, I start looking at calories and the labels on food packages measure how well I am doing.  That can help guide my decisions.”

Different data gathering could help state and national decision-making.  GNH-USA has adopted “four pillars” of commitment, similar to Bhutan’s. These are: equitable and sustainable socio-economic development; the preservation and promotion of cultural values; the conservation of the natural environment; and good governance. Some data is already being gathered in these areas, but thinking more systematically about cooperation and a goal of happiness for Vermonters could expand that data base and give a fuller picture to apply to state and national policy-making. (See sidebar for how Vermont and others are already gathering data.)

For now, GNH is organizing working groups, aimed at sharing what they’ve learned. They also would welcome facilitating what they’re calling, “Happiness Circles,” aimed at simply getting people together to talk about what it means for them. “We’d love for people to get in touch with us, and be involved however they can,” said Linda. “We’re hoping that this path into economics will appeal to women, too.”

“One of the things I find personally rewarding,” admitted Ginny, “is just thinking more about happiness. I’m not so sure we know that much about it.”

Perhaps we haven’t been encouraged or reminded to think about it often. We take for granted Thomas Jefferson’s bold argument for our American right to “life, liberty and the pursuit of happiness.”  The last important American politician to bring GNP’s absurdity to Americans’ attention for change was Robert Kennedy in 1968.  Kennedy spoke at the University of Kansas, saying:

“[For too long] we seem to have surrendered community excellence and community values to the mere accumulation of material things. Our gross national product—if we should judge America by that—counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman’s rifle and Speck’s knife*, and the television programs which glorify violence in order to sell toys to our children. (*note: Charles Whitman, a student at the University of Texas killed 16 people from a tower on campus in 1966; that same year Richard Speck murdered eight nurses.)

“Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country: it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans.”

Without much media attention, the state of Maryland recently adopted new accounting measures called the GPI, or Genuine Progress Index. They will gather wider data on the well-being of its citizens and natural resources and their measures will include women’s and men’s non-monetized work now impossible to see and value.

“Women have willingly gone the uneconomic path,” mused Ginny as our interview closed, “because taking care of people, children, the elderly, is emotionally such satisfying work.”

“Women traditionally live longer, too,” answered Linda. “I wonder what we might find about correlations between longevity and happiness?”

In other words, GNH-USA hopes to see Vermont join Maryland in asking some interesting questions, and lead our nation in a more inspired, creative and happy economic direction.

Contributing editor, Rickey Gard Diamond, lives and writes in Montpelier. In 2008, she presented on economic language at NOW’s Conference for Women’s Economic Empowerment in Atlanta. 

Want to find out more?

Bhutan has made happiness its economic goal since 1972. The Centre for Bhutan Studies has made the country’s statistical methodologies available at conferences and a website. This link discusses indicators, or how information can be gathered to reveal changes over time.  http://www.grossnationalhappiness.com/screeningTools/screeningTools.aspx

Our neighbor Canada has become a leader in the west for gathering a wider range of economic data. Not bold enough to hope for happiness, they have created a database they call the Canadian Index of Wellbeing; “Measuring What Matters.” Visit their web page to see the areas of data-gathering they’re examining; Britain begins a project this year.  http://www.ciw.ca/en/WellbeingAroundTheWorld.aspx

The Gund Institute at UVM, under the leadership of Robert Constanza, has already conducted a study of Burlington and Chittenden Country (from 1950-2000) and estimated its status using the Genuine Progress Indicator (GPI), the methodology which Maryland adopted in 2010. It was published in 2004 in Ecological Economics to demonstrate the feasibility of such analysis even at a local level.  http://www.uvm.edu/giee/

The state of Maryland is the first state to adopt the Genuine Progress Index (GPI) as an additional measure to augment GDP. Here’s how it works.  http://www.green.maryland.gov/mdgpi/whatisthegpi.asp

In December Britain’s conservative Prime Minister David Cameron charged the Office of National Statistics to begin collecting data on well-being. The New Economics Foundation, based in Britain, has long urged this, and twice compiled reports they call The Happy Planet Index, examining 143 countries and 99% of the world’s population.  As Time Magazine reported: “How does the U.S. fare in HPI terms? Not so good. It sits pretty far down the list at 114. The U.K. is 74, behind Germany, Italy and France. Topping the chart is Costa Rica, which has long life expectancy, high life satisfaction, and a per capita ecological footprint one-fourth the size of the U.S.”

Read more: http://www.time.com/time/business/article/0,8599,1957746,00.html#ixzz19nv11RVo

Or go directly to the source:  http://www.happyplanetindex.org/

The U. S. has funded new statistics as well, though its politics raise questions. On page 562 of Obama’s Healthcare bill is a provision for Congress to oversee development of 300 “key national indicators.”  On Dec. 16, Congress appointed an 8-member commission with backgrounds ranging from conservative politics to preventative medicine. The commission will collaborate with the Academy of Sciences in a “public-private partnership,” using $70 million of our tax-dollars, yet only one woman, Marta Tienda, a sociology professor from Princeton, will serve and they’ll use private funds as well. Called The State of the USA, this not-exactly grass roots or woman-populated effort is expected to post indicators this summer.  http://www.stateoftheusa.org/  Will they include Mother Nature and Your Momma?