When people talk about economic growth or the strength of the economy, they are often talking about the rate of growth of the gross domestic product (GDP). The GDP is a primary measure of a country's overall economic output. It is the market value of all final goods and services made within the borders of a country in a year. For example, the GDP includes:
- The costs associated with growing, harvesting, transporting, storing, and processing tobacco.
- The costs of manufacturing, distributing, advertising, and retailing cigarettes and cigars.
- The costs of doctor’s visits, medications, hospitalizations, and chronic care treatment for smoker’s cough, emphysema, and lung cancer.
- The costs of FDA tobacco regulations and tobacco-related law enforcement costs.
- Tobacco-related litigation costs,
- The costs of advertising health warnings.
- The costs of anti smoking campaigns and stop smoking programs and products.
Destruction caused by natural disasters such as hurricanes, earthquakes, and tsunami, actually increase the GDP because the required reconstruction work is counted as economic activity. Inferior products, such as automobiles that quickly become obsolete or require extensive service and repair, increase the GDP because the costs of repairing and replacing them are included economic activities. The old, expensive slow computers used in the 1980s each contributed more to the GDP than today’s fast, powerful,and inexpensive computers simply because the older computers cost more. Junk food contributes to the economy as much as it adds to our obesity because of the increased healthcare costs it often leads to. Many foolish and wasteful activities contribute to increasing the GDP and our narrow measures of economic growth.
An emphasis on more, including increasing the GDP, growing the economy, and a relentless focus on increasing stock prices has brought us: the subprime mortgage crisis, housing foreclosures, Enron and other accounting scandals, wars, hydrogen bombs and other nuclear weapons, the Holocaust and other acts of genocide, slavery, traffic jams, urban sprawl, the bridge to nowhere, wide-spread cheating, Vioxx and other dangerous prescription drugs, Twinkies, obesity, stress, anxiety, class struggles, pollution, paparazzi, deforestation, strip mining, overfishing, drought, failed states, global warming, and other waste, violence, destruction, and misery. We have become consumed.
But what if we had the wisdom to shift our focus to what is truly most meaningful in life? What if we decided we had enough of the old thinking and decided to value: peace of mind, integrity, tranquility, clean air, clean water, the beauty of nature, a healthy environment to enjoy now and sustain for the future, awe, family, friendships, community, safety, stability, trust, leisure time, joyful play, meaningful work, authentic experiences, reciprocity, respect, good health, reduced stress, ongoing education and learning, deeper understanding and appreciation, fun, enjoyment of the arts, transcendence, and making significant contributions that help others. We can enjoy what is already available to us.
Adam Smith never imagined how greedy the invisible hand would become. It is time to change our focus from economic growth to growth in human well-being.
The relationship between money and happiness is complex. The basic economic assumption that well-being increases with income is being challenged. In the essay How much can money buy happiness? Is the debate over for the Easterlin Paradox? Chris Albor reports that happiness increases with income until per capita GDP reaches a level around $15,000 per person at which point happiness levels off and does not appreciably increase as income increases. Another study showed people's day-to-day emotional well-being only rose with earnings up to an annual income threshold of $75,000. Increasing average incomes brings diminishing returns of happiness, but not less happiness. Also, peoples’ quality of life and longevity is affected by relative rather than absolute income.
A recent survey by the Gallup World Poll found that while overall life satisfaction does increase with income, positive feelings also depend on other factors, such as feeling respected and connected to others.
An August 2010 Scientific American article on how best to spend money reports that money may actually impair our ability to enjoy simple pleasures. However, spending money on a variety of well-chosen activities that provide rewarding experiences including personal growth, deepening our connections to other people, and other ways that allow us to savor the pleasure can increase our happiness.
Perhaps we can turn our attentions away from narrow indicators of economic growth and focus on the broader pursuit of happiness. We can learn to cope better with abundance. It certainly seems like a wiser path.