Making space for well-being

“There is a paradox at the heart of our lives. As Western societies have got richer, their people have become no happier” (Layard, 2005). Layard has not been alone in questioning the relationship between economic growth and well-being. Theoretically, empirically and politically, there is an increasing amount of dissatisfaction with growth as the main indicator of well-being. As part of this dissatisfaction, there is a renewed interest in analysing the institutions and conventions through which the economy and society are measured and understood. The wealth of nations—and for that matter, regions and cities—has traditionally been assessed in terms of some measure of output, consumption or income, such as Gross Domestic Product (GDP) per capita or Gross Value Added (GVA). Such official measures of national monetary wealth go back to the early part of the 20th century. The major thrust for the creation of modern national income accounting came with the economic crisis of the Great Depression, the military conflict of World War II and the emergence of Keynesian economics and policymaking. These conventional metrics have long been used to gauge the pace and scale of economic growth and to compare one nation’s (or region’s) prosperity with that of another. Important and revealing though such traditional measures are, it has long been recognized that per capita GDP or GVA or average incomes exclude some key ‘non-market’ factors and activities that may not be easily measurable in monetary terms but which nevertheless play a major role in shaping the quality of everyday life. They therefore not only contribute to an individual’s and society’s sense of ‘well-being’ but should also be taken into account when measuring national ‘prosperity’ or ‘output’.