An obsession with wealth
If instead of counting our money, we'd been considering our happiness, might the nightmare on Wall Street have never happened? If governments had been thinking about well-being rather than wealth, could we have avoided the global financial crisis?
These are questions posed in a provocative new report [3.16Mb PDF] from a panel of experts including no less than five Nobel prize-winning economists - Joseph Stiglitz, Amartya Sen, Kenneth Arrow, James Heckman and Daniel Kahneman.
The brains had been assembled by President Sarkozy of France last year in the hope that they might come up with a better way of measuring social progress than simply looking at GDP.
Their conclusion on the credit crunch is that "the crisis is teaching us a very important lesson: those attempting to guide the economy and our societies are like pilots trying to steering a course without a reliable compass".
Some members of the "Commission on the Measurement of Economic Performance and Social Progress" (CMEPSP) went further.
"They believe that one of the reasons why the crisis took many by surprise is that our measurement system failed us and/or market participants and government officials were not focusing on the right set of statistical indicators. In their view, neither the private nor the public accounting systems were able to deliver an early warning, and did not alert us that the seemingly bright growth performance of the world economy between 2004 and 2007 may have been achieved at the expense of future growth."
They argue that some of the boom was a "mirage"; profits based on a bubble of inflated prices; an economic success story that proved to be nothing of the kind. Panel members speculate that "had we had a better measurement system" then "governments might have taken early measures to avoid or at least to mitigate the present turmoil".
What all the commissioners agree on is that "the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people's well-being".
I have spent the last day or two preparing a report for tonight's News at Ten on whether, a year after the collapse of Lehman Brothers, there is any evidence that our values have changed.
Remember those claims that when the unsustainable bubble of consumerism went pop, we would emerge less self-absorbed and materialistic? I wanted to know whether there was any evidence that people were thinking harder about well-being and less about "stuff".
Because, if the CMEPSP is right, governments should change the way they think about progress. And that will only happen if they think voters can be convinced to think the same. In the heart of the City of London, I found myself in the middle of an open-air market. It wasn't selling fish or potatoes. "Fractional Life" was wooing bankers with the opportunity to own a share in a private jet, a racehorse or a sports car.
The organiser explained, that for the right money, I could have the equivalent of an Oyster Card for a "PJ". Like the fare system on London's tubes and buses, investors can swipe their personal jet card in and out when they use the Lear.
I sat in a shiny, silver Ferrari and talked to a man who thought the death of conspicuous consumption was some way off yet. The young tyros emerging from the mirrored cathedrals of capitalism would, he told me, be just like their predecessors in the 80s. Once the storm clouds of recession had lifted, it would be foot down on the throttle. Sunny days will be here again.
The academics in Paris yesterday suggested a rather more multi-dimensional social weather report. Yes, wealth, consumption and income are important, but if we want to understand how our society is progressing, we need to think about our well-being in other ways at the same time.
Health and education; how we spend our time at work and play; whether we have a political voice and enjoy good governance; the quality of our social connections and relationships; the environment both now and in the future; our insecurity, economic and physical - all these things are aspects of well-being which must be considered simultaneously in order to get a handle on how a society is progressing.
Turning all these aspects of our lives into one simple measure is an enormous challenge. It may even be impossible but, as we ponder the unhappiness that flows from the global financial crisis, President Sarkozy's Commission suggest we give it our best shot.
"Had there been more awareness of the limitations of standard metrics, like GDP, there would have been less euphoria over economic performance in the years prior to the crisis; metrics which incorporated assessments of sustainability (e.g. increasing indebtedness) would have provided a more cautious view of economic performance", argue some of the panel.
In the shadow of city sky-scrapers along the East End's Whitechapel Road, I met shoppers avoiding showers. Had they been changed by the credit crunch? Not one bit. They'd had to tighten their belts a bit but when things improved, it would be business (and shopping) as usual.
There are some who like to interpret the little good data we have on public attitudes to the recession as evidence that we are much more concerned about inequality. We are less tolerant of bankers' huge bonuses and more sympathetic to those surviving on welfare, according to the Fabian Society.
But I wonder whether this is wishful thinking - a bit of focus group work dressed up as real public support for a High Pay Commission and the redistribution of wealth.
An Ipsos MORI survey question asked in 2006 and repeated after the credit crunch suggests little has really changed.
It is hard to unpick the permanent from the temporary. All recessions change the way we spend and save. It also brings many people into closer contact with others who are unemployed or on benefits making us, for the moment, more sympathetic.
But the idea that the global economic system's flirtation with disaster has made us reconsider what really matters in life - I think the evidence is pretty thin.
That being said, if the giant brains behind the CMEPSP could convince governments to employ more sophisticated measures of social progress, maybe that might feed into our consciousness and we would see a lasting change in our priorities.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~10~RS~)
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All this utopian rubbish about appreciating other forms of well-being other than financial security - tell it to the mllions unemployed and the millions living below the poverty line. The UK surely has more important priorities than this kind if idealistic nonsense. Caledonian Comment
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it does seem that the way to happiness these days is through money and it shows how shallow people have become in this materialistic world we live in.
GDP alone shouldnt be the be all of a countries expression of happiness GDP should be what it is that is a measure of productivity and wealth.
my parents had a saying that was better to be hard up and happy than overly in debt and struggling, something many governments have not seen in recent years.
governments including our own in reality lost the plot and committed the countries they represent to massive debt becouse of the need to have more than others, thus we are overly in debt and very unhappy.
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It was about time the philosophers speak up, everyone else has. If people were good it would be a better world, great conclusion. Maybe hanging some of the political gate-keepers and bankers would have had an impact. This had nothing to do with calculation of GDP, it was about greed and influence with weak governments unable or unwilling to stand up to the banking interest. It is hard to believe that anyone would propose that the problem was with the data. It is difficult to watch this process and know that no names will every be attached to downfall, no politicians who blocked financial oversight refrom, no bankers who knew that unsecured loans to unqualified borrowers would fail. If their mother's had raised them to be better people is a more likely cause. In 5 thousand years of civilized society we have yet to figure out how to get along or how to govern without abuse. As we have watched economist, politicians and the financial industy fumble along, mainly attempting to cover their tracks and rewrite history, the only thing to be learned is that powerful people can be both unethical and incompetent.
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When Thatcher said "there is no such thing as a free lunch" I guess she screwed up thinking processes for generations to come. For a woman who preached Victorian values she should have remembered all the philanthropists who contributed to raising the quality of life just a little for the poor. Were these not the equivalent of "free lunches"?
There is a programme on TV which I have heard is quite popular called the "Secret Millionaire" or something that kind of plays into a similar twenty first century repetition of the same game. Tears of gratitude and a lot of emotion that comes from standing close to someone who "cares and shares" if only for a relatively short moment. But the reality of our tortured progress towards a more comfortable world is that we do not know whether that comfort should be within us or without us.
That is the tragedy of allowing money to develop a "status" of its own - "it isn't the hand that holds the note that matters, it is the colour of the note". If we could feel the hand and the note and understand the blood, sweat and tears that have attached themselves to their memories then maybe we wouldn't be quite so eager to touch them or even be a part of their lifestyle.
As #1 puts it so succinctly, there is such a huge gap between the haves and the have nots that for many somewhere in between the battle is not to sink any lower. But the problem with our path is that we are never going to find real comfort outside ourselves even with all the money in the world, and if the "top" ain't happy then God help all those below.
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Mr Easton
re, Panel included very bright people... Nobel prize winners... and they concluded that "...seemingly bright growth performance of the world economy between 2004 and 2007 may have been achieved at the expense of future growth..." plus your own "...some of the boom was a 'mirage'; profits based on a bubble of inflated prices..".
Wonderful! How clever of Msr President Sarkozy's "..brains..".
Anyone of the 'market participants and government officials' or President Sarkozy's "..brains.." ever read a relatively straightforward tome titled, The History of the South Sea Bubble?
Oh dear me! Faux pas Mondiale par excellence!
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Happiness is very strongly influenced by money if you have relatively little, but over about $20k pa, extra money helps though not nearly as strongly. (Based on studies reported in Richard Layard's book "Happiness - Lessons from a New Science".)
Over this $20k threshold, it seems we want to have as much or more than our neighbours, rather than necessarily as much as possible.
Moreover, it seems that lots of other factors have a much bigger effect once you have reach this point (and in some societies well before then) - primarily the quality of relationships, useful and stimulating work, and generally doing "good" / beneficial things for others.
So endless wealth isn't necessarily beneficial, and nor is it realistically possible - how can everyone be rich? Moreover, given that the world's productive resources are finite (e.g. land, oil reserves), continual growth of wealth based on endless material consumption as per the last century is simply not possible.
So it may well be that these kooky old Nobel prize winners are right, and we do need to find a better way to make it all work for ourselves and our 6 Billion fellow travellers. NB As I understand it, "making it better" includes reducing poverty and does not exclude trade and economics.
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Mark, I think you share the problem that our society and our leaders have: an inability to distinguish between wealth and money.
Wealth is whatever human beings value, and that can include happiness. Money is an arbitrary unit that can be exchanged for wealth. The problem lies not in our love of wealth, but in our values - i.e. what we consider wealth to be.
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Most people are only ever content if they are convinced that they can eat when they're hungry, sleep when they're tired and play when they're bored. Free-market, consumerist economies only allow this level of freedom to a select few which is why they are so undemocratic. They aren't one man, one vote they are one dollar, one vote. Those with the most dollars have the most votes. And the concerns about where the next meal is coming from or whether one can keep a roof over ones head do not register with the top ten percent of doller-holders. Their only concern is haveing a simple yardstick to 'prove' they're better than everyone else. But since they wield so much power and have created a set of rules that ensure the majority of people cannot compete maybe it's time to remember that the rest of us outnumber them hugely then all go round theirs to have a word.
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Nice bit of hindsight. If I recall, "progress" until the late 1970s was about quality of life. You worked because you need to live. The aim was a 35 hour working week; Saturday and Sunday off; compassionate leave and "conventional" absence (dentist, doctor, etc); National Health service. Houses were built to the Parker Morris standards. Debt was limited to mortgages and personal loans for specific things. You usually had to see the bank manager who would rock slowly in his mastermind chair looking at how much your total outgoings came to and keeping you in suspense for a while. Customer service was customer service. Every town had a shop front for the electricity board, gas board, water rates, etc.
Then came Thatcher and Reagan and all that was scotched. The new order was "You live to work". Soon, all those niceties we'd worked to get for the past 100 years were scrapped. Public utilities were privatised when it's patently obvious that a single, centralised body could handle them more efficiently - it was a question of finding suitable management, not that privatising is actually more efficient. How can it be when we have 20 authorities with 20 boards of directors and attendant staff, 20 computer systems and administrative hierarchies instead of 1. But by cutting customer service beyond the skeletal, the illusion of efficiency can be waved about.
Mortgages were fine in those heady days of paternalistic orgnaisations with whom you could have a career for life if you behaved yourself. Not now. How ridiculous is the current situation? People taking out 25 year mortgages when they can't guarantee they'll keep a job for more than a couple of years, if that. Those same people now sweating under the threat of redundancy, very seriously worried and justifiably. What sort of society is this when the basic securities of survival are under threat? What sort of government will let a population of 60 million get into trillions of pounds worth of personal debt?
So yes, we need new measures and perhaps its time for reappraisal. Unbridled capitalism is unhealthy so we need to strike a balance between welfare and enterprise. Perhaps finding these measures might instruct us on how skewiff the world has become.
This is no new thought, however, George Soros was writing about this in the late 1990s.
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I think William Blake got it about right when he suggested that in order to know satisfaction then one has to have had more than enough.
You can only eat one meal at a time, sleep in one bed at a time, wear one set of clothes at a time and live in one place at a time. So long as you feel that is enough then why worry about anything else.
Consumer society started with the idea of providing equipment to save the user time and to entertain the user in that time gained. In this it succeeded; but it has now gone on to create neurotic urges to possess all sorts or irrelevant articles so that we now have life-style associated brands to which one can aspire. What a load of tosh!
Why buy a Ferrari when a Ford Fiesta will do? The only reason is to stick your wealth into the face of everyone else. But doesn't this just show that it is you that has the problem?
So long as there is enough to go round, why worry? If there isn't enough to go round then the problems kick off. There is enough to go round in this country so why do we have all these problems? Well, it is because some don't have enough and others who do like sticking the fact into the face of those that don't. Pathetic really.
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If governments had been thinking about well-being rather than wealth, could we have avoided the global financial crisis?
The answer, surely, is yes. France's right wing president, Nicolas Sarkozy, has thankfully said the unthinkable - that we ought not to obsess so much about GDP growth when considering what is best for society. If only our leaders would show the moral courage to begin to sketch out a vision of a society which is focussed more on the happiness of its citizens rather than how much they consume, or how much our economic output increases. We must surely not allow the economists and the technocrats in Whitehall and Westminster to resurrect the old paradigm which existed pre-August 2007. It is time for us citizens to engage in a debate about the kind of society we wish to live in.
http://slingerblog.blogspot.com/
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The problem is you can measure GDP but happiness is subjective and measuring it is open to political manipulation. Would any of us believe poiliticians who waved about statisitcs that "proved" we were getting happier? In this country we probably don't need any more wealth but do we need more happiness? What about when happiness confilicts with other needs? Driving fast cars makes many people happy but damages the environment. Making loadsa money makes some happy but leads to inequality that makes others unhappy. Casual sex is what happiness means to some folk but unwanted pregnancies and STD's cause lots of unhappiness. The truth is increasing wealth or happiness is the way politicians justify themselves to us. Why can't they just manage the country like we wnat them to. Defence, law and order, health & education are what we want them to look after but that's not enough for the self-agrandising muppets who put themselves up for election.
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I am not sure what happened to my last comment but I think if people truly want a better society where greed and wealth no longer have the same effect on people's behaviour then everyone should start seriously looking into to the ideas of the people running the Venus project. Society will never change without a completely new idea.
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Excellent contributions from #7 and #9.
#7: With people like you around there is always hope and happiness, and the prospect of a "better way". Thank you for making my day.
#9: As concise a summary of where and how we went wrong post 1979. I am not sure it was quite a rosy before that but I catch your drift and I agree with the culprits you name and the nonsense that was passed off as "our salvation".
It is more the pity that journalists, the majority of whom are not poor, do not pay more attention to what makes people who do not have money wealthy (as per #7). Isn't there a lot to be learned from these people?
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Peoples attitudes will only change when their circamstances do.
We have had a decade of easy to borrow money and not only those growing up in this decade but others who should have known better jumped on the easy to make money property boom.
The true state of the mess we're in has been camouflaged so many are still not aware of what is really happening and go on with life as usual.
There is nothing you can do for these people until they themselves are affected detramentally and have to work their own way out.
Everyone expects a quick fix nowadays even to a recession for many have never experienced such a thing before. They are told that's what they'll get so why worry. Just keep on spending.
Where are all the entrepreneurs like those of the eighties Those who wanted to better themselves by starting their own businesses and not be beholden to working for someone else. Prepared to work hard to build up their own companies knowing they were in it for the long haul and not on some quick moneymaking trip.
Masses of unnecessary legislation has albut killed the entrepreneurial spirit but without it there will not be the new companies to create the employment we will need.
There will always be those with extra drive and initiative who do want the luxuries in life and this should be encouraged. After all anyone with a good idea can do it whether they went to a university ot not.
Perhaps when the ability to make easy money by just living in or selling a house has past reality will set in that the only way to get on in life is to work hard at it. This will be a rude awakening for many of today's younger generation.
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Who is this our you talk about not the people who have nothing but the Govenment is trying to make them take the blame but the upper middle class with there portfolio of houses and blocks of one bed flats for all the rich works of banks and Lloyd s who would be just coming home to sleep, and shower then back to making more money for what? People are conned all the time because they want to be like the class above them in this country when the going was good the media was always showing us how to have more house, clothes, holidays, cars relationships, eating out in posh cafes by celeb chefs all rubbish, Homes became houses to sell on endless proggrams about the Londoner that wants more and the market drops out or the bubble bursts because things go in cycles like the seasons and are uncontrollable humans are not that clever and are slow to mature, having stuff is what the media pushed running around like a headless chicken and now we have programs trying to blame the poor who had nothing to do with it, and how we should not blame those who did it which was Govenment, Banks, Hedge fund managers, insurance companies because they are all joined. Just because you insult peoples intelligence does not mean that they are thick, the Media did a lot of pushing towards the so called credit crunch.
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This comment was removed because the moderators found it broke the House Rules.
The issue is with some people thinking the treasury is their personal bank account. The rich think they can buy security until the hordes come and take it all away from them. No one's safe when people are hungry.
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Ah money ! the item that most people argue about , fight about , clamour for , and die for . when is enough,enough, well it never is enough because we all need cash to live and people trying to make more cash keep moving the goalposts for us ordinary folk , so we never have enough money to enjoy because its always for the essentials of life ... the fun part never gets a look in .
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Reminds me of a quote I heard many years ago,
"Money is like oxygen, it's only important when you don't have any."
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I don't make much money but would like to earn more. Why? Because people look down on me because of how much I earn.
I hate my job and am thinking of quitting, although I do not have another to go to I have no debts and good savings. Again people have told me this is foolish and wrong as if having money that I don't need is a good thing.
Both of these things need to change. I'm qutting next week, care to join me?
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Humanity, what a wonderful invention it was.
What went wrong?
We're social animals, and need to belong. That is our most basic fundamental need in life (ok, apart from oxygen, water, food and shelter), but we all need to belong.
Family
Friends / Gangs
Villages and Towns
Cities, Counties, National Pride - all part of belonging.
When did money become a driving factor? I mean, we don't need money to survive, not really. The modern world means that we need money to obtain the things we need to survive, but money is just that - a means to an end. Who decided that money was to be elevated to the same level of need as those needed to survive?
It wasn't a who, it was greed.
Greed is another fundamental human trait and it is greed we have to thank for the situation we are all in. We were all a part of it, and we are all a result of it, and we will all be a player in next chapter - let's get it right next time around.
How about we recognise the need to live by the money we make instead of putting the emphasis on making as much money as possible to live a life of over-indulgence. I'm not going to advocate communism, because that ethic has had its day and we had a socialist period in this country but it didn't work. I'm talking about the greed aspect - huge salaries, not to mention the bonuses paid out - bonuses so large that each one would pay off a small countries deficit in one hit, or save a third world community from starvation. It's disgusting that we promote a society that applauds opulence.
Living comfortably, within your means, and having a government that follows this ethic to assist people to earn what they need, with a decent quality of life is what is important.
If we can drive society to believe alcohol is evil, I'm sure it's not beyond our means to put greed in the same box.
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I'm not sure people value material things any less but I think people value something intangible a little more - security.
I know people (including myself) who didn't lose their job or any income. But they have felt insecure. Not very nice.
One metric I can see for this is the extent to which these people have spent less and saved more from the same pot of money. Maybe a thousand pounds in the bank makes more sense than a fancy holiday if that high paying job might disapear tomorrow.
We have the stats on savings. Statistics on peoples' perception of the value of security might be interesting.
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My values have not changed. I have, as an adult, always been in charge of my life and take responsibility for my decisions. That makes me happy. We are not all greedy and we are not all irresponsible.
Government, political parties and ever babbling experts should take their heads out of their backsides and just dedicate themselves to getting some basic order in policing and justice, health and education. No-one working full-time should be "unable" to cover their basic needs, or indeed be given more by not working.
I truly do not understand why I should want whatever my neighbour or peer has. Whatever has it got to do with me? And I cannot believe that I am in a tiny minority.
#21 Eviscera, anyone who looks down on you is unhappy. Happy people just get on with their lives, following their interests and helping others on the way. You wont be the first to leave an unhappy job - believe in yourself.
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Dear Moderator, please can you direct me to the page where I change my nickname that got bounced? I cannot for the life of me find it despite following the instructions. I have read the guidelines so I know why it got bounced. Sorry - and thanks. Andrew
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Paul Woolley is an unlikely revolutionary. With sober suit, silk tie and measured, thoughtful delivery, he looks and sounds like a retired City gent. Which is exactly what he also is. He was a banker with Barings years before that banks implosion and...
This was come on in, for an article that was worth the read at 'The Times', a UK paper of some note. The article is here http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6829803.ece
His input and thinking seems to have had an influence upon Lord Turner here in UK, who is in midst of a high level fire storm at this time, being the front line review of corporate reward and remuneration. To expect the limo delivered, multi zero's of City and high finance to roll over or even suspect that they are anything other than gilt edged and should in truth be guilt edged is beyond reasonable hope. These are, at the end of each day, ordinary people, now with fangs bared. Lord Turner needs a li'l more clout, he is sorely abused at the moment.
Now, part of the furore stems from the content of the article and thinking of Paul Wooley, behind it all, he simply points out that the plethoric armies of grey and navy suited baggage dragged about at huge expense and tummy rubbed each year with massive bonus and market insight are really and simply, agents, very expensive middlemen who are fantastically rewarded for ........ who knows what at the end of the day. They look to their own interest and actually contort and manipulate markets to their own end which is self gratification, simply because they are there. Unsubstantiated assessment indicates that pensions paid, would be somewhere in the region of twice that currently made by the industry if these agents were not involved to their own ends.
The issue is far wider than the simple points the article focuses but valid, oh so valid in these days of returning to very expensive business as usual. Unless it is prevented, what happened during the last 4-5 years and brought utter havoc, continues and is up and running again. With ordinary people squeezed out and squeezed out of by these middlemen. If they vanish tomorrow, nothing will change and cost of the financial system nose dives dramatically benefitting everyone. The idea that money people are special is 'their' own idea. That does not make it true or worth the rewards currently earned. These people do not give in - they are the public school bullies, grown up.
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Mark:
If instead of counting our money, we'd been considering our happiness, might the nightmare on Wall Street have never happened?
Well yes.....
~Dennis Junior~
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Mark:
If governments had been thinking about well-being rather than wealth, could we have avoided the global financial crisis?
Yes....simple answer!
~Dennis Junior~
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