Opinion

Measuring What Matters

If the GDP drops, there is panic; if it rises, other issues are ignored.

The mandate letters for three federal cabinet ministers this year include finding a way to “better incorporate quality of life measurements into government decision-making and budget processes.” While this may sound like another frivolous, feel-good Liberal talking point, it could have profound implications. And it is in line with Biblical teachings. The Bible is full of warnings about letting wealth and economics dictate our lives, at the expense of other factors that are equally important for our well-being – or flourishing, to use a Biblical word. How we measure progress and societal needs reflects our deepest beliefs. 

The current measure of economic growth, the Gross Domestic Product (GDP), has become an idol; it is weaponized in our public debates. If the GDP drops, there is panic; if it rises, other issues are ignored. The problem is that it is a poor surrogate for well-being. It makes no distinctions between harmful economic actions, such as buying cigarettes, and good actions, such as buying food for a hungry child. It does not subtract the costs of damaging actions, like pollution, and it excludes all the non-paid work that is essential for well-being. 

Measuring Shalom
It is challenging to measure well-being in numbers. A lot of work has been done to develop indicators that reflect a more holistic sense of a healthy society. The Canadian Well-being Index (CWI), a project housed at the University of Waterloo, and now championed by former Governor General David Johnstone, provides an insightful alternative to the GDP as a tool to measure progress. 

Can it make a difference? Between 1994 and 2014, the GDP in Canada grew over 38 percent, but the CWI, a measure of well-being, rose only nine percent. After 2008, the economy recovered but the well-being gap between people in Canada widened. That assessment resonates with surveys and polls that capture a common sense that some are being left behind in what makes life work well while the GDP grows. 

Other countries such as New Zealand, Scotland, the Nordics and the Netherlands are finding ways to better balance these factors in public debates and reports on the economy that drive allocation of resources. There are other tools, such as the Genuine Progress Indicator (GPI), and all of them can be critiqued. As should our current reliance on the GDP. 

Real costs
Given the features of the Canadian way of life, it would be helpful to have better measures than we do now. Imagine the impact if news reports included a measure of well-being as well as the GDP and stock market fluctuations. Imagine a national budget that balances several indicators instead of letting economic growth dominate and drive all the other factors. 

A better measure of progress would help with two core issues. First is the over-emphasis we now give to the economic side of life. The budget has become the primary tool of governing. The extent of that distortion was on display last year when refugee policy, the poverty plan and the right to housing were all lumped into the budget. Second is that real costs are ignored, such as destruction of the environment and erosion of community, essentials for human well-being. We can no longer afford to ignore such costs. 

I had the opportunity to work on a Child Well-being Index, housed at UNICEF. The process forced everyone to think about what really counts if we want to create a healthy context for all children to develop their full potential. A creative artist chose to portray the results as a tree, the image of flourishing in the Bible.

  • Kathy Vandergrift, a public policy analyst, brings experience in government, social justice work and a Master’s Degree in Public Ethics to her reflections.

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