Social Welfare and Happiness - Essay Example

Using a country’s Gross Domestic Product, or GDP, as a measure of happiness would presume Koenig’s quote to imply we are doing the exact opposite. The formula for deriving a region’s GDP is consumption + investment + government spending + (exports – imports). It is the consumption part of this equation that would assume to measure a region’s happiness; after all, if people are buying, or consuming, goods, then they must be happy—expressing freedom from want and distress—right?

So, why, then do people generally list factors other than money as contributing to their happiness? Is there truly a gap between how people measure happiness and how governments measure happiness?

In a poll conducted by the author, less than half of participants listed money as directly related to their happiness. Other factors listed by participants included significant others, children, family, and health. These factors do not find their way into the GDP equation. Critics of using GDP as a measurement of health tend to ignore the human factor; instead, relying on how hard data is interpreted and from what sector. Black market economies, recovery after natural disasters, volunteer work, and trade between multinational corporations that straddle borders are grey areas that do not allow governments to get an accurate picture of how consumer spending is contributing to a population’s expression of freedom from want and distress.

The perception that living standards are associated with GDP is evident in how many countries use it to measure a population’s ‘happiness.’ Many people believe that when output increases, more goods are available for consumption. The increase in consumption is equated to happiness; consumption is one of the factors in the formula that determines GDP.

The increase in government spending that would accompany an increase in consumption--the result of more tax revenue for expenditures on health, education, and environmental programs--is also generally associated with happiness. That is if governments truly appropriate increases in revenue to those types of programs, and do not defend parliamentary salaries. If this occurs, GDP cannot be an accurate measurement of a nation’s happiness. Social programs designed to improve the quality of life for a population suffers, as do the people.

A BBC News article discussed Conservative leader David Cameron’s involvement in “The Happiness Formula” program, which attempted to break away from governments’ tendencies to measure happiness by GDP.

“We should be thinking not just what is good for putting money in people’s pockets but what is good for putting joy in people’s hearts”, Cameron said.

The Labour government, in 1998, introduced a series of 13 new indicators of performance, which took into account not only economic factors but also the environment and social welfare.

These categories were:
- Economic growth, as the main indicator of a successful economy,
- Social investment,
- Employment,
- Health and life expectancy,
- Education and training,
- Housing quality,
- Climate change,
- Air pollution,
- Transport,
- Water quality,
- Wildlife,
- Land use
- Waste.