If we want a new economy what we measure matters

Is a good country a rich one, or a happy one?

As the economic crisis deepens into a global recession, all eyes are glued to GDP figures. This is understandable. GDP measures economic activity and whether the economy is growing, which crucially tells us how many jobs there are.

But there’s a lot that these numbers don’t tell us about economies: like whether they are leading to better lives for the people that live in them, and whether those lives are sustainable into the future. If the last few years of economic calamity have taught us anything, it’s that economic indicators are too important to be left just to statisticians and economists to ponder.

Today nef (the new economics foundation) publishes the Happy Planet Index. It is a measure of sustainable well-being that ranks countries based on how long people live, how happy they are and the size of their ecological footprint. The index is about efficiency – countries score well by maximising the happiness they create per unit of environmental input.

If you rank countries based on this efficiency, rather than economic output, the most successful nation in the world is Costa Rica. Costa Ricans have higher average life expectancy and reported well-being than people living in the United States, and the country’s Ecological Footprint is one third the size of the US (which ranks 105th).  The UK comes 41st, ahead of other EU countries but behind most Latin American and Caribbean nations.

The full data is available to explore at www.happyplanetindex.org. None of the top ten countries ranked by overall HPI score are among the world’s richest – in fact amongst the top 40 countries by overall HPI score, only four countries have a GDP per capita  of over $15,000. The highest ranking Western European nation is Norway in 29th place, just behind New Zealand in 28th.

The HPI results provide evidence for something we instinctively know to be true – that progress is not just about wealth, and that it is possible to live both happily and sustainably. They show that while the challenges faced by rich resource-intensive nations and those with high levels of poverty and deprivation may be very different, the end goal is the same: to produce happy, healthy lives now and in the future.

A Costa Rican frog sits on a leaf. Judging by the statistics, it is probably very happy. Photograph: Getty Images

Juliet Michaelson is a senior researcher at nef's Centre for Well-Being

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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