At U.N. Happiness Summit, A Coal Pile in the Ballroom
By Charles Eisenstein
I spent the day last Monday at the United Nations by invitation of the Bhutanese government (along with about 600 other guests). The event was called “High Level Meeting on Well-being and Happiness: Defining a New Economic Paradigm.” I thought, “It must not be very high-level if I am invited.” Nonetheless, there I was among 600 activists, economists, NGO workers, bankers, et al from around the world, listening to speeches by prime ministers and Nobel laureates. Except for the monks, I was the only man not wearing a necktie. But that wasn’t what disturbed me about the meeting.
Let me give you a bit of background. In 1972, the King of Bhutan, Jigme Singye Wangchuck, remarked that, instead of gross national product (GNP), the nation should strive for “gross national happiness” (GNH). I believe he meant merely to point out that GNP (or GDP, as is more commonly used today) is a poor indicator of a nation’s well-being. The concept of gross national happiness had traction, though, and it wasn’t long before psychologists and economists were trying to come up with metrics to put a number on the concept. Adding impetus to this effort was a growing awareness among social critics that GDP is a very poor indicator of a people’s well-being. In the United States, real per-capita GDP has risen three-fold since the 1950s, but people are not three times happier by any measure. If anything, they are less happy.
Goods and Growth
That GDP and happiness are poorly correlated actually presents a deep challenge to economic dogma. Economics associates GDP closely with “utility” – that is, with “goodness.” After all, you won’t buy something with your hard-earned cash if it doesn’t benefit you, right? If, for example, you decided to sacrifice some of your leisure time in order to buy a new car, that must mean the car will make you happier than that extra hour of leisure every day. In a free market, two parties won’t make an exchange if it is not to their mutual benefit. Therefore, say the economists, the more exchanges being made, the more total benefit is being had. That is why, in economics, it is those things that are exchanged for money – and only those things – that are called “goods.”
The fact that economists were at the podium questioning the equivalence of happiness and GDP is a hopeful sign, a sign of a deep crack in the foundation of the economics discipline. But it is one thing to say there is more to happiness than economic growth; it is quite another to propose that economic growth is inimical to generalized happiness. None of the speakers advocated an end to growth – that would be called, in the present vocabulary, economic stagnation or recession. Instead, they invoked, again and again, “sustainable development,” a phrase I must have heard 30 times. The main message seemed to be, “Of course we will continue to have economic growth and sustainable development, but alongside it we should adopt policies that foster the well-being that GDP doesn’t measure.”
The Federal Palace Restaurant in Hong Kong offers this advice on happiness. Photo credit: Guy Kawasaki/Erno Hannink. Used under Creative Commons license.
Economic growth is sacrosanct for a reason: without it, our money system disintegrates. Because money is created as interest-bearing debt, without growth, debt tends to rise faster than the ability to service it. For a time, borrowers can be lent even more money with which to service their debts while they wait for the return of growth; but if growth doesn’t return, they will go bankrupt. As this process proceeds, debt-to-income ratios rise, wealth concentrates in fewer and fewer hands, and a Marxian crisis of capital looms: a vicious circle of falling wages or employment, shrinking demand, falling profits, more layoffs, and so on. In times of high growth, a portion of that growth can go to enrich the owners of capital, and everyone else can get richer, too. But when growth slows, there isn’t enough wealth left for “everyone else” after the interest has been paid.
So it is in Europe today: “Austerity” means that more and more of a nation’s income will go toward debt service, and more and more of its assets will be transferred to its creditors. And if growth doesn’t resume, this process will never end until the entire population are paupers. Around the world, whether for nations or for individuals, financial policymakers adhere to the same plan: Grow your way out of debt. The only alternative is some sort of redistribution of wealth – through debt forgiveness, for example, through inflation, or through Gesellian negative-interest economics. There is no alternative that preserves the wealth of those who have wealth.
Thus it was that, at the conference and in the World Happiness Report that accompanied it, while there were a few nods to the ecological limits of growth, there was no mention of addressing Third World debt, consumer debt, or the financial system that depends on it. This was the coal pile in the ballroom – obvious but unmentionable, for acknowledging it would mean, inescapably, a radical transformation of our entire society. The circles represented at this “high level” conference have not reached the point yet of countenancing anything as radical as ending the debt system. But they will soon. As ecosystems and cultures unravel, the party isn’t as much fun anymore even for those at the top.
Debt and the Erosion of Well-Being
Without addressing debt, I’m afraid the world won’t make much progress in happiness. You see, it is not only that GDP and GNH are not equivalent; further growth in GDP cannot even happen without eroding the basis of human well-being on Earth. What exactly happens when GDP grows? GDP is defined as the sum total of goods and services exchanged for money. So, if neighbors look after each other’s children, no service is rendered; it only becomes a service when they pay for day care instead. If a culture practices subsistence farming on communal land, no goods are being produced. The food only becomes a good when they sell it to each other; so, too, the land when they divide it into private property and rent it out. Any potential to monetize what was once free is a business opportunity, a lending opportunity. Without such opportunities, banks cannot lend new money into existence. Without new money, the old debts quickly become unpayable. And because the new money comes along with even more debt, the system always needs to grow; the realm of goods and services needs always to expand.
So here is a dilemma: The way the realm of goods and services expands is by transforming nature and social relationships – the very things that the World Happiness Report cites as essential to happiness – into products and services. In order to keep the financial system functioning, we are destroying the basis of human well-being.
Here are some of the many examples of how economic growth policies directly destroy the essentials of happiness. Economic growth turns social reciprocity and gift relationships (two components of GNH) into paid services. It converts pristine ecosystems into sources of timber or minerals. It converts silence into noise, starry skies into urban lights, kitchen gardens into supermarket purchases, mom’s cooking into fast food takeout. It replaces the village storyteller with the TV cartoon, mothering with day care, outdoor play with video games. A society that still has these former things intact, and meets its needs without much money, is called, by economists, an “undeveloped market.” The process of liquidating social and natural capital is called “development.” Clearly, our conception of sustainable development is begging for scrutiny.
It is not enough to call for education, national pride, or religious teachings to stem the tide of globalization when the money system drives that tide. When rural youth leave the farm for the slums of Cairo or Bangkok, the glamorized images of Western consumption that draw them usually have an ally in economic conditions. Possibly, it is that local produce cannot compete with imports thanks to free trade policies and perverse subsidies for mechanized agriculture and transport. And what is behind the free trade policies, the subsidies? We would like to blame greed, but, at the bottom, I find something more banal – the pressure to pay the bondholders, or to get an extra half-percent return on investment, or to reduce a fiscal deficit. Debt pressure is endemic to the system, and it pushes the commoditization and marketization of everything and everyone. Ecological protection, cultural diversity, local agriculture, and fair trade are all under assault when nations are forced to liquidate natural resources, to convert agriculture to commodity production, to open markets and eliminate protections on labor in order to keep servicing their debts to the international banking system. The effects of debt pressure reach into personal life in wealthy countries, too. We would like to enjoy more leisure (listed in the report as important for happiness), but how can we when we have student loans to pay, credit cards, mortgage debt?
At the conference, Swami Atmapriyananda recited an old teaching story about a fisherman lounging at the wharf. A businessman comes up and asks why he isn’t out there fishing. “I already caught enough today to feed my family.”
“But if you fish more, you could sell the fish and make money.”
“Why would I want to do that?”
“With the money, you could buy more boats and hire other people to man them.”
“Why would I want to do that?”
“Well, then you could make even more money and retire.”
“Why would I want to do that?”
“Then you could spend your days lounging on the wharf and only fishing as much as you pleased.”
“But that’s what I’m doing right now.”
During the Q&A at the end of the conference I offered a variation to this story. The businessman tells the fisherman he could make more money. “Why would I want to do that?” Because if you don’t, you won’t be able to make your debt payments and I will seize your boat!
In summary, debt drives growth, and growth drives debt. This system erodes many of the things that are essential to human happiness – such as community, leisure, and nature – but as long as there is room for new growth, the system can keep going. Today, though, we are running out of nature to convert into goods – the planet just cannot sustain much more exploitation. We are also running out of social relationships that aren’t yet monetized. This crisis of growth has been delayed for many decades through colonialism and technology, extending the domain of money, but it is upon us now. The result is rising indebtedness and growing misery, as each extension of growth comes at higher and higher cost.
Human Nature and the Easterlin Paradox
A key paradox in the field of happiness research illuminates this situation. Known as the Easterlin Paradox, it observes that, while national happiness doesn’t rise with national income, nonetheless, within a nation, those with higher incomes are generally happier than their compatriots; moreover, wealthier nations generally rank higher in measures of happiness than poorer nations. With a few notable exceptions (Costa Rica, Thailand), the happiest countries on Earth are the Western industrialized democracies.
How to explain this paradox? One might critique the findings of the report on methodological and conceptual grounds. For example, could “happiness” signify different things in different cultures? Perhaps it has taken on associations of Western-style “success.” Or, perhaps, it only measures how people compare themselves to a socially constructed standard. The accepted explanation for the paradox is that people are, by nature, competitive and are, therefore, unhappy when they see people around them who are wealthier than they are. If that is the explanation, one can only shrug one’s shoulders. Absent totalitarian communism, people will always vary in their abilities and fortune. At best, it suggests the prescriptions of mainstream political liberalism – more equitable distribution and welfare state services to ameliorate the effects of disparities. The economists present were comfortable with this level of change which, admittedly, in the current political environment, is already beyond the pale. I would be happy if the liberals got their way, but they will not. We cannot afford it – if “afford” means, as it does today, to keep the wealth of the creditor class intact. Along with everybody else, the liberals are working against debt pressure, which conspires to erode the social safety net and intensify wealth concentration still further. There is no escaping the need for systemic monetary reform.
The dynamics of growth and debt reveal another, more disturbing explanation for the Easterlin Paradox. The reason that lower-income nations are unhappier is simply that the basis of happiness there has been strip-mined, converted to money, and exported to creditor nations. And, of course, within these creditor nations it is the same – only a very few people enjoy the benefits. Most people there are debtors, as well, and suffer from the same depletion of the natural and social capital.
Where does happiness fit in life? Photo credit: Paul Downey. Used under Creative Commons license.
When the elements of well-being have been stripped from a culture, when its communities, its traditions and stories, its relationship to the land, its cultural identity, its natural resources are all gone, then its people have only money left to sustain themselves. Basic human needs do not change; but when an economy is monetized, the many ways its people meet these needs collapse into one way – money. Once that has happened, of course, it is true that happiness will depend on money. So, the explanation for the Easterlin Paradox is not that we compare ourselves to our fellows and are envious of their success; it is that the success of one comes at the expense of another. One man’s wealth is another man’s debt.
From this perspective, it is clear why economic growth doesn’t increase happiness. If monetary transactions merely replace things that have been lost, they won’t increase “utility” or well-being at all. For example, if I take your land and sell it back to you, if I destroy your culture and sell you entertainment, if I destroy systems of reciprocal labor and force people to buy and sell labor, if I pollute or privatize the water so that you have to pay for potable water, if I destroy your indigenous systems of healing and learning so that you must pay for medicine and education, if I impose debt on a population so that people must pay to even exist, then no one is actually better off. Instead, we have a situation where a shrinking minority can obtain at least the measurable factors of happiness, while the majority can’t even obtain those. And this state of affairs is irremediable, as long as we are stuck in a scarcity-inducing, debt-based money system.
It is not surprising that the economists and dignitaries couldn’t acknowledge how fundamental this crisis actually is. They are, after all, deeply invested in the present system. But even the most conservative among us sense, I think, that superficial efforts to promote happiness are doomed, that some inexorable force is working against them. Though they might respond to this helplessness with pretense or cynicism, there is hope, too. Some of the speakers were from outside government and academia, and when they enunciated principles wholly at odds with mainstream economic philosophy, the audience came alive – professors, World Bank employees, NGO workers, and grass roots activists alike. If nothing else, the conference was significant for bringing such voices into a high-level conversation on economics.
There was, at the conference, an undercurrent of radicalism that would have supported a deeper critique. It surfaced a few times: Costa Rican president Laura Chinchilla mentioned the need to reconceive what development is; Dr. Vandana Shiva spoke of the horrendous effects of economic development on Indian agriculture and questioned whether happiness can really be measured; Dasho Karma Ura spoke of the “joy of slowness,” the value of silence in nature, and other things fundamentally inimical to development as we know it. “In the GNH paradigm,” said Dasho Karma Tshiteem, “time is life, not money.”
One after another, the Western professors at the podium proclaimed, “Happiness is something we can measure,” and each attendee received a 100+ page World Happiness Report ranking the happiness level of each country according to a variety of measurements. While I had questions about the methodology and unexamined assumptions behind the data, my main question was, “Why is it so important to measure happiness?”
For one thing, if happiness can be measured, and if we understand the purpose of government to be maximizing the happiness of its people, then we can continue to apply the same mindsets and methods of the technocrat to governance, merely replacing GDP with a quantified measure of GNH. This would fulfill Jeremy Bentham’s 200-year-old ambition to make a science of governance. For a long time, we have sought through economics, political “science,” and the “social sciences” generally to engineer a more perfect society. If only we could be more rational, more scientific! Running society becomes something like a math problem.
Members of the intellectual establishment will not give up this ambition easily, for their careers are dedicated to it, valorized by it. If social engineering has largely failed, perhaps that is because we aren’t doing it well enough. We need better data! If GDP is flawed, let’s replace it with a new measure. That the whole ambition to quantify everything and to base decisions on the maximizing of a number is insane does not occur to them, for it lies at the foundation of a a 400-year-old intellectual tradition going back at least to Galileo. In science, only the measurable is real.
Even more alien to the technocrat would be the notion that the progressive quantification of the world is hostile to human happiness. Today we see the encroachment of the realm of money, of the commodity, of property, into the domains of the commons and the gift. We might add to Dasho Karma Tshiteem’s observation and say that only when we measure time can the equation “time is money” take hold. Perhaps it is the immeasurable that is key to happiness. Proposals for GNH metrics seek to measure the number of one’s social relationships; but can it measure their quality? We might measure leisure time, but can we distinguish hours spent in mindless dissipation from those spent in intimate connection? The danger, in making choices by the numbers, is that we develop those things that can be measured and neglect those that cannot. That is why, on a personal level, it is foolish to make choices based on money. On a collective level, too, that is why we have so many huge but ugly buildings, copious but unnourishing calories, pervasive but impersonal entertainment. And it is why those outside the measurement systems – such as the indigenous and other species – have been sacrificed on the altar of growth.
Happiness isn’t a product that can be measured, bottled, and sold. Photo credit: Jarno. Used under Creative Commons license.
To be fair, the desire to measure happiness is well-motivated. While I didn’t hear it explicitly stated, a natural next step after establishing a GNH measure would be to monetize it, in the sense of internalizing costs that are presently externalized onto our well-being. For example, if we decide that healthy ecosystems are important to happiness, we could tax their depletion. Some of the economists present at the meeting advocate just this. Robert Costanza, for instance, is a leading figure in ecological economics who advocates the valuation of “ecosystem services.” Once so valued, we can easily manage their use through green taxes and similar measures. I sympathize with this idea of finding ways to make products and processes that involve the despoliation of the planet prohibitively expensive. We must also keep in mind, however, that the immeasurable might be even more precious. Without this awareness, we risk committing monstrous acts. What if, for instance, we assign a value to a certain rare species of turtle, and find that the revenue generated by paving over its last habitat and building strip malls exceeds that value?
I am not sure whether, ultimately, the designs of the economists can be consistent with the spiritual teachings that certain of the monks brought to the conference. It seemed that the economists were salivating to get their hands on a new arena of utility-maximization. Even if their motivation is to apply the tools of their trade for the good, those tools are based on a worldview that has unhappiness built into it. It might, in this case, be as Audre Lord said: “The master’s tools will never dismantle the master’s house.”
Human Nature and Selfishness
Primary among the axioms of economics is the assumption of selfishness – that human beings seek to maximize their rational self-interest, at least in most situations. After all, if you have a choice between paying more and paying less, you pay less. Everyone tries to get the best deal. Yet some of the spiritual leaders at the meeting enunciated a very different conception of human nature. They spoke of the interconnected nature of being and, drawing applause from the audience, of the importance of altruism and loving-kindness as a basis for happiness.
The World Happiness Report, however, was more equivocal. True, it devoted a brief section to the correlation between altruism and happiness, citing studies that show that people who volunteer tend to be happier than those who do not; but it also argued that people’s own happiness diminishes when the people around them increase their income. Consider the following passage in the report:
But the more general finding is that comparator’s income reduced happiness and this has been strikingly confirmed in many laboratory experiments. One neuroscience experiment involved the task of guessing the number of dots on a screen. Good guesses were rewarded by a monetary payment. Each subject was paired with another subject, and after each of the 300 trials the subject was told the accuracy of his own guesses and the associated income he would receive, as well as the same information for his “pair.” At the same time fMRI scans measured the blood oxygenation in the subject’s relevant reward center (the ventral striatum). Blood oxygenations responded strongly to both the subject’s own income (positively) and to the pair’s income (negatively). The negative effect of the pair’s income was at least two thirds as large as the positive effect of the subject’s own income.
What are we to make of this? One might conclude that, just as economists tell us, human beings are indeed motivated by self-interest, and that this self-interest generally corresponds to money. Moreover, happiness measures also correlate fairly strongly with income. But, we might also ask, in what situation is it normal to envy the success of another person or to gloat over their failure? It is normal in a competitive situation, and our money system immerses us in perpetual competition. Because money is created through lending at interest, there is always more debt than there is money. We are always in competition for never-enough of it. The more monetized a society in which we live, the more this condition colors our perceptions, so that, quite naturally, we accept it as human nature.
Perhaps selfishness is not human nature; perhaps it is an artifact of our system. Someone recently told me a story about an anthropologist who put a basketful of sweet fruit near a try and told some children that whoever got there first would win the fruits. The children all joined hands and ran there together. When the anthropologist asked them why, they responded, “How can one of us be happy if all the other ones are sad?” Perhaps this, and not the above social psychology experiment, exemplifies human nature. Or, perhaps, human nature is not an immutable absolute, but arises through the the interplay of biology and culture.
In a gift-based culture, it is obvious that each person’s well-being depends on the well-being of others. In a usury-based culture, it is not so obvious. Your misfortune is my good fortune, because that’s one less competitor for never-enough money. When one is in debt, it is hard to experience the “joy of slowness” that Dasho Karma Ura spoke of. For many people I know, debt is a powerful source of stress. Marriages fall apart because of it, health breaks down. Recently, an elderly man in Greece even killed himself to escape his debts. There is academic research demonstrating a correlation between debt and psychological distress.1
Barriers to Interbeing
Why wasn’t debt and the money system mentioned in the conference? It is all well and good to voice lofty intentions to uphold the things that the debt system is destroying, but if that system isn’t addressed as well, those intentions will never be kept. I am not surprised that it wasn’t mentioned, because the money system lies at the heart of today’s world order. To advocate creating money in a different way than through interest-bearing debt is heresy. Economists, in particular, are wedded to this system, so I was not surprised that they didn’t highlight its incompatibility with so many of their criteria for happiness. The best they could do was to say, “High income does make people happy, but other things do, too. Therefore, we must pay attention to these other things even as we strive for continued economic growth.”
One might easily say that the economists have hijacked the Gross National Happiness movement, neutering its implicit radical critique of economic growth. They seem to have turned it away from the deeper questions, not only regarding the money system, but also the worldview upon which it rests – the reductionistic philosophy of measurement, number, and control, and the vision of a world of separate, competing selves. Yet even they resonate with teachings that run counter to that worldview. Perhaps they are doing the best they can, within the limits of their operating paradigms, to bring about a more beautiful world.
Unfortunately, these operating paradigms doom such efforts to failure. It is not just the money system that is at stake here. Underlying our debt-based system is a certain view of human nature, human identity, and our relationship to nature that is, like the money system, in crisis. A system that engenders competition makes sense in a world of discrete, separate selves, striving first and foremost to survive and reproduce in a world of Other. But that sense-of-self is becoming obsolete; many of the religious speakers talked of the interconnected nature of being, of interbeingness, of the larger We. Even the economists acknowledged the importance of connections and community for happiness. But when we have a money system that fosters endemic disconnection, any efforts to promote happiness will be fighting an uphill battle. We saw what happened when the sincere intentions of Rio ran up against financial reality, and its hopefully promises came to nought. Let’s not repeat that mistake. It is time to confront the fact that our spiritual values, which are evolving toward oneness or interconnection, are at odds with our institutions, which embody separation. Our economic institutions are chief among them, and cannot be excluded from the happiness conversation.
1 See for example S. Brown et al. / Journal of Economic Psychology 26 (2005) 642–663. The researchers disaggregated debt from income and assets. Savings have a positive correlation with reported life satisfaction, but not as strong as the negative correlation between debt and life satisfaction.