“Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants.” Thus, it is reputed, spoke Benjamin Franklin, one of the Founding Fathers of the United States and who in many ways could be regarded as “the First American”.

In my previous chapter on short-termism, I quoted from an article by Larry Elliot, Economics Editor of The Guardian newspaper. The closing paragraphs of that article read:

“The premise of the Global Commission on the Economy and Climate is that nothing will be done unless finance ministers are convinced of the need for action, especially given the damage caused by a deep recession and sluggish recovery.

Instead of preaching to the choir the plan is to show how to achieve key economic objectives – growth, investment, secure public finances, fairer distribution of income – while at the same time protecting the planet. The pitch to finance ministers will be that tackling climate change will require plenty of upfront investment that will boost growth rather than harm it.”

“ …. the plan is to show how to achieve key economic objectives ……. while at the same time protecting the planet.” [My italics]

That those two paragraphs and the phrase “key economic objectives” seem perfectly reasonable statements to me and, I don’t doubt, many, many others, illustrates how deeply we are entrenched in the money, or materialistic, world.

I have spent my whole life hearing the term ‘Gross Domestic Product’, or GDP as it is commonly described, and never ever stopped to wonder about the history of this well-known measure. Thus I was genuinely surprised to learn that the term is not yet one hundred years old, by some years. On the website Foreign Policy one finds a brief history of GDP: “One stat to rule them all.” It offers the following:

Out of the carnage of the Great Depression and World War II rose the idea of gross domestic product, or GDP: the ultimate measure of a country’s overall welfare, a window into an economy’s soul, the statistic to end all statistics. Its use spread rapidly, becoming the defining indicator of the last century. But in today’s globalized world, it’s increasingly apparent that this Nobel-winning metric is too narrow for these troubled economic times.

1937: Simon Kuznets, an economist at the National Bureau of Economic Research, presents the original formulation of gross domestic product in his report to the U.S. Congress, “National Income, 1929-35.” His idea is to capture all economic production by individuals, companies, and the government in a single measure, which should rise in good times and fall in bad. GDP is born.

1944: Following the Bretton Woods conference that established international financial institutions such as the World Bank and the International Monetary Fund, GDP becomes the standard tool for sizing up a country’s economy.

1959: Economist Moses Abramovitz becomes one of the first to question whether GDP accurately measures a society’s overall well-being. He cautions that “we must be highly skeptical of the view that long-term changes in the rate of growth of welfare can be gauged even roughly from changes in the rate of growth of output.”

1962: But GDP evangelists reign. Arthur Okun, staff economist for U.S. President John F. Kennedy’s Council of Economic Advisers, coins Okun’s Law, which holds that for every 3-point rise in GDP, unemployment will fall 1 percentage point. The theory informs monetary policy: Keep growing the economy, and everything will be just fine. [My italics]

Keep growing the economy and everything will be fine! Thank goodness we have unlimited resources on this planet! Please forgive my irony!

Management thinker Peter Drucker is often quoted as saying that “you can’t manage what you can’t measure” but my understanding was that the saying came from William Edwards Deming; October 1900- December 1993. Deming was fundamentally an American statistician although his bio reveals many other talents: engineer; professor; author; lecturer; and management consultant.

Irrespective of the origins of the saying, it misses one fundamental point! That is of being certain that what you wish to manage is being measured appropriately. Not measuring pears if you wish to manage apples!

Stay with this idea for a while longer.

There is an organisation known as the Social Progress Imperative. The organisation is described on their website, as follows:

THE IMPERATIVE
Numerous studies have found a high correlation between economic growth and a wide variety of social indicators, yet there is growing awareness that economic measures alone do not fully capture social progress.

The Social Progress Imperative’s mission is to improve the quality of lives of people around the world, particularly the least well off, by advancing global social progress. The Social Progress Index provides a robust, holistic and innovative measurement tool to guide countries’ choices to enable greater social progress and foster research and knowledge-sharing on the policies and investments that will best achieve that goal. Social progress is defined as the capacity of a society to meet the basic human needs of its citizens, establish the building blocks that allow citizens and communities to enhance and sustain the quality of their lives, and create the conditions for all individuals to reach their full potential.

The Social Progress Index is a tool that we hope will be widely used to inform and influence policies and institutions around the world. The Index is founded on the principle that what we measure guides the choices we make. By measuring the things that really matter to people — their basic needs, their food, shelter and security; their access to healthcare, education, and a healthy environment; their opportunity to improve their lives — the Social Progress Index is an attempt to reshape the debate about development.

“…. what we measure guides the choices we make.” Pretty flippin’ obvious when you think about it! As is understanding the “things that really matter to people”!

Michael Green is the Chief Executive Office (CEO) of the Social Progress Imperative. He gave a TED Talk in November, 2014 that is introduced:

The term Gross Domestic Product is often talked about as if it were “handed down from god on tablets of stone.” But this concept was invented by an economist in the 1920s. We need a more effective measurement tool to match 21st century needs, says Michael Green: the Social Progress Index. With charm and wit, he shows how this tool measures societies across the three dimensions that actually matter. And reveals the dramatic reordering of nations that occurs when you use it.

As Michael Green said at the October, 2014 TED Global conference: “GDP is imperfect and incomplete: The world urgently needs a measurement revolution.”

If now writing about the BBC radio show, The Goon Show, suggests I have lost the plot, just hang in with me for a few more moments.

The Goon Show ran from 1951 to 1960 and was broadcast by what was then known as the BBC Home Service. It was hilariously funny and became a comedy legend. It starred Spike Milligan, Peter Sellers and Harry Secombe, not forgetting the wonderful narratives from Wallace Greenslade. The Goon Show was an integral part of my ‘education’ during my formative years; I was seven in November of 1951 and the radio was the source of news, current affairs, education, and humour. Spike Milligan was an outstanding actor in The Goon Show and became a comedy legend in his own right.

A quotation from dear, dear Spike seems a very fitting way to round off this chapter on materialism. Namely: “All I ask is the chance to prove that money can’t make me happy.“

1,272 words. Copyright © 2014 Paul Handover

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Now although it is not part of the book, I was so impressed by Michael Green’s TED Talk, that it now follows. You will love it!

Published on Nov 11, 2014
The term Gross Domestic Product is often talked about as if it were “handed down from god on tablets of stone.” But this concept was invented by an economist in the 1920s. We need a more effective measurement tool to match 21st century needs, says Michael Green: the Social Progress Index. With charm and wit, he shows how this tool measures societies across the three dimensions that actually matter. And reveals the dramatic reordering of nations that occurs when you use it.