In the spring of 1968, Robert F. Kennedy gave a speech that has echoed for half a century. It was a notion he’d been playing with for some time, and it became part of his campaign in his bid to become the Democratic presidential nominee. He suggested that gross national product was the wrong measure of a nation’s success. What he called Gross National Product, what many also refer to as Gross Domestic Product, measured nothing but money and output.
Kennedy said GNP failed to measure the level of satisfaction that America’s citizens were experiencing. It measured everything, he said, “except that which makes life worthwhile.” He brought this forward at a time when the people of the United States were bitterly divided. Riots were being fought in streets and university campuses over the war in Vietnam, and over racial discrimination. Yet the GNP of the United States at the time was $800 billion. The unhappiness grew as GNP grew.
Gross domestic product was developed as a tool to help Great Britain during the Second World War. It was developed by John Maynard Keynes, while working for the UK’s Treasury office. He wrote of his frustration at the lack of good data needed to understand what resources were at the country’s disposal to fight against the Nazis.
The idea of gross domestic product took off around the world, hailed as not just a measure of economic success, but of societal wellbeing. As Robert Kennedy pointed out, the two do not match.
GDP measures output of cars and steel mills and banks and home appliances, and how much government spends on police and prisons and military — and all the other things that a society needs. The only successful GDP is one that shows a healthy growth curve.
The outcome since the end of the post-war boom, has shown that, as more and more government policy focuses on keeping the GDP on an upward curve, the wellbeing of the citizens declines. Kennedy, sadly, was assassinated before he could press his ideas into policy.
Canadians have been trying to measure their wellbeing. In the early 2000s, the Atkinson Foundation worked with the Canadian Policy Research Networks to consult Canadians on the kind of indicators that could be used to measure their quality of life. Three massive national wellbeing reports have been issued by the group, which calls itself the Canadian Index of Wellbeing. Provincial reports have been created in Ontario, Nova Scotia and Saskatchewan. Community-level well-being reports have been created. This year, a national report on child and youth wellbeing is being compiled.
What do the reports show?
Is any of it being turned into wise policy?
You have to wonder.
In the early 1960s, Canada was a model of equality. Job salaries were strong, debt was low and home costs were low. The post-war boom created a strong education system, and Medicare was new and innovative and reducing the burden of health care on Canadians.
Today, as the truckers’ blockade shows, there is an undercurrent of unhappiness that has radicalized some segments of the population.
Before the mental strain of the pandemic, families were strained because their household debt had risen dramatically since the 1990s. Now, with interest rates beginning to tip uphill, the strain will only increase. The debt-to-income ratio is a serious cause for concern of economists — but not because it’s reducing quality of life, but because defaults on loans and mortgages will harm the GDP.
There’s an exodus from the city happening today. That was sparked by the pandemic, which exposed the qualities of a city that make life less rewarding; the long commutes, the lack of true green space, the rising threat of violence.
Wages have been losing ground to the cost of living for many years. The percentage of Canadians earning below-average salaries is somewhere near 60 per cent. The one per cent, as we well know, are heading in the opposite direction, earning bonuses and fat dividends by cutting jobs, reducing benefits packages.
Our expectations are higher, yes. Canadians want better, low-cost child care. They want new and expensive medical treatments for rare diseases. These expectations, though, are based on an urge to improve the quality of life that most see has something that’s been lost.
It’s ironic that government policies supporting GDP and growth are reducing quality of life, in turn, creating public demand for more support programs that take the cost of government further and further out of control.