Reframing the Global Economy, Starting in Bhutan

Fast Company
May 2012

It’s always an honor to be invited to join a head of state to tackle global problems. But it’s rare that anything comes of it.

Hunter Lovins with His Excellency, Jigmi Thinley, the Bhutanese Prime Minister

Hunter Lovins with His Excellency, Jigmi Thinley, the Bhutanese Prime Minister

Last February I was surprised to receive an invitation from the Royal Government of Bhutan to join His Excellency, Jigmi Thinley, the Bhutanese Prime Minister and more than 600 leaders from civil society, business, governments, academic institutions and global experts for a High Level Meeting at the United Nations on Happiness and Well Being: Defining a New Economic Paradigm.

Many of you have heard my rants against the bloated UN bureaucracy, but for some reason this invitation caught my attention.

And rightly so.

April 2, as I arrived in New York, it was clear that the Bhutanese are competent, far more than typical UN functionaries. They excel at hospitality and I believe they’re serious about making the concept of Gross National Happiness (GNH) amount to something. From being presented with a strikingly beautiful little pin of a Bhutanese flower for my jacket to the Prime Minister’s kickass opening and closing speeches, the Bhutanese did it right. And assembled a stellar cast to help them. This was a meeting I’m proud to have been a part of.

My old friend Robert Costanza and his very competent team were a key part. Reading the preparatory papers, I’d a hunch that they had the fingerprints of some genuine experts, and they do. The Bhutanese had brought Bob, the Prince of Wales (via video); Vandana Shiva; Mathis Wackernagel; and Joseph Stiglitz, as well as Gifford Pinchot, founder of Bainbridge Graduate Institute, where I’m honored to be faculty; a really impressive gathering of world religious leaders; and others.

Gross National Happiness was first put forth in 1972 by the fourth ruler of the tiny Himalayan Kingdom of Bhutan. It codifies the practice of Buddhist economics profiled in E.F Schumacher’s landmark book, Small is Beautiful. Faced with an economy that was stagnating as western development experts exploited it, the King of Bhutan decided to focus instead on providing sustainable economic development, preserving and promoting cultural values, conserving the environment, and practicing good governance.

Dasho Karma Ura, president of the Center for Bhutan Studies notes, “Defining happiness is not what is important. What is important is providing the conditions through which people can achieve happiness as they understand it.” GNH guidelines are now being used in Costa Rica and Chile (both of whose Presidents spoke), and are being adopted in Brazil, India, Haiti, and France.

The first day was mostly a set piece with speeches read by the UN Secretary General, the President of the General Assembly, various heads of state, and global experts. The Representative from Morocco droned 35 minutes beyond his allotted five. One interesting bit I heard before taking off the translators headset was his admission that Morocco recognizes that climate change IS real, and that because of it, hundreds of thousands of people are flooding into the cities from farmland no longer able to support them.

Yeah, this is serious stuff.

Tho, gawd, you’d not know it from the predictable pronouncements by the parade of dignitaries, Nobel laureates, and wannabe’s who are still just academics. Most of them read their speeches, did their twirl at the lectern, and departed.

The exception was Bhutan’s Prime Minister.

When not presiding, he sat in the audience, taking notes, asking questions, fully engaged. His speech was delivered without notes, and without artifice. Clearly knowledgeable, passionate and committed to having this impressive ascendency of his tiny kingdom to the world stage amount to something, Thinley’s closing speech was blunt and very real. He put aside diplomatic niceties and laid out his agenda to transform how the nations of the world keep their national accounts, how governments set priorities, and whether the world will turn from the agglomeration of financial riches to providing people with genuine well-being. Bhutan is undertaking nothing less than the transformation of the existing economic paradigm. It seeks to reframe the UN’s Millennium Development goals around the achievement of GNH, and appears to have the support of the UN behind it. Prime minister Thinley stated,“ Happiness is very serious business. The dogma of limitless productivity and growth in a finite world is unsustainable and unfair for future generations.”

Then it was my turn.

Five minutes is not a lot of time. Many wasted theirs with salutations to the Excellencies and honorable this’s and that’s.

I didn’t.

“The time for talk is over,” I said. “We know what’s wrong. We know what to do about it. We have all of the technologies that we need to solves all of the world’s problems. What we lack is the political will.” I described, as Chapter 10 of The Way Out: Kickstarting Capitalism to Save Our Economic Ass does, the principles of how to reform capitalism so that our economy works, as Bucky Fuller put it, for 100% of humanity. Laying out the business case for unleashing the new green economy, I closed by telling the story that the late UN Ambassador for Peace, my friend Wangari Maathai, tells of the hummingbird (if you don’t know the story, do yourself a favor now – click here. It’s a reminder that sometimes it takes the littlest among us to motivate the rest.

Asked to stay on for two following days of work, I agreed, and was promptly named Chair of the Civil Society Working Group.

Wow, what a privilege. Tashi Colman, a friend who is working with the Bhutanese government helping coordinate this monumental task, appointed me, and on my querying what our charge was, said, “Create a global movement to make gross national happiness the world’s economic paradigm.”

Yes, sir, by 5 PM….

Coordinating a group of 50 reigning experts who have never worked together is a challenge at any time. But as I’ve seen at other international gatherings of civil society, the group cohered, worked diligently, put egos, organizational agendas, and established ways of doing things aside in service to Bhutan’s call for transformation.

Will it amount to anything?

I asked Tashi this two days later, as we were all leaving, exhausted, drained, but strangely happy.

Yes, he answered.

And so it may. The last day, I told the working group that I had to take several hours off. We were building the MBA curriculum for the new Bard MBA program at which I’ll teach this fall in New York City. I asked the group’s indulgence to choose another chair. One of the religious leaders agreed to step in, and has ably led the continued work of the group. I’d told them, in closing, that, while happy to have spent these two days with them, I did have a day job back in Colorado, well, and around the world, to which I’d have to return.

And with me as a simple member, the group has formed a Gross National Happiness Fund, with the goal to raise a dollar for every person on earth. Danny Almagor, an Australian investor, Jens Amsdorf, a Dutch fund manager, and Mark Anielski, whose new book, The Economics of Happiness: Building Genuine Wealth, is required reading for those working in this field, continue to lay out the details.

Our colleague groups, the academics, a planning group, and a communications group, continue to refine their contributions to creating this global movement. Prime Minister Thinley has asked, as head of state, for a speaking slot at the UN’s upcoming Rio+20 summit. But his real goal is next year when the UN revisits the Millennium Development Goals. And beyond. The country has committed to staff a global secretariat for Gross National Happiness, and to convene in 2014 a “Bhutan Woods” conference to reframe the now clearly failing economic institutions created by the world powers at Bretton Woods after World War II.

The crux of the question is what is it that we wish to achieve? Measures like Gross National Product (GNP) claim to answer this. We’re expected to be happy when it grows, and worried when it falls. But GNP is actually a very strange measure of anything. It only counts the velocity of the flow of money and stuff through the economy as they changes hands in economic transactions. The more money that gets spent, conventional wisdom says, the better off we are.

But are we? If you volunteer at a home for the elderly, you’ve done nothing to increase the GNP. A divorcing cancer patient who gets in a car wreck adds handsomely to the GNP as money goes for insurance, repairs, and medical bills. But is she any better off? Clearly not.

GNP’s usefulness has been questioned since it was invented in the 1930s. Simon Kuznets, one of the architects of this way of keeping national systems of account, warned, “A nation’s welfare can scarcely be inferred from their national income.” On 18 March 1968, Robert Kennedy put it more elegantly, stating:

Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things…The gross national product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl…Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.  It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.

Is the point of the economy to enrich the 20% of the population that owns 80% of global wealth, at the cost of misery for the rest? Shouldn’t good capitalists seek to enhance and productively use all forms of capital, human and natural, as well as manufactured and financial, to increase their ability to durably create more wealth?

This concept seemed quaint to most economists until 2009 when Stiglitz, along with fellow Nobel’s Dr. Amartya Sen, Dr. Daniel Kahneman, and French economist Jean-Paul Fitoussi, released the results of the two-year Quality of Life Commission they chaired. Convened by French President Nicholas Sarkozy, the Commission brought together economists and keepers of national accounts from across the world. They concluded that assessing a population’s quality of life will require metrics from at least seven categories: health, education, environment, employment, material well-being, interpersonal connectedness and political engagement. They also decided that any nation serious about progress should start measuring its “equity”—that is, the distribution of material wealth and other social goods—as well as its economic and environmental sustainability.

In the wake of the report’s release, the European Union’s statistical office and the Organization for Economic Cooperation and Development began debating how to implement more representative indicators of genuine wellbeing and to move the focus away from GDP. “We want policies that reflect our values, but nobody says what those values are,” Stiglitz told a New York Times reporter. “The opportunity to choose a new set of indicators is tantamount to saying that we should not only have a conversation about recasting GDP. We should also, in the aftermath of an extraordinary economic collapse, talk about what the goals of a society really are.”[x]

British statistician Mark Nics explores what it is that makes life worthwhile, noting that when people are actually surveyed and asked this question they say that they most want happiness, then love, then health, and only belatedly do they list getting more money. If these are the natural human aspirations, Nics asks, then, “Why are statisticians not measuring that? Why are we not thinking of the progress of nations in these terms, instead of just how much stuff we have?” Nics cites an evidence-based study exploring what enables people to be happy. The answers: social relationships, being active, taking notice of one’s surroundings, life-long learning and curiosity, and the quintessentially uneconomic activity of giving. All are activities that have little cost to the climate or the ecological integrity of the planet. “Happiness,” concludes Nics, “Does not cost the earth.”  (Click here to see Nics’ TED Talk.)

But what we are doing now sure does. And the question remains, how to we change this. At one point late on the third day, the communications working group stated in its report that the movement needed to enunciate a business case for GNH. Prime Minister Thinley turned across the massive plenary hall to me and grinned, asking “What does Hunter Lovins say about this?”

I stood and told him that we HAVE the business case, that we should not shy from saying to the world that his agenda will be good for business, that the companies that are the leaders in environmental, social, and good governance policies have 25% higher stock value, that 93% of CEOs of major companies now say that “Sustainability will be critical to the future success of their companies, and could be fully embedded into core business within ten years.” A new report describes how switching to use of the GNH concept would net the European manufacturing sector $630 billion by 2025.

Conversely, I warned, as Interface CEO Ray Anderson put it, “What’s the business case for ending life on earth?”

Thinley nodded at me and smiled.

A woman from a leftist group shot her hand up, saying that she totally disagreed with me, that we should keep business out of this, that it’s a moral issue.

The Prime minister sighed, thanked her for her comment, said, “Next?” Then looked back at me, eyes twinkling, and grinned.”

Yeah, he’s gonna make it happen.

 

LINKS OF INTEREST


[ii] grossnationalhappiness.com

[iii] Schumacher, E. F., Small is Beautiful, Harper Perennial, 1959, 1973, 1989, http://www.ecobooks.com/books/smbeaut.htm

[v] Duncan, Don, “Economists Appraise Bhutan’s Happiness Model,” San Francisco Chronicle, 4 December 2008, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/04/MN3C14CTN5.DTL

[vi] http://www.guardian.co.uk/world/feedarticle/10176563

[vii] http://dotsub.com/view/e0269cf5-d62f-40a5-abdf-704e5b0c4f1e

[viii] Kennedy, Robert, remarks at the University of Kansas 18 march 1968, http://www.jfklibrary.org/Historical+Resources/Archives/Reference+Desk/Speeches/RFK/RFKSpeech68Mar18UKansas.htm

[ix] Stiglitz, J, Sen, A & Fitoussi, J-P. Report by the Commission on the Measurement of Economic Performance and Social Progress 2009  www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf.

[x] Gertner, Jon, “The Rise and fall of the GDP, ”The New York Times, 16 May 2010, http://www.nytimes.com/2010/05/16/magazine/16GDP-t.html?sq=gdp&st=cse&scp=2&pagewanted=print

[xi] http://www.ted.com/talks/nic_marks_the_happy_planet_index.html

[xii] http://www.ted.com/talks/nic_marks_the_happy_planet_index.html

[xiv] http://www.unglobalcompact.org/news/42-06-22-2010

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