The Brown Symposium is presented by Southwestern University on an annual basis. Open to the public without charge, the symposium is funded through an endowment established by The Brown Foundation, Inc., of Houston, Texas, for professorships at the University. The symposia are designed to enhance the effectiveness of the work for which the endowed professorships were established. Each symposium presents topics in one of the broad areas of study represented by the chairholder.
“GNP or Gross National Well-Being,” the 28th symposium in the series, has been developed by A.J. Senchack, professor of economics and business, holder of the Lucy King Brown chair.
How do we measure prosperity?
To measure how prosperous or well off a nation is, economists add up the dollar value of all goods and services produced (and consumed) in a given year. This measure is called Gross National Product (GNP). Thus, well-being is judged on the basis of acquisition of material things, consumption, production, and wealth--things that can be measured monetarily [both its weakness and its (empirical) strength]. Economic thinking tells us that the higher a country’s GNP per capita is, the higher its standard of living is. Similarly, more consumption or more income/wealth implies the better off one should be and feel. This leads to the conclusion that increasing economic growth is the best political policy for government to pursue.
Recent studies in economics, neuroscience, psychology, and sociology, however, indicate that consuming more or earning more does not necessarily lead to greater happiness. In America, such evidence is ignored or does not seem to be apparent to most people. Moreover, critics argue that GNP ignores environmental and human assets (natural capital), i.e., qualitative distinctions are lost in GNP’s measurement of quantity.
Furthermore, GNP itself is misleading, because it only counts monetary exchanges. For instance, negative events that reduce well-being or create “ill-being,” such as an auto wreck or hurricane, actually increase GNP, because of the medical expenses, repairs costs, etc., incurred. Here’s an example where both wealth and “illth” are created, but only wealth creation gets counted. Finally, quality of life may improve even if GNP is not increasing. Clearly something is not being captured by our traditional GNP measure. One critical omission is social or quality of life indicators like family, literacy, type of employment, environment, leisure time, sense of community, etc.; all of which clearly affects one’s well-being and overall satisfaction with life, but is not necessarily reflected in GNP.
Recently, a small, but growing, number of researchers have created a new field of inquiry that is not in any economics textbook---the “economics of happiness or well-being.” The 2006 Brown Symposium will focus on the latest theoretical research and findings on well-being from the fields of economics, neuroscience, psychology, and sociology. This symposium’s intent is to encourage us to go beyond measuring well-being indirectly in terms of dollars or total consumption and to look deeper and assess societal and individual happiness by focusing on and measuring satisfaction or quality of life. Such emphasis will help lead to alternative, national well-being measures that give a more representative picture of how happy people are. In addition, we hope to encourage governmental policies that take well-being into account, rather than solely focusing on economic growth.
GNP was developed during World War II to measure and monitor a country’s total economic activity. In the 1990s, GNP was replaced with Gross Domestic Product (GDP), which essentially excludes economic activities generated by US citizens and corporations overseas.
The Exxon Valdez oil spill is another example of where a great boon to GNP growth is misleading, because of the billions spent to clean up the devastated environment.