Happiness and Economics

Happiness and Economics


The king of Bhutan proposed in 1972 a new concept for measuring economic performance. He called it the “General National Happiness” GNH, as opposed to the generally acceptable economic concept of Gross National Product GNP.

Bhutan is a small nation near the Himalayas, surrounded by China, India and Bangladesh. It population is about one million, and its area is 14,800 square kilometers. Its GNP is US$ 2.2 Billion, and its per capita income is US$ 2,830. It is similar to the smaller Countries in the Gulf, but is poor.

However, what it lacks in wealth, it more than makes up in happiness. It ranks the eighth among the world’s 178 countries in the “Happiness Index”. And it is the only poor country in the top twenty happy countries.

The King’s novel ideas were ignored by the arrogant affluent developed world. Their language is that of Mammon – Money, not humane mumbo-jumbo. Nevertheless, the King persisted with his ideas and incorporated them into his five-year development plans.

With the passage of time, and with all the political and economic disasters and tragedies that befell the world since 1972, thinkers, economists and social scientists began to reconsider his ideas. His concepts started to gradually infiltrate development thought, and by 2005, The International Institute of Management had developed similar hybrid theories. Soon, other scientific bodies got in-on the act and by 2011, the UN had adopted the concept and incorporated it into its Development Programs. Many other countries followed suite, including Dubai in 2014.

The King of Bhutan summarized his philosophy of happiness as follows: “It signifies simply – Development with Values. Thus for my nation today GNH is the bridge between the fundamental values of kindness, equality and humanity and the necessary pursuit of economic growth.”

The Gross National Happiness concept rests on four main tenets:
1) Sustainable development.
2) Preservation and promotion of cultural values.
3) Conservation of the natural environment.
4) Good governance.

Despite the practical success of this “Happiness” concept, there remain many dissidents, who obstinately insist that it is unacceptable because “happiness” cannot be quantified, and hence it becomes difficult to compare countries. The best answer to that is: “Why is comparison a must? Happiness is a personal state, let each nation be happy in its own way!”

Also, let us not forget that Economics, itself, is far from being an exact science – despite what many economists wish to believe. The GNP concept, which is a major measure of macroeconomic performance is not free from mortal weakness, especially when measuring human well-being. A blatant example is the calculation of GNP, where we may include expenses spent on industry that destroys the environment, on medical procedures that fail, or even on destructive wars…etc., thus inflating the size of the GNP and then smugly claim that our economy is growing! And that we are developed.

Alas, it is long and twisted path between happiness resulting from “exuberant consumption” and that arising from inner and spiritual joy not dependent on greed and waste.


4 thoughts on “Happiness and Economics”

  1. يقدم القرآن الكريم نموذجاً للسعادة الدائمة والمثلى، وأبرز مقومات نموذج السعادة القرآني متمثلة في وصف الجنة، وهي باختصار تحقيق الحاجات الأساسية والترفية للفرد بما في ذلك الزواج والطعام والمسكن وفي الوقت ذاته ينعم الفرد فيها بالسلام والأمن والاطمئنان :(لا يسمعون فيها لغواً ولا تأثيما إلا قيلا سلاما سلاما) ولا تكتمل السعادة المثلى من دون تخليص المرء من الأحقاد والضغائن: ( ونزعنا ما في قلوبهم من غل أخوانا على سرر متقابلين)، ومن الواضح بأن تحقيق هذه السعادة بأكمل صفاتها بعيد عن منالنا في الحياة الدنيا لكنها بالتأكيد تصلح كنموذج لما ينبغي أن تهدف إليه المجتمعات البشرية، ومن المؤسف أن تكون المجتمعات الإسلامية بعيدة كل البعد عن تحقيق ذلك، وما أحوجنا اليوم للتخلص ولومن قليل من أغلال الأحقاد التي عصفت بحياتنا وعطلت تنميتنا وتهدد مستقبل أجيالنا القادمة.
    مع الشكر الجزيل على هذا المقال الرائع والموقع المتميز.

    1. وردت الآية الكريمة في التعليق بصيغة غير دقيقة والصحيح:
      (ونزعنا ما في صدورهم من غل إخواناً على سرر متقابلين) مع الشكر والاعتذار.

  2. I agree that it is far from an exact science. You could look at it in a different way. If citizens of Bhutan had the freedom to move to the US or Norway, how many would be ‘happy’ to make the move?

    I personally prefer the inequality-adjusted human development index (IHDI). I do feel it is a better indicator than both. Another way of factoring inequality is the basically difference between the mean and median average in percentage terms.


    1. The “Happiness and Economics” post was a semi-serious/semi-satirical critique of our rigid way of looking at our parameters of success as governments, nations, bureaucrats, as well as people. Many tend to adhere religiously to the conventional national income figures, even though they may not display all aspects of human development and wellbeing.

      The Happiness Index introduced by the King of Bhutan, may have been one early attempt to think-outside-of-the-box. No doubt, as all ideas, it was further developed and enhanced and many variants or offshoots sprang out.

      Almost half a century ago, in “Development Economics” class, we were exposed to the other side of macroeconomics. GNP/GDP figures were not enough, on their own, to measure growth and development. Other parameters had to be assessed and measured, such as, life spans, health data, number of doctors, hospital beds, infancy mortality…etc., all of which are incorporated in the different measures used today.

      No doubt, the HDI is one these attempts to fine tune the measurement of human development, and so is the IHDI. They are both useful indicators of wellbeing and are the results of intelligent people striving to add to the total human knowledge, and in so doing, improve the environment we live in.
      Thank you for your valuable comments.

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