There's a stushie in Scotland about what a "wellbeing economy" means. Katherine Trebeck says it implies the question: who's winning, who's losing?
Photo by Bernard Hermant on Unsplash
There’s an interesting debate going on in the Scottish Parliament, triggered by the recent context for SNP Leader and thus First Minister, about what a “wellbeing economy” means.
The term became a marker of a “left-of-centre” vs “right-of-centre” take on the direction of the Scottish economy - the (winning) side of Humza Yousaf using it to signify that “economy should serve society”, the (losing) side of Kate Forbes stressing that rising conventional economic growth would be need to “pay for” such a wellbeing nation.
This article in Holyrood magazine sets out the deep background to the debate. The voice in this we’re happiest to hear is that of Katherine Trebeck, an Australian-born economist who has been pushing a “beyond GDP” approach to economic goals for years with the Scottish government (see our archive with Katherine, and on wellbeing economics, here).
The piece opens with the Scottish governments aims - eradicating child poverty (one in four live that way), and achieving a well-being economy. The term’s history and purpose (“a system which works better for society as a whole, which prioritises public health, education and tackling inequality alongside delivering growth”) is well described:
There’s long been disquiet about using gross domestic product (GDP) as the key metric for judging how economies are performing. As far back as 1968, Robert F. Kennedy used a speech on the presidential campaign trail to talk about how gross national product (a similar measurement to GDP) “counts air pollution and cigarette advertising…[but] does not allow for the health of our children, the quality of their education, or the joy of their play”.
In 2008, French president Nicolas Sarkozy asked economists Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi to publish a report that identified the limits of using GDP as an indicator of economic performance and social progress, and to consider what other measurements could be used to gauge the wider socio-economic benefits of growth.
The resulting report, which also drew on contributions from Angus Deaton, the Scots-born Nobel Prize-winning economist who has written about “deaths of despair”, concluded it was time to “shift emphasis from measuring economic production to measuring people’s wellbeing”.
In publishing their report, the economists were at pains not to dismiss the importance of GDP as a measurement, but made the point about there being an “increasing gap” between what was contained in the data and what counted towards people’s wellbeing.
In the years since, the idea has gained increasing currency, particularly when juxtaposed with the UK Government’s austerity programme which has been blamed for causing 130,000 preventable deaths in the years between 2012-19 and is thought to be behind recent falls in life expectancy.
As early as 2007, Scotland introduced the National Performance Framework which set out a series of national indicators against which progress towards goals on health, education and the environment can be measured. And now Scotland has its first cabinet secretary for wellbeing economy, Neil Gray, a position that was created during Yousaf’s first reshuffle.
Katherine Trebeck responds:
I don’t think [GDP] is going to be dropped instantly but what we can do is take it off its pedestal. Economists have been recognising for decades the flaws of GDP and the very creator of GDP, Simon Kuznets, recognised its limit and warned not to use it as a proxy for the welfare of a nation.
It’s taken on a disproportionate role in discussion of the economy… and I think it has a lot of perverse incentives, which is a risk for policy makers. It takes the good, the bad and the ugly of economic activity and calls it all good.
The benefits of growth in the last few years have gone to those at the top – it hasn’t trickled down. Currently how the economy is generating resources and distributing them is not working for enough people. Putting the word ‘wellbeing’ in front of the economy means we have to take a good, hard look at how the economy is designed and who’s winning and losing out of that.
There is a risk of weak implementation and a use of the term [wellbeing economy] just to describe business as usual… It’s important to keep talking about the fundamental mindset shift that the wellbeing economy is about. It’s not enough to have just one or two core policies, this is about re-thinking the economy so that it serves us rather than the other way around.
More here. We ran a piece on Trebeck’s book The Economics of Arrival in 2019, which had this quote:
Perhaps the question to ask is this: what would society look like if we valued the business of taking care of everyday life more than the apparently more alluring business of making money? If greater productivity didn’t always have to mean more output, it would enable a reallocation of the efficiency gains offered by some technologies, increase motivation to shorten the working week and enable more people to remain in employment.
This would value purposeful work as a good thing in itself, rather than simply as a means to increase incomes and expenditure, and as a cost that employers should seek to minimise. The sort of work that is conducive to the task of making ourselves at home would be cultivated – via a new materialism that requires higher labour input.
Imagine, for instance, how the relatively labour-intensive craft, care and repair economy, supported by a high-technology base, could offer resource-light, income- earning activities in roles that enhance that scope to make ourselves at home: entertainers, for example, or preventative health workers, artisan manufacturers and organic farmers.