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Genuine Progress Indicators

Vermont has become the first state to formally embrace a ‘genuine progress indicator’ as a metric of well-being

Posted on Jun 7 2012 by Alex Wilson

The second annual Slow Living Summit was held in Brattleboro this past week. Featuring such presenters as David Orr of Oberlin College, Woody Tasch, the founder of the organization Slow Money, and Charles Eisenstein, author of Sacred Economics, along with Governor Peter Shumlin, and Senator Bernie Sanders, the conference advanced alternatives to fast food, fast money, and the fast pace of life — with an emphasis on local food, local economies, resilient communities, and sustainability.

According to the Slow Living Summit website, slow living expresses the fundamental paradigm shift that is underway in this age, recognizing the transformative change from faster and cheaper, to slower and better — where quality, community and the future matter. It’s about slowing down and becoming more mindful of our basic connection with land, place, and people, taking the long view that builds a healthy and fulfilling way of life for the generations to come. It is about common good taking precedence over private gain.

While there were many inspiring sessions at the Slow Living Summit, I’ll focus here on just one: a session addressing alternative metrics of success: genuine progress indicators.

The problem with GDP

Perhaps no one has articulated the problems with measuring our society’s success using the metric of gross domestic product (GDP) or gross national product (GNP) better than Senator Robert Kennedy, way back in 1968:

       “Our gross national product — if we should judge America by that — 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 those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

       “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. And it tells us everything about America except why we are proud that we are Americans."

Gross domestic product emerged as a metric of our country’s total economic performance following the Great Depression. It is the value of a nation’s goods and services produced over an entire year. That single metric became the default measure of our society’s well-being, a job for which it is poorly suited.

Introducing GPI

To address this concern, there have been various alternative metrics proposed to measure societal well-being. These efforts were covered at the Slow Living Summit session I attended. Tom Barefoot, founder of the Waitsfield, Vermont-based organization, Gross National Happiness USA, provided context on this type of accounting, and Chelsea Ferrell, previously of the School for International Training in Brattleboro, provided (via Skype) some personal observations of this mindset from her travels in the Buddhist nation of Bhutan, whose king, Jigme Singye Wangchuck, coined the term “Gross National Happiness” in 1972.

In the same session, Jon Erickson, a professor and managing director of the Gund Institute for Ecological Economics at the University of Vermont, described Vermont’s ground-breaking approach to such alternative metrics of well-being. Last month, Vermont Governor Peter Shumlin signed a bill passed by the Vermont Legislature to develop and test a genuine progress indicator for the state.

As described in the enabling legislation, “the purpose of the genuine progress indicator (GPI) is to measure the state of Vermont’s economic, environmental, and societal well-being as a supplement to the measurement derived from the gross state product and other existing statistical measurements.” The legislation instructs the Secretary of Administration to work with the Gund Institute to establish and test this GPI — initially by January 15, 2013 and every other year thereafter.

A similar GPI was developed in Maryland in 2010 as an initiative of Governor Martin O’Malley, but the Vermont action is the first time a state has taken formal legislative action to create such a metric.

The exciting thing about genuine progress indicators is that decision-making and policies will be able to be based on data that considers not only the monetary value of transactions, but also metrics of health and well-being of residents, environmental protection, natural resources, and sustainability. When we are able to base decision-making on such indicators of genuine progress, momentum will likely increase for natural resource protection, energy conservation and renewable energy sources, income equality, public health, and a host of other issues that will help to ensure a healthy, prosperous state.

Alex is founder of BuildingGreen, Inc. and executive editor of Environmental Building News. He also coauthored BuildingGreen’s special report on windows that just came out. To keep up with Alex’s latest articles and musings, you can sign up for his Twitter feed.


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  1. Alex Wilson

1.
Mon, 06/11/2012 - 01:11

Thanks for sharing this info, Alex
by Rob Wotzak

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Have you ever heard about the period in the 30s when the Kellogg Company shifted to shorter work weeks? I think it was mostly billed as a means to create more jobs during the Depression, but it seemed to also boost the quality of life of the workers and their families. I've heard it described as a sort of Renaissance for Battle Creek, Michigan. This article goes into the details quite a bit: http://www.context.org/iclib/ic37/hunnicut/


2.
Mon, 06/11/2012 - 09:42

Response to Rob Wotzak
by Martin Holladay, GBA Advisor

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Rob,
Thanks for the link to the story about the Kellogg Company workers. Very interesting.


3.
Wed, 06/13/2012 - 22:46

GDP and well-being
by Jesse Smith

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It's a great article and interesting issue, Alex. I'm a huge fan of both you and Martin Holladay. It's rare for a day to go by without my discussing some content from this site with clients or friends.

While measuring things related to the preservation of the environment is clearly important, it seems like throwing in measures of well-being could have mixed results. It will be interesting to see what happens with GPI in Vermont.

The quote from Robert Kennedy's speech is beautiful, but not entirely accurate. There's a strong relationship between GDP and well-being. This is not to say that we shouldn't be using other measures, but it's hard to ignore the fact that rich people/countries are happier than poor people/countries. Justin Wolfers and Betsey Stevenson have looked at this and related problems in depth. From a recent interview:

"If you look at the correlation between GDP per capita across countries and the average score on the wellbeing scale, we see that those two things have a correlation of 0.82."

Full text of interview here:

http://businessjournal.gallup.com/content/154949/Leaders-Mastering-Tradi...


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