The Blog: The well-being economy

This began by observing that “modern economies have lost sight of the fact that the standard metric of economic growth, gross domestic product, merely measures the size of a nation’s economy and doesn’t reflect a nation’s welfare”. It is time, Kapoor and Debroy argued, for the limitations of GDP to be acknowledged and for it to take into account a society’s quality of life.

The authors quoted Robert Kennedy, whose election speech in 1968 contained this comment: “GDP measures everything in short, except that which makes life worthwhile.” Kennedy, like his brother tragically lost to the world through assassination, displayed an understanding of the times in which he lived, and his reflections on GDP are every bit as appropriate today as they were when civil rights and war consumed a US society with a counterculture that had spawned the Summer of Love.

The article stated that “the end goal is to have a more just and equitable society that is economically thriving and offering citizens a meaningful quality of life”. Percentage points of GDP, rarely connected with the lives of average citizens, “will cease to take centre stage”.
Kapoor and Debroy thus moved forward a discussion of how a nation’s competitiveness and economic well-being should be measured. It isn’t simply, or shouldn’t simply be calculations of consumption, investment, exports, imports and the like.

Professor Sergio Moreno of the University of Las Palmas is an expert in tourism planning and sustainable development and adheres to the idea that GDP needs to be reconceived and take account of a well-being that isn’t solely defined in economic terms. He accepts that well-being, that of people, is an intangible but he is proposing an approach to GDP which places the economics of well-being at that centre stage which Kapoor and Debroy propose. Well-being can be made tangible, and the way to do this, where Spain is concerned, is to realise that tourism is a vital aspect of well-being.

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Moreno draws a comparison with Germany, where the economy is known for the manufacture of cars. Spain, on the other hand, is Europe’s principal provider of well-being, and this is because of tourism. Spain is the main well-being supplier, and this is at a time when health is a priority. Tourism, he argues, has not adequately communicated its essence and its value or the contribution it offers beyond conventional economic numbers. It needs to do so, and this will have implications for the development of the Spanish economy.

It is a novel concept. Tourism, and this is why so much attention is paid to all those statistics for tourist spending, is an export. It is a productive sector to be monetised by the Bank of Spain’s balance of payments equation. As such, the human factor is removed. The logic of the Moreno argument, however, is that tourism is rethought.

It is the production and export of well-being. It ceases to be tourism per se, as it is a giant productive system of welfare for visitor and citizen, as an economy that considers its GDP and competitiveness in ways other than the hard numbers of economics emphasises the well-being of the citizen.

It is an approach which is entirely compatible with aspects of sustainable development. To take one, the environment, well-being presupposes conservation. Well-being is enhanced by cared-for environment; it is diminished by degraded environment. But what of the well-being that is a further aspect of sustainable development and which is far more tangible than a beautiful landscape - that of employment and the hard numbers of personal earnings?

It is perhaps the case that a well-being economy comes at a premium. If Germany can produce cars for which premium prices are paid, then does the well-being economy follow a similar model? People pay more to feel good in the same way as they pay more for a Mercedes, but this feeling good has to have all the quality of German engineering in order that they really do feel good and are prepared to pay. In turn, this translates into workers’ personal financial well-being.

I fully accept, and have said so previously, that now is a time to worry about the present rather than the future. But rethinking tourism is very much on the agenda, and Moreno is rethinking it in a way I have never come across before.