New Zealand, as it turns out.
Last month, the island nation released its first “Wellbeing Budget.” Contra most national spending plans, the goal of the coming year’s appropriations is not to boost gross domestic product but to increase the happiness of the country’s citizens. In the next fiscal year, all of New Zealand’s noncore spending must be oriented toward five well-being goals: improving mental health, reducing child poverty, supporting indigenous people, transitioning to a low-emissions economy and thriving in a digital age. And to measure success, the government will track nontraditional indicators such as perceived environmental quality and sense of belonging.
It remains to be seen how effective this new budget will be at addressing the issues it calls out, or whether the initiative will outlast the tenure of progressive Prime Minister Jacinda Ardern. But as a statement of values and a signpost for other modern governments, it’s a major step.
Gross domestic product, as a measure of a nation’s overall economic output, was introduced to Congress in 1937 during the Great Depression. It was meant to be a measure of production, not some absolute measure of national success — “The welfare of a nation can scarcely be inferred from a measurement of national income,” its inventor, Nobel Prize-winning economist Simon Kuznets, wrote in 1934. Still, following the formation of international financial institutions after World War II, GDP became the standard tool for evaluating a nation’s economy.
Today, growth is seen as a shorthand for progress. But while the U.S. economy may be strong, more money doesn’t necessarily mean more happiness — at least, after a certain point. The economy has been on a hot streak for years, but that hasn’t neutralized deaths of despair, homelessness, or a creeping sense of anomie. New Zealand’s economy is healthy enough, but the country is still experiencing a suicide crisis.
Of course, growth is an aggregate measure — some parts of the economy rise while others stagnate or even fall. There are nuances to GDP as a measure that are frequently overlooked. One theory for why our happiness hasn’t increased in tandem with our economy is that the benefits of all the growth we’ve achieved aren’t going to those who need it — widening inequality is eating it up. Still, our economic models are built on expectations of continued expansion.
GDP numbers can drive inflation, interest rates and debt. It would be difficult to untwine the system by which we measured much of the past 80 years — but that isn’t really New Zealand’s goal. Its new budget is a statement of priorities more than anything. What matters most to them? What should matter to us?
New Zealanders are defining their well-being around mental health and support for families and indigenous communities. One of the most talked about investments is $200 million dedicated to survivors of domestic and sexual violence — the largest of its kind, and an enormous amount for a country whose population is about the same as Alabama’s.
We could do something similar if we wanted to. Years of growth mean that the United States is not actually short on funds — the question is simply where they go. Focusing on well-being here might mean cutting back on less socially contributive programs (how many malfunctioning F-35s does our military need, after all?) and reorienting our spending toward projects that increase social stability, whether through family supports, racial reconciliation or environmental conservation. We could agree that goosing innovation, while generally a positive goal, is not the only thing that matters — and spend accordingly.
It’s a question of values, though, and ours are currently skewed in the opposite direction. But even in the Nordic countries, which are consistently ranked among the world’s happiest, some complain that the lack of economic intensity keeps Finland and the rest from producing the world’s Facebooks and Amazons. Still, I personally would sacrifice the invention of Facebook for any manner of advances in well-being — from a reliable national health-care system to free lunches for kids at public playgrounds. (It’s customary in Helsinki.)
“Growth alone does not lead to a great country,” Ardern wrote in her introduction to the 2019 budget. “So it’s time to focus on those things that do.” What could we change if we did the same?