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Measuring Human Flourishing

Many of the problems that people around the world face nowadays derive from a deficiency in the moral foundations of capitalism.

They are collective action problems — such as climate change, biodiversity loss, financial instability, inequalities of opportunity — that are not addressed within the current framework of the market economy. People should be acting in ways that take account of the consequences of their actions for others, but they fail to do so because the capitalist system often gives them incentives to pursue their selfish interest to the detriment of others.

A central reason for this deficiency is that the prosperity of nations and businesses is not measured appropriately. National and business prosperity are measured primarily in terms of GDP and shareholder value, respectively. This deficiency is not inherent in the capitalist system. Rather, it is a failure to measure success within the capitalist system in ways that promote the pursuit of human flourishing.

GDP and shareholder value do not take proper account of environmental degradation and social fragmentation. For example, climate change and biodiversity loss clearly endanger the present and future of humanity, but these phenomena are often not counted as detriments to GDP and shareholder value. Social fragmentation prevents people from engaging in the collective action that is required to overcome such problems, but when globalization and robotics undermine the social fabric of communities, these social consequences are given little attention in our measurement of national and business prosperity.

Capitalism is a system that enables people to mobilize resources, goods, and services in the pursuit of given goals. If the goals are defined and measured inappropriately, then the market system will function appropriately as well. On this account, a major challenge of our times is to rethink the measurement of prosperity, at both the national and business levels.

By measuring prosperity in ways that are consistent with the achievement of meaningful human wellbeing — individually and collectively, now and in the future — by accounting and reporting on such measures, we come into a position of conceiving how the capitalist system can be redirected to serve the genuine interest of humanity and the rest of the natural world.

The G20 can play an important role in the redirection of capitalism by instituting a measurement of prosperity focused on human wellbeing derived from meaningful, fulfilling lives lived in thriving societies.

The Approach

The holistic measurement of prosperity should cover the following domains:

  • Economic domain: Goods and services that sustain a person in a healthy and secure life in dignity without reducing the gain to others
  • Social domain: Social solidarity (the set of psycho-social mechanisms that creates and maintains pro-social group-level functional organization) and agency (the exercise of one’s ability to individually or collectively make and enact decisions through one’s effort that are beneficial for life)
  • Environmental domain: Environmental stewardship (the responsible use, protection, and regeneration of the natural environment, aimed at promoting and preserving the health and stability of ecosystems)

These measures adhere to the following principles:

  • Universalizability: to identify major normative components of wellbeing, which extend beyond cultural, national and religious boundaries;
  • Simplicity: to focus on maximally four components of wellbeing, since that is the number of independent pieces of information that can be kept in working memory at the same time, on average;
  • Regularity: to measure these normative components of wellbeing with the same regularity as GDP, which implies annual or quarterly measures;
  • National scope and duration: to measure the dashboard for most of the countries of the world over sizable time spans, so that national performance (beyond GDP) can be compared across nations and through time.
Desirable Outcomes
  • Measuring economic, social and environmental prosperity consistently for 100+ countries, including all G20 countries
  • Measuring economic policy impacts consistently across countries
  • Measuring business performance consistently across major international companies
  • Promoting this measurement approach among G20 and G7 policymakers as well as business leaders

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