Measuring Social Welfare

I will be attending a presentation by an old friend, Tom Barefoot, tomorrow night in Northampton on Gross National Happiness.

It is happening at the Media Education Foundation offices at 60 Masonic Street, Northampton, MA at 7:00 pm. Come.

http://www.gnhusa.org/

A group of Vermonters have been meeting to formulate ways to assess whether their communities are succeeding or not, whether people in the state are happy, and growing happier or less so.

Many factors affect one’s sense of well-being. The measurement of well-being is by definition subjective, and therefore any standard definition will be subject to criticism. The choice though is whether to measure something that provides a great deal of objectively comparable information, or to neglect to measure what is important.

I looked at the GNHUSA website and the methodology that they use to measure happiness, and frankly my impression is that it needs work. They have a link to a “sustainable Seattle” questionnaire that also seemed a little thin to me (that’s my code for needing work).

I have an alternative.

It is also simple, and is derived from Maslow’s heirarchy of needs. It is a measure of results, not of causes.

1. Survival:

To what extent did you successfully meet the following needs over the past month, and expect to over the next month (0 – 9)

A. Food                                              0    1    2    3    4    5    6    7    8    9

B. Water                                              0    1    2    3    4    5    6    7    8    9

C. Shelter                                            0    1    2    3    4    5    6    7    8    9

D. Warmth                                          0    1    2    3    4    5    6    7    8    9

E. Free from Illness/health         0    1    2    3    4    5    6    7    8    9

F. Sleep/rest                                      0    1    2    3    4    5    6    7    8    9

G. Work                                                0    1    2    3    4    5    6    7    8    9

2. Safety/security

To what extent did you successfully meet the following needs over the past five years and expect to over the next five years?

A. Food                                                0    1    2    3    4    5    6    7    8    9

B. Water                                               0    1    2    3    4    5    6    7    8    9

C. Shelter                                             0    1    2    3    4    5    6    7    8    9

D. Warmth                                           0    1    2    3    4    5    6    7    8    9

E. Free from Illness/health         0    1    2    3    4    5    6    7    8    9

F. Sleep/rest                                       0    1    2    3    4    5    6    7    8    9

G. Work                                                  0    1    2    3    4    5    6    7    8    9

H. Safety from bodily harm           0    1    2    3    4    5    6    7    8    9

I. Safety from persecution             0    1    2    3    4    5    6    7    8    9

3. Love/Belonging

To what extent did you successfully meet the following needs over the past five years and expect to over the next five years?

A. Close friends                                     0    1    2    3    4    5    6    7    8    9

B. Multiple acquaintences                0    1    2    3    4    5    6    7    8    9

C. Close family                                       0    1    2    3    4    5    6    7    8    9

D. Fulfilling love relationships       0    1    2    3    4    5    6    7    8    9

4. Esteem

To what extent did you achieve your goals for self-respect and respect of others over the past five years?

A. Career and/or life achievements  0    1    2    3    4    5    6    7    8    9

B. Mastery of a profession or craft     0    1    2    3    4    5    6    7    8    9

C. Development of confidence             0    1    2    3    4    5    6    7    8    9

D. Respect of others’ accomplishment   0    1    2    3    4    5    6    7    8    9

E. Respect of you                                        0    1    2    3    4    5    6    7    8    9

5. Self-Actualization

To what extent did you achieve your goals for self-fulfillment, in action and experience?

A. Ethics                                                          0    1    2    3    4    5    6    7    8    9

B. Creative expression                              0    1    2    3    4    5    6    7    8    9

C. Design/problem solving                     0    1    2    3    4    5    6    7    8    9

D. Peacemaking                                           0    1    2    3    4    5    6    7    8    9

E. Acceptance and magnaminity         0    1    2    3    4    5    6    7    8    9

F. Sincerity                                                    0    1    2    3    4    5    6    7    8    9

G. Study                                                           0    1    2    3    4    5    6    7    8    9

H. Work life in the “zone”                         0    1    2    3    4    5    6    7    8    9

I. Sense of humor, irony                          0    1    2    3    4    5    6    7    8    9

J. Self-motivation, determination       0    1    2    3    4    5    6    7    8    9

K. Self-reflection                                         0    1    2    3    4    5    6    7    8    9

6. Spirituality

To what extent did you realize spirituality in contemplation and action? To what extent did you inspire others?

A. Sense of unity of all things and

your connection to ALL                          0    1    2    3    4    5    6    7    8    9

B. Sense of truth                                          0    1    2    3    4    5    6    7    8    9

C. Sense of beauty                                      0    1    2    3    4    5    6    7    8    9

D. Life of heartful passion                       0    1    2    3    4    5    6    7    8    9

E. Sense of harmony                                 0    1    2    3    4    5    6    7    8    9

F. Sense of surrender/agency               0    1    2    3    4    5    6    7    8    9

G. Inner courage                                         0    1    2    3    4    5    6    7    8    9

H. Contemplation                                       0    1    2    3    4    5    6    7    8    9

If you are willing, fill out the enclosed questionnaire, e-mail it back to me, I’ll enter the data into an analytic “happiness” spreadsheet and I’ll tell you how happy you are. (a joke, not really. I think the measure is representative.)

rswitty@verizon.net.

The data and interpretation varies by age. Students tend to be very confident of their survival, security, belonging needs, but have not yet experienced sustaining esteem building accomplishments. Unemployed tend to score low. Elderly tend to score low.

I think that largely reflects reality, how happy people really are.

The top score is around 120, the lowest around 1. If social welfare is the measure of the success of an economy, this scoring institutionalizes the assumption that a fully actualized financially secure person generates at maximum 120 times the well-being of a poor and depressed and alone person.

It does suggest that if resources can be dedicated to near universal survival and security, that that realizes a higher impact on community welfare than highly educating and nurturing a single person.

Whats the right number, the accurate difference between the optimal and the minimal happiness in the world? 120, 240, 24000? Hard to know.

It is a certainty that a relatively small amount of resources creating a safety net makes a BIG difference in social welfare. Whether charity or government should make that safety net is an open question.

And, whether we, through our employment, our charitable institutions or through our governance, are realizing optimal social welfare per the activity in our economy, is another profound question.

In measuring social welfare, as distinct from individual welfare, it is also an open question whether scores of youth should be weighted comparably to scores of elderly. Maybe we should weight the scoring socially by years of life expectancy remaining (squareroot of 25+ life expectancy. I at 56 would be weighted at the squareroot of 55  – 7.6, while my 19 year old son weighted at the squareroot of 82 – 9.1, while my 86 year old mother would be weighted at the squareroot of 25 – 5.0). I know. I’ll never be elected president for my advocacy for “death panel” social welfare scoring.

The primary concept of referencing social well-being as the measure of success or failure of an economy/society rather than secondary measures like GDP or cumulative gross net worth, is sound, more than sound.

The question now is to develop tools that are credible enough to be trusted sufficiently to be used, and then relied on (and always refined).

There is a tendency to attempt to measure cause in too great a detail, to the point that the metric itself embodies specific sets of values that are not universal in fact, and then represent an imposition of the values by the measurement. In this exercise we need to measure. We live in a democracy with contending worldviews and definitions of success. To the extent that the measure itself is free from bias, it will be relevant, accepted, used.

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21st Century Economy – Three Realities

1. The World is Flat – The internet is here to stay, and has and will continue to change everything about personal and social life. Between the period of my college education and now, we’ve gone through the introduction of computers at all, to affordable microcomputers (office productivity for all), to e-mail, to the world wide web as a broadcast medium (static pages), to the interactive world wide web and web commerce, to ubiquitous web services for virtually every need. Ways of delivering services that were previously unimaginable are now second nature, especially to our children.

Thomas Friedman wrote a book a few years ago entitled “The World is Flat”, describing the significance of the Web, cyberspace as a permanent fixture in modern life.

(Still, when the power fails, it is impossible to use the internet. We are then helpless. It used to be possible to just go and do something different. Now, many of us are so wired, so dependent, that when the web is unavailable, we are lost, sometimes literally.

Living in an area that is not sufficiently wired is a big disadvantage in the modern world. Out of cell-phone range, isolated, powerless, trouble. Dial-up internet access, isolated, powerless, trouble. It constructs an entirely new class system, those with access and skill vs those without access and skill. And, it is a BIG class divide.)

The web is here to stay. Those of us that are old and in the way, are moreso. (Maybe every generation feels the same).

2. Sustainability is here to stay.

As a global and national economy, we’re hitting stress points, limits on our ability to grow in particular. There are MANY of them. Land for residence, land for food, water in many places. We generated an enormous amount of short and long-term toxic materials, and are step by step exhausting the places they can be safely disposed. Most importantly, we are running out of a gamut of key materials and fuels. They are expensive, if not impossible to extract. And, we are ignoring the limits of our bio-psychological ability to deal with the stress of 24/7 life. Many have replaced social life, friendships, with addictive diversions and work, as the norm.

21st century life will have to be economical (in more than just money), minimizing the use of fossil fuels, toxins, emphasizing community. I’m 56, so I’ll see only a couple decades of 21st century life, but my children and grandchildren will have to and get to live in it and deal with it.

3. The wealth in the world is becoming dysfunctionally maldistributed. In Western Massachusetts there really aren’t the super-super-rich that we read about, but wealth has stopped being generated for the most part by the lifting of all boats, and is now back to 19th century levels of a zero sum. That is that an increase in the wealth of the very wealthy, reduces the wealth of the rest.

The math of business convention makes this inevitable, and accelerating. People that work save. Its an additive process. One saves $5,000/year and at the end of 5 years, has just a little more than $25,000.

At some point, the process of savings shifts to a process of investing. Investing is an effort to multiply one’s net worth, say seeking 6% return per year. Over time, that multiplying can only come from the rest of the world, especially for the very very wealthy. If money is invested in enterprises that do actual work, and primarily employ people to do that work, then that will lift all boats. In the modern world, a large portion of business and profits is speculative, profiting on gains, not creating value.

Most importantly, the absence of disposable income on the part of many Americans, results in there being no functioning marketplace (consumers CHOOSING their spending), and an overheated marketplace in finance. So, the stock markets are volatile, while the Main Street markets are stressed, and do not function as a responsive system between consumers and providers.

The appropriate response?

1. Learn the skills and the new norm of the 21st century internet economy.

2. Live simply, live locally, spend discretionary spending locally, make good soulful friends, know thyself and value a spiritual life. Start enterprises that shift from growth to maintenance/care.

3. Create social equity. Form actually progressive tax laws, simple ones. Build honest and strong families, friendships, communities, regions, macro-regions. Decentralize every economic scale one step more local and make sure that every region has enough capital flowing through it, and like capillaries (that get blood to EVERY cell), not just big arteries.

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#AND#

The root of “all” of our social/political/economic failings can be laid at the feet of our inability to consider #AND# logic about the health of social groups that we participate in.

Specifically,

We have reduced the measure and application of our social/ecological well-being to considering the health only of two scales, individual and world  (usually expressed as global in the giant economy).

While, in fact, in order to survive ultimately, we have to consider multiple communities and entities’ health in our design and practice. It is the difference between binary thinking and ecological.

Even though the twenty first century economy includes the transglobal “cloud” as its home, the living entities in the world live in place, and at varying interdependant social scales.

We live in holarchy (nested wholes). Trees are excellent examples.

If you look at an individual tree, it is elegant, precise, artfully designed for its life and death, a stimuli of awe.

If you look in further detail, and examine a leaf of a tree, it is similarly elegant, precise, artfully designed for its life and death, a stimuli of awe. The tree cannot function without leaves working  (if not every individual leaf). And, the leaf cannot function without every other “tree-ish” organ working.

Similarly at a higher level of detail. If you examine a cell of a leaf, it is similarly elegant, precise, artfully designed for its life and death, a stimuli of awe. The leaf cannot function if the leaf’s cells are not working.

Again, at a higher level of detail. If you examine the molecules of the cell of a leaf, it is similarly elegant, precise, artfully designed for its life and death, a stimuli of awe. The leaf’s cells cannot function if the leaf’s molecules are not working.

And, if you went the other way, looking at a forest, elegant and interactive and interdependant. And further in breadth, at a biome, elegant. At a regional ecology, at a continent, at a planet, at a solar system, at a galaxy, and on and on.

I do not mean to present a meditation, an abstraction, not the easy, cheap and vain enlightenment of pithy phrases.

I mean to suggest that the health of the national economy is dependant on regional economies functioning well and healthily, on them getting blood (capital) and oxygen (engaged work). And, regional economies are dependant on micro-regional economies functioning well, healthily. And, micro-regional economies are dependant on families and close communities functioning well. And, families are dependant on individuals functioning well.

It is an #AND# statement. It requires simultaneous health.

The sin of mega-corporations, “labor-saving”, is not that they are individually corrupt and greedy, but that they abuse and then destroy the ecological. They ignore and then destroy the relationship of a healthy region in a healthy globe. They ignore and then destroy the relationship of a healthy community in a healthy region.

There is literally NO setting in natural ecology, in which a dominant entity has ignored that it is dependant on healthy habitat and community, and continued indefinitely.

The stresses that we witness, the risks to social resilience, are all of the breakdown of respect for the interdependance between entities of differing social scales. Nuclear plants in Japan don’t serve the community that they are in, they serve the nation only. We see and will see much more, the breakdown of economies comprised of temporarily healthy giant corporations failing to support healthy communities, but only seeking to serve masses of individuals (corporation serving customer only, better that that relation be down well, but in the context of an ecology if it is to sustain).

Social/political/economic  leadership then has to be aware of, design, provide for the intermediate social scales that are equally the primary measure of success as a high-quantity global output and temporarily high global corporate profits.

Every node healthy. #AND# logic.

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Nukes

The word from Japan at this moment is that two nuclear plants have experienced at least partial melt downs, and exhausted some radioactive material into the atmosphere, though not the full blown toxic cloud that is possible in a complete meltdown (when radioactive groundwater under the plant boils and exhausts to the atmosphere, then blow with the wind).

Two other plants have experienced exposed fuel rods and are likely to at least partially melt down, and two other additional plants have experienced damage to fuel rods and could at least partially melt down.

The people in Japan are suffering, many dead (close to 10,000), many homeless, many scared. People downwind are scared.

There are many nukes built on fault lines. Many in Japan, one in California, one in Turkey, one in Taiwan.

Close to home, Vermont Yankee (13 miles from my home) is built on a minor fault line. Indian Point in Westchester similarly. These are old and relatively fragile plants. Three days after it went into shutdown, the Maine Yankee plant was hit by a small earthquake.

A few years ago, Stewart Brand surprised the world by declaring his advocacy for nuclear power as a means to avoid global warming. It seemed like a good idea at the time.

Close to home, Vermont Yankee is in the process of requesting an extension of its operating license that would otherwise expire in 2012. The plant is old, has received many citations for immaterial and material violations of safety standards, including more than a few published releases of radioactive material from the plant.

Vermont state representatives largely oppose the reliscensing of the plant, however the nuclear regulatory agency has tentatively authorized the license extension and Entergy, the company that owns Vermont Yankee has threatened to sue the state if they interfere.

I think of the relicensing of the Vermont Yankee plant as similar to the mortgage market “meltdown”. Each year, the likelihood of accidents increase, but the payout to towns  remains at best constant. The odds of the sure thing of some jobs and subsidized property taxes weighs against the increasing likelihood of accident (incidental or devastating).

The risks are ignored. Then we either make it out clean and the plant is later successfully decommissioned, or there is an accident at some point between now and 2042.

In spite of a very negative economic impact report submitted by Entergy to the state, in support of their relicensing request, State legislators regard the economic, social and environmental risks associated with an aging and less than confidently managed plant, as more compelling than the fears of economic collapse in Brattleboro and surrounds should the plant close.

In the economic feasibility report, Entergy more or less acknowledged that they had not sufficiently funded the required decommissioning fund, even though incorporated into regulated rates paid by Vermont ratepayers.

Opponents of the plant cite the economic impact of decommissioned plants in Rowe, MA and southern Maine, as indications of the likely consequences of shutting down the plant. In both cases, the locales experienced temporary downturn (from their former highly subsidized status), but revived slightly, and to a higher standard of living and continuing property tax subsidies than in neighboring towns.

The promise of cheap oil is past. The promise of cheap natural gas is past. The promise of cheap hydro remains. The promise of cheap wind generated electricity remains (though limited to areas with consistent wind). The promise of cheap nuclear power is likely now past. The risks are too great.

The only promise remaining that we can act on, is of energy conservation, radical energy conservation. Rather than shooting for 10% reduction in the consumption of fuels used for space heating, we should be making capital improvements to buildings that realize 80% reduction. Similarly in our transportation models.

Our current $3.45/gallon gas is cheap. If the economy continues to grow, in three years it could easily be $7.00/gallon, and that due entirely to supply/demand limitations before the impacts of peak oil affect limitations at the wellhead.

Maybe now we’ll get serious about it. Its not nuclear science after all.

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The Desirability of Regionalism

A regional economic policy is necessary to ensure against disruptions in the global and even domestic supply chain. And, regionalism is necessary, to minimize the total cost of the supply chain considering the increased costs of transportation, especially of bulky goods like food, textiles, even building materials.

Beyond that, and probably more importantly, regionalism is desirable because it makes it possible for accountability between end user and all phases of the supply chain. Currently, if a consumer (end-user) cares whether the workers that assembled a shirt worked in acceptable conditions and were paid a living wage, and that supply chain extends beyond international borders, there is no way that they can be confident that that is the case. Where a consumer relates to their spending as a relationship through a supply chain, they will naturally desire that that relationship be a benevolent one at each phase.

Only those that literally callously just don’t care that their purchasing may be of literally slave labor, accept the absence of accountability through the supply chain.

In the current global economy, that universal accountability to labor standards, environmental standards, etc. doesn’t exist. It is possible that they could exist in some future, that there can be universal disclosure and regulation of working conditions, environmental affects, living wage, etc.

But, that time is far away, and with many institutional barriers.

Even if they did exist, regional economy affords the possibility of personal accountability of consumer to producer. It is possible to visit the plant, within a day’s drive. It is possible to personally speak with the assembler, speak with the executives.

Inherent in the idea of regionalism is the idea of integrated basically self-reliant regional economies, comprising a diversity of solutions to common problems. Where does protein come from regionally? The solution varies region by region. Where do building materials come from regionally? Again varying region by region.

Inter-regional trade is obviously still a critical component of an economy, but as an addition to a self-reliant regional economy, not as an exception to it.

It is desirable to structure a variety of approaches to similar (not identical) problems. Global cookie-cutter approaches abuse individual  and regional diversity too much. They put too much at risk, including disruptions in supply chain, loss of regional skills, loss of sufficient regional capital to finance enterprise.

The difference between an economy in which people know who and what went into products and services and one in which consumers and suppliers are entirely anonymous, is profound.

The regional scale of economy makes it possible for the majority of economies of scale and productivity to be realized, while preserving the accountability of a human economy (rather than strictly anonymous one).

It is possible.

I just watched one of this week’s Sunday Morning News shows – “This Week with Christian Amanpur”, speaking about a proposal for Americans to “buy American”, even an incremental shift.

Regionalism is a different emphasis, but with some of the same logic. In mathematical simulations of inter-regional vs intra-regional trade, it bears out that if people spend an average of 40% of their spending from local sources, that that will result in a net increase in community wealth, regardless of the degree of extra-regional trade.

It is possible then for every region to be economically healthy.

In a global economy, only exporting regions are economically healthy, and at the expense of the rest of the world.

Goods and services are cheaper to purchase, but fewer and fewer have the purchasing power to purchase even the cheap goods.

Regionalism is the optimal balance.

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