I wasn’t a memorable economics student at varsity. In fact I nearly failed the subject in my first year, partly because I’d spent too much time helping to stick and paste the student newspaper together, but mostly because I found the “social science” of economics counterintuitive.
As if it wasn’t hard enough deciphering gobbledygook to get to the components of gross domestic product (GDP), now the most widely used measure of economic activity, one then had to substitute GDP – the monetary value of all market production – for economic well-being and social progress. If that leap of logic sat uneasily, maybe it was better one stuck to the arts.
Perhaps out of stubbornness, I persevered with economics. In my second year I asked a lecturer about rescheduling a mid-term test due to other commitments. He laughed, and told me about the benefits of power napping. That was the closest I got to discussing sleep in economics.
These days, there’s more to talk about. In Bhutan, happiness involves a minimum of eight hours’ sleep a night – an official figure that influences macroeconomic policy.
The Himalayan mountain kingdom’s “gross national happiness index” offers nine index variables and dozens of metrics to measure this concept. Time-use is one of the indices, and it lists the happiness threshold for sleep at eight hours and for working at seven hours.
Bhutan first developed its happiness index in the 1970s, and four decades later the idea seems to be catching on. In 2008 French President Nicolas Sarkozy commissioned a panel of social scientists led by Joseph Stiglitz, the Nobel-winning economist who advises our very own Economic Development Minister Ebrahim Patel, to identify the limits of GDP and consider more relevant indicators of social progress.
Stiglitz and company noted that had there been more awareness of the limits of standard metrics like GDP, “there would have been less euphoria” in the years leading up to the 2008 financial crisis.
They also pointed out that standard measures of economic performance looked very different to those reflecting environmental costs.
The UK has also cottoned on to this larger scope of well-being, and will release its first official happiness index next year. Prime Minister David Cameron calls it “generalised well-being” probably because “gross happiness” sounds, well, gross.
The economic dimensions of sleep and happiness were on my mind yesterday after chatting to Professor Mark Swilling from the University of Stellenbosch’s Sustainability Institute. Swilling is a member of a UN panel on sustainable resource management which released a report last week warning that higher consumption of resources will become either prohibitively expensive or impossible due to depletion.
I heard Swilling express his ideas on decoupling GDP from rates of resource consumption last year for the first time, and it’s logical stuff.
Yesterday he told me that the UN report did not call for an absolute decline in resource use, but he concedes this will happen if the envelope is pushed far enough.
“We’re not going into that territory because when you start talking like that, economists start to shut down. And this report is talking to economists and business.” Swilling instead describes the UN report as “a soft landing into a more comprehensive indicator” than GDP.
So even though the GDP mentality prevails for now, discussions on more efficient resource use are breaking into the mainstream. It’s probably time for South Africa to put some ubuntu into its financial discourse too. - Ingi Salgado