Number 573 March 14, 2015

This Week: The Welfare of the People

"Quote" of the Week: "The Quality of Life We Create"
Always a Top Story: The Welfare of the People
The Index of Social Health
The Human Development Report
The Measure of America 2013–2014
The Genuine Progress Indicator
Other Attempts to Measure Social Health


There's a famous quotation, often attributed to Albert Einstein, although he probably wasn't the first to say it: "Not everything that counts can be counted, and not everything that can be counted counts." That spirit animates this issue of Nygaard Notes. Our public discussion—as seen in the patterns of media attention—tends to focus on the easily-measurable things. Like dollars. So we hear a lot about the stock market, and the growth of the economy, and other easily count-able news items. But the many harder-to-count things, like the value of clean air, the meaning of work, the degree of harmony in our social system, or how we distribute our wealth—those are not reported at the top of every hour, like the Dow Jones Index is.

When I talk about things like the "value" of clean air, I worry that people will think that I buy into the insane market-based idea that everything can be commodified, that everything has a dollar value. Not at all. That's insane. But the attempts illustrated in this issue are nonetheless important because they reflect various attempts to acknowledge that "economic growth" is not an unqualified positive, that there are negatives associated with a concept that has traditionally been synonymous with "development" and "progress." Capitalism tricks us into believing that having value and having a price are the same thing. They're not. This issue is about human potential, health, and quality of life. Clumsy as they may be, the indexes listed in this week's Notes are worth noticing because they represent attempts to get these things on the agenda, even as the market tries to keep them off.

It's kind of odd to quote myself, but back in 2008 when I was writing about some earlier reports on human welfare that received no media attention, I said: "The fact that such reports are available online for motivated people to go and read for themselves does not address the basic problem, which is the overall shape and range of the public discussion on the issue."

So here we are in 2015, and I could say the same thing. Fortunately, Nygaard Notes and other alternative media are here to call attention to these reports. That's how it starts, after all. We call out the bad, call attention to the good, and organize people to act on what we know. Nygaard Notes is a part of the movement toward a new society. You're a part of it, too. Thanks for doing your part.

Step by step we go,



"Quote" of the Week: "The Quality of Life We Create"

"What if we defined success not by the money we spent and the goods we consumed but by the quality of life we create not only for ourselves but for everyone with whom we share the planet? What if we added up the positives of economic growth and subtracted from them the clear negatives, so we had a better picture of whether we were headed in the right direction?"

Those are the opening words on the website of The Genuine Progress Indicator, which is one of the initiatives featured in this edition of Nygaard Notes.


Always a Top Story: The Welfare of the People

This is the final installment of my six-part series on The Top News Stories of 2014 that began 'way back on January 9th. It may seem odd to be talking about the Top News Stories of 2014 in March of 2015, but the series has evolved. The series began as a look back at what should have been covered last year, but now I'm thinking of it as a framework for how to decide what the Top Stories should be, not only in 2014, but in any year. You'll recall that I have suggested that we might determine the Top Stories by considering what a historian of the current period might find most useful in illuminating the development of the big themes of the day.

I've even gone so far as to suggest what those big themes might be. I've already discussed the first five: 1. Inequality and Resource Allocation; 2. The Decline of the U.S. Empire; 3. The State of U.S. Democracy; 4. Climate Change/Humans and the Environment, and; 5. The Evolving State of Capitalism. The sixth, and final "Chapter" in our book about the current period might be called "The Social Health of the Nation."

This entire issue is about various attempts to measure and monitor what is sometimes called Social Health. So, what is "Social Health?" Social Health, in simplest terms, is the answer to the question, "How are we doing?" While our news organizations obsessively cover economic performance, they typically fail to report on the many other things that we would need to know to tell someone how we truly are doing. While our economic situation is an important factor affecting quality of life, there are many, many other factors that must be considered when attempting our overall progress—or lack of it—as a society.

Let's have a look at some attempts to measure and report on the Social Health of the nation.


The Index of Social Health

The Institute for Innovation in Social Policy at Vassar College (formerly at Fordham University) has published its Index of Social Health every year since 1987, making it the first widely-accepted attempt to track human welfare in the U.S. that does not rely purely on economic indicators. The Index, says the Institute, "monitors the social well-being of American society." And, "Like the Index of Leading Economic Indicators or the Gross Domestic Product, it is a composite measure that combines multiple indicators to produce a single number for each year."

Let's cut to the chase: The headline here—from the most recent Index—is that the social health of the United States (as they measure it) declined by more than 20 percent between the year 1970 and 2011 (the last year for which complete data are available). During the same period, the U.S. economy grew by 322 percent. Which tells us that economic growth is not a good indicator of human welfare, which in turn tells us why we have things like the Index of Social Health.

The Index of Social Health is based on sixteen social indicators. These are: Infant Mortality, Child Abuse, Child Poverty, Teenage Suicide, Teenage Drug Abuse, High School Dropouts, Unemployment, Weekly Wages, Health Insurance Coverage, Poverty among the Elderly, Out-of-pocket Health-care Costs among the Elderly, Homicides, Alcohol-related Traffic Fatalities, Food Insecurity, Affordable Housing, and Income Inequality.

The premise of the Index is that American life is revealed not by any single social issue, but by the combined effect of many issues, acting on each other. In looking at social problems that affect Americans at each stage of life—childhood, youth, adulthood, and old age—as well as problems that affect all ages, the Index seeks to provide a comprehensive view of the social health of the nation.

In the most recent report, the Index of Social Health "stood at 50.2 out of a possible 100—up 1.7 points from the previous year, but still five points below the most recent peak in 2007. This score is the second lowest in the past fifteen years, the only lower score being last year's 48.5." And, as I've already mentioned, "between 1970 and 2011, the Index declined from 64.0 to 50.2, a drop of 21.6 percent."

Of the 16 indicators tracked by the Index, these seven have improved since 1970: Infant Mortality; High School Dropouts; Teenage Drug Abuse; Poverty, Ages 65 and Over; Homicides; Alcohol-related Traffic Fatalities, and Affordable Housing. And these nine indicators have worsened since 1970: Child Poverty; Child Abuse; Teenage Suicide; Unemployment; Weekly Wages; Health Insurance Coverage; Out-of-pocket Health-care Costs, Age 65+; Food Insecurity, and Income Inequality.

If we were to have a title for this chapter in our history of the era, it might read: Economy Growing, Human Welfare Shrinking.

Find the Index HERE.


The Human Development Report

The United Nations Development Programme put out the first Human Development Report (HDR) in 1990. Developed by Mahbub ul Haq, the goal was to produce an "annual report on the human dimension of development," as distinct from the purely economic dimension that had been traditional in development circles. And, for the past 25 years, the annual release of the UNHDR has been one important tool in re-training ourselves about how to think about "development" and "progress" in human society.

In addition to the widely-cited "Human Development Index," which scores and ranks each of the world's nations as to their level of development, each year's Report takes a theme and develops it. Previous HDRs have focused on themes such as Gender, Globalization, Human Rights, Cultural Liberty, Power and Poverty, Climate Change, and more.

The 2014 Human Development Report—Sustaining Progress: Reducing Vulnerabilities and Building Resilience—begins by saying, "While every society is vulnerable to risk, some suffer far less harm and recover more quickly than others when adversity strikes. This Report asks why that is and, for the first time in a global HDR, considers vulnerability and resilience through a human development lens."

The 2014 Report states that "overall global trends are positive and that progress is continuing. Yet, lives are being lost, and livelihoods and development undermined, by natural or human-induced disasters and crises. However, these setbacks are not inevitable." The Report "takes a different and more holistic approach" to issues of vulnerability and resilience, as "It considers the factors which contribute to risks to human development and then discusses the ways in which resilience to a broad group of evolving risks could be strengthened."

The Report is animated by a fundamentally sociological view of human development, which by its nature challenges the individualistic "bootstrap" understanding of human development that permeates mainstream U.S. culture. (Which, I suppose, makes them sound kind of crazy to many in this country, which could in part explain why these reports get so little notice in the U.S.)

From The Report

Here are a few excerpts from the 239-page Report that will illustrate the difference between USAmerican individualism and what the Report calls "universalism":

"This Report makes a number of important recommendations for achieving a world which addresses vulnerabilities and builds resilience to future shocks. It calls for universal access to basic social services, especially health and education; stronger social protection, including unemployment insurance and pensions; and a commitment to full employment, recognizing that the value of employment extends far beyond the income it generates."

"A common commitment—national and global—towards universal provision of social services, strengthening social protection and assuring full employment would constitute a profound societal and political decision that would lay the foundation for building longterm resilience, for countries and for their citizens as individuals. Such a commitment would boost the ability of individuals, societies and countries to resist and recover from setbacks, while recognizing that some are more exposed to risks and threats than others and need additional support."

"Everyone should have the right to education, health care and other basic services. Putting this principle of universalism into practice will require dedicated attention and resources, particularly for the poor and other vulnerable groups."

"Building human resilience requires responsive institutions. Adequate policies and resources are needed for providing adequate jobs, health care and education opportunities, especially for the poor and vulnerable. In particular, states that recognize and take actions to reduce inequality among groups (so called horizontal inequality) are better able to uphold the principle of universalism, build social cohesion and prevent and recover from crises."

"Universal provision of basic social services can promote opportunities across the board by delinking basic entitlements from the ability to pay for them."

"Universal provision of basic social services is better than targeting, which leads to social stigma for recipients and segmentation in the quality of services, as those who can afford to opt out of receiving public services do so."

"How can the global community ensure the provision of goods that enhance resilience? Many goods have social value and can reduce vulnerability—malaria research, pollution reduction or agricultural innovations to reach poor farmers—but are undervalued by markets. Managing and controlling food price volatility, global recessions and climate change are also essential public goods that markets are ill-equipped to provide. The recent trend has been to encourage markets to generate private goods that achieve desired global goals. But private goods cannot sufficiently provide key public goods to reduce vulnerability."

"Agendas and policies often underrepresent the interests and needs of less developed countries and the most vulnerable people—among them, unskilled workers, home-based workers, immigrants and the elderly. Those who have the least capacity to cope with shocks and to adjust to the speed of change are the least involved in creating the regulations, norms and goals of global governance. As a result, international rules and norms often reflect private interests rather than providing public goods and advancing social interests."

The Human Development Index

The Human Development Index, or HDI, that is a part of every Human Development Report, is a composite measure of the income, education and health of nations around the globe. Using this crude measure, the United States ranks fifth in the world in terms of Human Development, behind Norway, Australia, Switzerland, and the Netherlands. But this high ranking can be deceiving, as the Report tells us in a just-released supplement from the UNHDR office called "The Human Development Index – What it Is and What it Is Not." They remind us that "the HDI is an average measure and thus masks a series of disparities and inequalities within countries. Disaggregation of the HDI in terms of gender, regions, races and ethnic groups can unmask the HDI and can be and has been used widely for policy formulation."

Just such a disaggregation has been done for the United States by a group called Measure of America (MoA). We turn now to have a look at what they have to say.


The Measure of America 2013–2014

The Measure of America project was founded in 2006, and has put out three major national reports called "The Measure of America," one each for the years 2008-2009, 2010-2011, and 2013-2014. They also put out various other, more-specialized reports. I first wrote about the MoA in Nygaard Notes Number 414 (August 7, 2008). Back then I was talking about their first report. The two reports released since then somehow escaped my notice.

The MoA report, according to the Washington Post, "applies a Human Development Index, like the one used by the United Nations, to every state [in the U.S.] to measure access to knowledge, a long and healthy life and a decent standard of living."

The whole point of using a "human development" approach to assessing the state of the nation is to separate the idea of growth—typically reported as the size of our Gross Domestic Product, or GDP—from well-being. Kristen Lewis, co-director of the Measure of America report, says it well: "GDP is a useful economic indicator, but it can provide misleading signals when used as a measure of human progress; GDP has tripled over the last 35 years, but the earnings of the typical worker have barely budged."

The most recent MoA came out in June of 2013, and it began with these words: "In the era of 'big data,' it would seem that policymakers and regular people alike would have the information they need at their fingertips to understand their world and make it better. Unfortunately, that's far from the case. Though we know the country's gross domestic product quarterly, its retail sales monthly, and stock market numbers minute-by-minute, we rarely hear statistics on our country's people." Those statistics tell us a number of important stories, stories that would be more widely-known if reports such as this one were to receive the media attention they deserve.

The MoA reports on the well-being of people, first in the U.S. as a whole, then in each state separately, and finally on the well-being of people in the 25 largest metropolitan areas in the country.

For example, the Report tells us that the U.S. economy has grown by 362 percent since 1960, yet the U.S. Human Development Index score has only increased by 209 percent. There's a story there.

The MoA does a lot of "disaggregation," as well, by breaking down the overall data to show how different racial and ethnic groups within the various states and metro areas are doing. Some of you may be surprised at this fact from the Report: "The top-scoring racial/ethnic group on the American HD Index is Asian Americans (7.21), followed by whites (5.43), Latinos (4.05), African Americans (3.81), and Native Americans (3.55)."

"The American HD Index reveals extraordinarily uneven progress, and some setbacks, over the last decade. Progress in health was fastest among African Americans over the decade; they saw a life span increase of nearly three years. Remember, though, that African Americans started from the lowest rung on the life span ladder in 2000. Native Americans were the only racial or ethnic group whose life expectancy did not increase over the decade."

Looking at the state level, we learn that my own state of Minnesota has the 7th-highest HDI score in the U.S. overall, but we rank only 14th in African-American well-being, and 24th in Asian-American well-being. The HDI for Latinos in Minnesota, on the other hand, is higher than the population as a whole. There are only 11 states listed with HDI numbers for Native Americans (I think because the other states don't have large enough populations to analyze in a meaningful way), and of those eleven, Minnesota ranks 8th in terms of well-being of Native people.

"In no state do African Americans or Latinos have well-being levels above those of whites or Asian Americans."

Specialized Reports

In addition to the main reports, the MoA project has put out a number of specialized reports. One of these special reports, called "A Century Apart: New Measures of Well-being for U.S. Racial and Ethnic Groups," was released in 2010 and offers "Disaggregated data on life expectancy, educational enrollment, educational degree attainment, and median personal earnings, all from the latest official government releases." It also includes "American HD Index scores for racial and ethnic groups in each state" and "Rankings by state, for each major racial and ethnic group, on the American HD Index" and "Analysis of what's driving the differences in human development outcomes for different groups."

Another of their special reports, "29 Reasons for Optimism on Health Care Spending," tells us that "Residents of 29 countries live longer lives, on average, than Americans—while spending up to [eighty percent] less on their health." The Report's conclusion cannot be repeated often enough: "What at least twenty-nine of these flawed, imperfect systems have managed to do is to provide affordable, high-quality health care to most of the population at a fraction of the U.S. cost and with better results."

Their report "State of the Congress 2013" reports a few things worth knowing, such as "While 0.6 percent of the U.S. adult population are lawyers, 41 percent of the 113th Congress are." Also, "Median annual earnings, the typical wages and salaries of American workers ages 16 and older, are $29,000. Median earnings for members of Congress are $174,000." Those are another couple of stories worth telling that don't get told often enough.

All of these specialized reports draw on the research done in preparing the main report, The Measure of America. The main report is 60 pages long, but it's arranged in very easily-digested packages, with clear headings, lots of charts and tables, and good analysis. For example, there's a full page devoted to answering the question "Are Extractive Industries Good for Human Development?" that is well worth the read.

I'll end with the final two sentences from the Conclusion of The Measure of America 2013–2014: "If all we care about is a growing economy, than that's all we should pay attention to; GDP and other economic metrics suit that purpose well. But if we care about the ability of all Americans to live freely chosen lives of value, to realize their personal American Dreams, then shining a spotlight on the actual conditions of people's lives in communities around the country is critical."

I couldn't agree more. Find the full report online.


The Genuine Progress Indicator

The Genuine Progress Indicator, or GPI, is an economic index, like the Index of Sustainable Economic Welfare (ISEW) that preceded it. It was "conceived as a way to measure changes in national economic welfare with a single, aggregate index."

Quoting from the 2006 "Genuine Progress Indicator" report will give an idea of how it is set up:

"The GPI considers households as the basic building block of a nation's welfare, and thus begins its accounting exercise with personal consumption expenditures. To this the GPI adds benefits associated with welfare-enhancing activities such as parenting, housework, volunteering and higher education as well as the services which flow from household capital and public infrastructure. The GPI then deducts costs associated with pollution, loss of leisure time, auto accidents, destruction or degradation of natural capital, international debt and resource depletion. The end result is an index that attempts to measure our collective welfare in terms of principles of sustainable development drawn from the economic, social, and environmental domains."

There are 26 separate indicators that comprise the Genuine Progress Indicator. I think it's a really interesting list, so I'll reproduce it here:

"Economic Indicators" include:
• Personal Consumption Expenditures
• Income Inequality
• Adjusted Personal Consumption
• Cost of Consumer Durables
• Value of Consumer Durables
• Cost of Underemployment
• Net Capital Investment

"Environmental Indicators" include:
• Cost of Water Pollution
• Cost of Air Pollution
• Cost of Noise Pollution
• Loss of Wetlands
• Loss of Farmland
• Loss of Primary Forests and Damage from Logging Roads
• Carbon Dioxide Emissions Damage
• Cost of Ozone Depletion
• Depletion of Non-Renewable Resources

"Social Indicators" include:
• Value of Housework Work and Parenting
• Cost of Family Changes
• Cost of Crime
• Cost of Household Pollution Abatement
• Value of Volunteer Work
• Loss of Leisure Time
• Value of a Higher Education
• Value of Highways & Streets
• Cost of Commuting
• Cost of Automobile Accidents

If you go to their (somewhat confusing) website you'll see all 26 indicators listed, and you can read about how and why each indicator came to be on the list. This is where you could learn, for example, why there are separate categories for "Cost of Consumer Durables" and "Value of Consumer Durables."

We can get a taste of the approach taken by this group if we consider their comment on the indicator "Loss of Wetlands":

"Wetlands contain some of the most productive habitat in the world. Yet their value is not represented in economic accounts because the benefits—such as regulating and purifying water and providing habitat for fish and waterfowl—are generally 'public goods,' for which there is no overt price. When a farmer drains and fills a marsh, the GDP rises by the increased output of the farm. However, the loss of services from the wetland goes uncounted. The GPI rectifies this by estimating the value of the services that are given up when wetlands acreage is converted to other purposes."

When they refer to "services" from a wetland, they expose the limited thinking that seems to go along with such an economic approach to assessing value. Language like this obscures the fact that the environment does not support life because the different parts of the environment provide "services." The environment is a fantastically complex weaving of uncountable numbers of systems, each of which has an inherent value that the concept of "services" fails to capture. Nonetheless, given that the standard measure (GDP) consider wetlands completely "unproductive," it's a sign of progress on the part of the GPI and related indexes to at least attempt to acknowledge that there is some value there, despite the apparent failure of non-farmed wetlands to contribute to economic growth.

In that regard, it's a tremendously positive sign that states (and municipalities, too) are beginning to consider, and count, some of the things that the market fails to count. The State of Vermont passed GPI legislation in 2012. Maryland has adopted the GPI to guide their state policy. Other states are in some stage of engagement with the GPI, as well, including Ohio, Utah, Minnesota, Hawaii, and Washington. Cities like Akron, Cleveland, Baltimore, and Edmonton Alberta also make use of the GPI in their attempts to assess quality of life.


Other Attempts to Measure Social Health

This issue of the Notes features what I consider to be four of the more interesting and useful attempts to begin to measure and count the various factors that contribute to human welfare but are not measured in dollars. But those four—the Index of Social Health, the UNHDR, the Measure of America, and the Genuine Progress Indicator—are certainly not the only attempts to break out of a purely market-driven assessment of the progress of the world's people. Here are nutshell descriptions of five other projects that are working in the same general area. I include them because I think they're interesting, but also because I hope that a look at such a wide variety of approaches will help us to reflect on our own ideas of what it means to be human in the modern world.

THE MILLENNIUM DEVELOPMENT INDICATORS is a UN project that measures progress towards the Millennium Development Goals. "And what," you may ask, "are the Millennium Development Goals?" They are a set of eight goals for human societies on the planet, agreed to at a global summit at the United Nations in the year 2000, which were to be met by the year 2015. For more, go back and read NN #320 "Global Human Welfare: Not Worth Reporting?.")

The Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford in the United Kingdom publishes a MULTIDIMENSIONAL POVERTY INDEX for more than 100 of the world's poorest countries. The interesting thing about this project is that they talk about what they call "multidimensional poverty," which they explain like this: "Poverty is often defined by one-dimensional measures, such as income. But no one indicator alone can capture the multiple aspects that constitute poverty. Multidimensional poverty is made up of several factors that constitute poor people's experience of deprivation—such as poor health, lack of education, inadequate living standard, lack of income (as one of several factors considered), disempowerment, poor quality of work and threat from violence."

My biggest criticism of this index is that it seems quite complicated. But, of course, that is the point they are trying to make: That poverty is complicated, and attempts to address it had better take that complexity into account. So maybe I'm not so critical, after all.

The Organization for Economic Cooperation and Development (OECD) publishes something called the BETTER LIFE INDEX, which focuses on measurements of the quality of life in some of the world's richer countries, 34 of them in fact. It's an interactive tool, and it's aimed at helping involve people to engage with the question, "Is wealth all that matters, or should we be looking at other things, like the balance between work and the rest of our lives?" You can sort-of set your own criteria for comparing well-being in France vs Estonia, for instance.

GROSS NATIONAL HAPPINESS is a concept that originated in the nation of Bhutan. It's not easy to measure "happiness," as we see when we look at a document called "A Short Guide to Gross National Happiness Index," published by the Center for Bhutan Studies, which runs to 104 pages. That document points out that "it is vital to clarify that GNH in Bhutan is distinct from the western literature on 'happiness..." The Center explains by quoting the Prime Minister of Bhutan, who tells us:

"We have now clearly distinguished the 'happiness' ... in GNH from the fleeting, pleasurable 'feel good' moods so often associated with that term. We know that true abiding happiness cannot exist while others suffer, and comes only from serving others, living in harmony with nature, and realizing our innate wisdom and the true and brilliant nature of our own minds."

Without going into great detail, the GNH concept looks at happiness in nine "domains" which are: Psychological Wellbeing; Health; Time Use; Education; Cultural diversity and Resilience; Good Governance; Community Vitality; Ecological Diversity and Resilience, and; Living Standards. Associated with those domains are 33 indicators, some of which are basically untranslatable into English, like "DriglamNamzha," which translates as The Way of Harmony.

Learn more about this idea by visiting either the website of the Gross National Happiness Commission or the more-accessible website of the Center for Bhutan Studies and GNH Research.

The Social Progress Imperative produces THE SOCIAL PROGRESS INDEX which, like the other measurement tools listed here, believes that "Economic development alone is not sufficient to explain social progress outcomes. GDP per capita is an incomplete measure of a country's overall performance."

The Index ranks countries on a variety of criteria such as "Nutrition and Basic Medical Care," "Access to Basic Knowledge," "Personal Rights," and so forth. New Zealand tops their list, Chad comes in last, and Afghanistan isn't ranked, for some reason.

They're also working on something called a "Social Progress Network" which they say consists of "partners in government, business and civil society who want to use the Social Progress Index tool as a starting point for action in their countries." The goals of the project—from reading their website—appear to be a sort of "capitalism with a heart." For example, when discussing their hopes for the Index and what they call the "Social Progress Framework," they say that "Ultimately, the result will be more effective social entrepreneurship, philanthropy, and development programs; and more responsible business strategies."

These five Initiatives—the Millennium Development Indicators, the Multidimensional Poverty Index, the Better Life Index, the Gross National Happiness Index, and the Social Progress Index—are all variations on the same theme: We need to start measuring quality of life in more sophisticated and helpful ways than the traditional economic measures do.

Readers of Nygaard Notes will know that the perspective here is that the change we need is going to involve a lot more than philanthropy and more responsible business strategies. Still, the effort illustrated by all of the efforts listed here adds to the movement to go beyond the one-dimensional economic lens that for so long has defined "progress" and "development."

The daily news cycle does little to illuminate the simple question "How are we doing?" My point in this issue of the Notes has been to show that many, many people are offering methods to answer that vitally-important question. Until the time that we have a media that consistently tracks social health, perhaps we can use some of the resources offered here to keep ourselves informed about the social health of our communities, our nations, and our world.