Calls for an alternative measurement for the economy – a happiness index – to replace GDP shows the financial crisis is not only bringing major economies to their knees it also is shaking the very foundations of capitalist economic thought.
Gross Domestic Product is the most widely recognised measure of the economic health of a nation. Two consecutive quarterly falls in GDP are defined by many as a recession while an increase in GDP is ‘undoubtedly’ seen as good.
GDP is the total value of goods and services produced in an economy. For the capitalist economist because human wants or desires are unlimited or never-ending while goods and services are scarce, ever-higher production of goods and services means ever-higher satisfaction of wants. As more and more wants or desires are satisfied people by definition are said to be better off and therefore happier.
However, in spite rampant western consumerism and choice ever increasing numbers of surveys show people in the west are no-more happier. An ever greater satisfaction of materialistic desires through the consumption of goods and services has in fact not made people happier.
Inherent flaws in using GDP to gauge the health of a country are not new however as is vividly expressed in the following quote:
‘The gross national product includes air pollution and advertising for cigarettes and ambulances to clear our highways of carnage. It counts special locks for our doors and jails for the people who break them. GDP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm, and missiles and nuclear warheads… it does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, or the intelligence of our public debate or the integrity of our public officials. It measures everything, in short, except that which makes life worthwhile.’
Robert Kennedy, attorney general, in a speech in 1969
Despite these longstanding political objections to the use of GDP capitalist economists recognise only materialist needs and neglect spiritual and moral values. Indeed, spiritual and moral activities that do not contribute to the economy are considered useless at best and at worst counterproductive because they are seen to stifle the materialist motivation.
To quote the father of capitalist economics, Adam Smith:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.Adamsmilth.org.
Fundamentally it’s the ideology of Adam Smith that drives western economies and with it failing western societies. It’s the ideology of pursuing self-interest alone that leaves individuals materially satisfied, to a point, but morally and spiritually near empty.
It is too early to know how GDP will be replaced by a new happiness index. However, since political protestations against the use of GDP are not new prospects for a radical change look illusive. In any case it is highly questionable whether a mere economic index, even one that includes a gauge for happiness, will be able to change the fundamental fabric of western society.
In contrast to capitalism, Islam looks at the individual holistically. Material, social and economic interests are satisfied under the umbrella of seeking the pleasure of Allah (swt), the Creator of the Universe. Thereby none of the innate features of the human are neglected while at the same time all are uniquely aligned and in harmony to the ultimate goal of worshiping Allah (swt).
قُلۡ إِنَّ رَبِّى يَبۡسُطُ ٱلرِّزۡقَ لِمَن يَشَآءُ مِنۡ عِبَادِهِۦ وَيَقۡدِرُ لَهُ ۥۚ وَمَآ أَنفَقۡتُم مِّن شَىۡءٍ۬ فَهُوَ يُخۡلِفُهُۖ ۥ وَهُوَ خَيۡرُ ٱلرَّٲزِقِينَ
Say: Lo! my Lord enlargeth the provision for whom He will of His bondmen, and narroweth (it) for him. And whatsoever ye spend (for good) He replaceth it. And He is the Best of Providers.(34:39)