August 2020, ScientificAmerican.com 31research agenda for exploring links between the differ-
ent components of well-being and sustainability and
developing good ways to measure them.
Concern about climate change and rising inequality
had already been fueling a global demand for better
measures, and our report crystallized that trend. In 2015
a contentious political process culminated in the United
Nations establishing a set of 17 Sustainable Develop-
ment Goals. Progress toward them is to be measured by
232 indicators, reflecting the manifold concerns of gov-
ernments and civil societies from around the world. So
many numbers are unhelpful, in our view: one can lose
sight of the forest for the trees. Instead another group
of experts, chaired by Fitoussi, Martine Durand (chief
statistician of the OECD) and me, recommended that
each country institute a robust democratic dialogue to
discover what issues its citizens most care about.
Such a conversation would almost certainly show
that most of us who live in highly developed economies
care about our material well-being, our health, the envi-
ronment around us and our relations with others. We
want to do well today but also in the future. We care
about how the fruits of our economy are shared: we do
not want a society in which a few at the top grab every-
thing for themselves and the rest live in poverty.
A good indicator of the true health of an economy is
the health of its citizens. A decline in life expectancy,
even for a part of the population, should be worrying,
whatever is happening to GDP. And it is important to
know if, even as GDP is going up, so, too, is pollution—
whether it is emissions of greenhouse gases or particu-
lates in the air. That means growth is not environmen-
tally sustainable.
The choice of indicators may vary across time and
among countries. Countries with high unemployment
will want to track what is happening to that variable;
those with high inequality will want to monitor that.
Still, because people generally want to know how they
are doing in comparison with others, we recommended
that the advanced countries, at least, share some five to
10 common indicators.
GDP would be among them. So would a measure of
inequality or some pointer toward how the typical indi-
vidual or household is doing. Over the years economists
have formulated a rash of indicators of inequality, each
reflecting a different dimension of the phenomenon. It
may well be that societies where inequality has become
particularly problematic may need to have metrics
reflecting the depth of the poverty at the bottom and
the excesses of riches at the top. To me, knowing what
is happening to median income is of particular impor-
tance; in the U.S., median income has barely changed
for decades, even as GDP has grown.
Employment is often used as an indicator of macro-
economic performance—an economy with a high unem-
ployment rate clearly is not using all of its resources
well. But in societies where paid work is associated with
dignity, employment is a value in its own right. Other
elements of the dashboard would include indicators forenvironmental degradation (say, air or water quality),
economic sustainability (indebtedness), health (life
expectancy) and insecurity.
Insecurity has both subjective and objective dimen-
sions. We can survey how insecure people feel: how
worried they are about adverse effects or how prepared
they feel to cope with a shock. But we can also predict
the likelihood that someone falls below the poverty line
in any given year. And some elements of the dashboard
are “intermediate” variables—things that we may (or
may not) value in themselves but that provide an
inkling of how a society will function in the future. One
of these is trust. Societies in which citizens trust their
governments and one another to “do the right thing”
tend to perform better. In fact, societies in which peo-
ple have higher levels of trust, such as Vietnam and New
Zealand, have dealt far more effectively with the pan-
demic than the U.S., for instance, where trust levels
have declined since the Reagan era.
Policy makers need to use such indicators much as
physicians use their diagnostic tools. When some indi-
cator is flashing yellow or red, it is time to look deeper. If
inequality is high or increasing, it is important to know
more: What aspects of inequality are getting worse?STEERING THROUGH STORMS
since We began our work on well-being indicators some
dozen years ago, I have been amazed at the resonance
that it has achieved. A focus on many of the elements
of the dashboard has permeated policy making every-
where. Every three years the OECD hosts an interna-
tional conference of nongovernmental organizations,
national statisticians, government officials and aca-
demics furthering the “well-being” agenda, the most
recent being in Korea in November 2018, with thou-
sands of participants.
Whenever the conference next convenes, the global
crisis in human societies that a microscopic virus has
precipitated will surely be on the agenda. The full
dimensions of it could take years or decades to become
clear. Recovering from this calamity and steering com-
plex societies through the even more devastating crises
that loom—catastrophic climate change and biodiver-
sity collapse—will require, at the very least, an excel-
lent navigational system. To paraphrase the OECD: We
have been developing the tools to help us drive better.
It is time to use them.MORE TO EXPLORE
Mismeasuring Our Lives: Why GDP Doesn’t Add Up. Joseph E. Stiglitz, Amartya Sen and Jean-Paul
Fitoussi. New Press, 2010.
Measuring What Counts: The Global Movement for Well-Being. Joseph E. Stiglitz, Jean-Paul
Fitoussi and Martine Durand. New Press, 2019.
People, Power, and Profits: Progressive Capitalism for an Age of Discontent. Joseph E. Stiglitz.
W. W. Norton, 2019.
FROM OUR ARCHIVES
A Rigged Economy. Joseph E. Stiglitz; November 2018.
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