Growth and Happiness

Growth does not always lead to happiness, at least according to these Ethical Investment Managers:

Is there such a thing as bad growth?
I think that there is. And the classic example is where the buyer and seller are not the only parties to a transaction, so the price doesn't capture all of the implications of the transaction. It might be something like buying a big SUV. The problem is that the buyer goes and says: "I do care about the environment, but I'm one of 300 million people in this country. And whether I buy this SUV or not is really not going to have an impact on the environment at all." But when everybody does that, all of a sudden we have an environmental problem.
...One area that investors are getting very focused on right now is the area of global warming and the risks that are associated with the potential regulation of global warming. The CEO of Cinergy [a leading electric utility] has come out and said: "We know that greenhouse gases are a problem. We know they're going to be regulated in the future. And when we go to invest in a plant, it has a 30-year investment horizon. So there's a real risk to us - not only as managers of a company but also as investors -- if we don't take into account the potential regulatory and litigation risks that come with that." So we're starting to see a lot more research in the area of risk-management around environmental issues.

Conventional growth measures don't work?
We certainly know that GDP [gross domestic product] isn't the end-all, be-all for measuring. There are the intangibles that are important and don't get considered.
The things that we don't measure, we really don't value: time with friends and family, time with your children, volunteer time. These are things don't get counted, and therefore don't get valued in the same way as some other things. [For example:] Buying a home-security system, which does get counted in GDP, because the crime rate has gone up. It's better to have lower crime and fewer security systems.

Do we need a gross happiness product?
I think we do need new measures. The problem is it's very controversial and it gets into the political sphere.... There's a group that [has] the Genuine Progress Indicator or GPI. They actually have statistics where they take GDP and add things and subtract things. Since 1950, on a per person basis, they see on their measure an increase of about 60 percent. So they would say that people are better off now than in 1950 on a per person basis. [But] on a GDP basis, it's 300 percent. So it's not like they're saying there's no progress. But the way they measure things, there's been a lot less [than economists' traditional measure].