Why governments should prioritize wellbeing Nicola Sturgeon
Just over a mile away from here,
in Edinburgh’s Old Town,
is Panmure House.
Panmure House
was the home of the world-renowned
Scottish economist
Adam Smith.
In his important work
“The Wealth of Nations,”
Adam Smith argued,
amongst many other things,
that the measurement of a country’s wealth
was not just its gold and silver reserves.
It was the totality of the country’s
production and commerce.
I guess it was one of the earliest
descriptions of what we now know today
as gross domestic product, GDP.
Now, in the years since, of course,
that measurement
of production and commerce, GDP,
has become ever more important,
to the point that today –
and I don’t believe this
is what Adam Smith would have intended –
that it is often seen as
the most important measurement
of a country’s overall success.
And my argument today
is that it is time for that to change.
You know, what we choose to measure
as a country matters.
It really matters,
because it drives political focus,
it drives public activity.
And against that context,
I think the limitations of GDP
as a measurement of a country’s success
are all too obvious.
You know, GDP measures
the output of all of our work,
but it says nothing
about the nature of that work,
about whether that work
is worthwhile or fulfilling.
It puts a value, for example,
on illegal drug consumption,
but not on unpaid care.
It values activity in the short term
that boosts the economy,
even if that activity is hugely damaging
to the sustainability of our planet
in the longer term.
And we reflect on the past decade
of political and economic upheaval,
of growing inequalities,
and when we look ahead to the challenges
of the climate emergency,
increasing automation,
an aging population,
then I think the argument for the case
for a much broader definition
of what it means to be successful
as a country, as a society,
is compelling, and increasingly so.
And that is why Scotland, in 2018,
took the lead, took the initiative
in establishing a new network
called the Wellbeing Economy
Governments group,
bringing together as founding members
the countries of Scotland, Iceland
and New Zealand, for obvious reasons.
We’re sometimes called the SIN countries,
although our focus is very much
on the common good.
And the purpose of this group
is to challenge that focus
on the narrow measurement of GDP.
To say that, yes,
economic growth matters –
it is important –
but it is not all that is important.
And growth in GDP should not be pursued
at any or all cost.
In fact, the argument of that group
is that the goal, the objective
of economic policy
should be collective well-being:
how happy and healthy a population is,
not just how wealthy a population is.
And I’ll touch on the policy
implications of that in a moment.
But I think, particularly
in the world we live in today,
it has a deeper resonance.
You know, when we focus on well-being,
we start a conversation
that provokes profound
and fundamental questions.
What really matters to us in our lives?
What do we value
in the communities we live in?
What kind of country,
what kind of society,
do we really want to be?
And when we engage people
in those questions,
in finding the answers to those questions,
then I believe that we have
a much better chance
of addressing the alienation
and disaffection from politics
that is so prevalent in so many countries
across the developed world today.
In policy terms, this journey
for Scotland started back in 2007,
when we published what we call
our National Performance Framework,
looking at the range of indicators
that we measure ourselves against.
And those indicators
are as varied as income inequality,
the happiness of children,
access to green spaces, access to housing.
None of these are captured
in GDP statistics,
but they are all fundamental
to a healthy and a happy society.
(Applause)
And that broader approach is at the heart
of our economic strategy,
where we give equal importance
to tackling inequality
as we do to economic competitiveness.
It drives our commitment to fair work,
making sure that work
is fulfilling and well-paid.
It’s behind our decision to establish
a Just Transition Commission
to guide our path
to a carbon zero economy.
We know from economic
transformations of the past
that if we’re not careful,
there are more losers than winners.
And as we face up to the challenges
of climate change and automation,
we must not make those mistakes again.
The work we’re doing here in Scotland
is, I think, significant,
but we have much, much to learn
from other countries.
I mentioned, a moment ago,
our partner nations
in the Wellbeing network:
Iceland and New Zealand.
It’s worth noting, and I’ll leave it to you
to decide whether this is relevant or not,
that all three of these countries
are currently led by women.
(Applause)
They, too, are doing great work.
New Zealand, in 2019,
publishing its first Wellbeing Budget,
with mental health at its heart;
Iceland leading the way on equal pay,
childcare and paternity rights –
not policies that we immediately think of
when we talk about
creating a wealthy economy,
but policies that are fundamental
to a healthy economy
and a happy society.
I started with Adam Smith
and “The Wealth of Nations.”
In Adam Smith’s earlier work,
“The Theory of Moral Sentiments,”
which I think is just as important,
he made the observation
that the value of any government
is judged in proportion
to the extent that it makes
its people happy.
I think that is a good founding principle
for any group of countries
focused on promoting well-being.
None of us have all of the answers,
not even Scotland,
the birthplace of Adam Smith.
But in the world we live in today,
with growing divides and inequalities,
with disaffection and alienation,
it is more important than ever
that we ask and find the answers
to those questions
and promote a vision of society
that has well-being,
not just wealth, at its very heart.
(Applause)
You are right now in the beautiful,
sunny capital city …
(Laughter)
of the country that led the world
in the Enlightenment,
the country that helped lead the world
into the industrial age,
the country that right now
is helping to lead the world
into the low carbon age.
I want, and I’m determined,
that Scotland will also be the country
that helps change the focus of countries
and governments across the world
to put well-being at the heart
of everything that we do.
I think we owe that to this generation.
I certainly believe we owe that
to the next generation
and all those that come after us.
And if we do that, led here
from the country of the Enlightenment,
then I think we create
a better, healthier, fairer
and happier society here at home.
And we play our part in Scotland
in building a fairer,
happier world as well.
Thank you very much.
(Applause)