Transcript Happy

Group G
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Mark Anielski has served as an economic
policy advisor to the Alberta Government and
is recognized as a “rising star” amongst
international progressive economists.
Much of his work revolves around developing
alternative measures of economic progress.
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Anielski describes The Economics of Happiness as
having 4 main goals:
1.
2.
3.
4.
• Explore the nature & spirit of the current economic system.
• Introduce the concept of Genuine Wealth.
• Illustrate examples of the Genuine Wealth model.
• Examine the nature of money and our current debt based banking
system.
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Anielski questions conventional definitions of
“wealth” and “value”, and looks into
developing a better system of measuring
human progress.
“While the GNP might be great at adding up
all the money we spend on goods and
services in an economy, it was a lousy
measure of what mattered most to
Americans: their quality of life.”
– Robert Kennedy
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Anielski looks into creating a system of “wellbeing accounting” that would measure the actual
physical and qualitative conditions of well-being.
This involves new forms of capital accounting:
Human capital (time, knowledge, and
health).
Social capital (trust and strength of
relationships).
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The book describes Genuine Wealth as “the
conditions of well-being that are true to the
core values of our life.”
Genuine Wealth creates a more complete
method of measurement where the effects of
human, social, natural, built and financial
capital are all taken into account.
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Anielski constructed a large database based
on to determine whether the US as a whole is
better off in 2001 than it was in 1950 based
on Genuine Progress Indicators. He looked at
typical indicators such as life expectancy and
personal income, as well as Genuine Wealth
indicators such as self-rated happiness and
youth suicide rates.
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He found that many of the Genuine Wealth
areas have substantially worsened despite the
fact that the US GDP and financial markets
have boomed.
The number of Americans who say they are
“very happy” has declined from 35% in 1957
to 30% in 2002, and the youth suicide rate
has almost tripled.
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The Genuine Wealth model is based on what
we value in life the most:
Love
Meaningful
Relationships
Happiness
Joy
Freedom
Sufficiency
Justice &
Peace
It has five fundamental principles:
1. True wealth represents all things that make life
worthwhile, not simply monetary or material
possessions.
2. True wealth is abundant, not scarce.
3. True wealth is more abundant when freely given and
freely received through the spirit of reciprocity.
4. True wealth ultimately comes as a gift from God; each
one of us has a responsibility to be co-stewards with
God for this wealth.
5. The management of our genuine wealth is grounded in
sustaining the integrity and vitality of the assets which
contribute most to our pursuit of love and happiness.
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The process of Genuine Wealth Assessment
(GWA) begins by us asking ourselves the
questions:
How’s life?
What’s going well in life?
What areas would we like improved?
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At the same time, we take into account the
principles that guide our lives, such as laws.
It is essentially a measure of our selfsatisfaction.
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A Personal Genuine Wealth Assessment
involves examining ourselves in a light mirror
and a dark mirror.
◦ In the light mirror, we examine what we love about
ourselves ad what others love about us.
◦ In the dark mirror, we look at the things we don’t
like about ourselves or what others dislike about
us.
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Ultimately, these mirror images help to create
a complete and honest profile of our physical,
mental, emotion, and spiritual well-being.
In conducting a personal
Genuine Wealth
Assessment, we identify
strengths and areas
needing improvement in
our personal lives as well
as the strengths and
weaknesses of our
professional and work
life. Each of us will define
“the good life” from our
own unique perspective
and experience.
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The power to create money no longer resides
with us but rather is increasingly
concentrated in the hands of a few private
banks.
Money is no longer backed by
anything real.
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This leads Anielski to the belief that money
should be created to support the conditions
of the 5 capitals in the Genuine Wealth
Accounting System:
1. Human
2. Social
4. Built
3. Natural
5.Financial
What is Money?
 Money is a medium of exchange, store of
value and unit of account.
In Reality...
 Money is not a thing and has no inherent
value.
 It is not real or tied to anything of real
substance or genuine wealth.
How is Money Created?
 Money is literally created out of nothing when
the private bank issues a mortgage, a student
loan, or a business loan or the government
prints money and issues a government debt
bond.
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This debt based system of money is only a
recent phenomenon.
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Charging of interest, or usury, on a loan
refers to the transfer of real wealth from the
debtor to the lender.
Until recent times, Christianity outlawed
usury, as it was a sin.
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On average we pay 50% interest on all prices
of goods and services
If interest charges on all debts were
eliminated, we would likely have to work at
least 50% less
Interest Charges
Usury
Vision for Genuine Wealth Economy:
1.
2.
3.
• Future without usury – banking without
interest.
• Banks no longer charge interest on loans.
• Banks provide financial management advice
to clients for a legitimate service fee.
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Real life example: the JAK Members Bank
of Sweden provides members with
interest free loans.
◦ Members share their savings.
◦ Ultimate goal is to abolish interest as an
economic instrument and to replace it with
means which help its members build healthy
and sustainable communities.
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GDP does not measure the ends of happiness,
love, or spiritual engagement.
Having healthy relationships, good and
hopefully meaningful jobs, and trusting
work places makes people happier.
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Does money buy happiness?
◦ Once people have met most of their basic material
needs for life, money doesn’t translate into either
more objective or subjective well-being or
happiness.
From Andrew Oswald’s research:
An employee earning $10,000 becomes happier
when offered another $10,000
BUT a person earning $100,000 doesn’t have
the same rise in happiness with another
$100,000
According to Yale University professor, Robert Lane:
In affluent countries, the correlation between income
and happiness is close to zero.
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Anielski’s book addresses the issue that
economics is studied as if it has nothing to
do with people, when economic systems are
ultimately the ways in which people are
related.
Takes a moral point of view to factor people
into the study of economics
human wealth
social wealth
environmental wealth
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Genuine Wealth Model makes it harder for
corporations to act immorally by integrating
all accounting, HR, environmental
performance and corporate information:
Integrated 5 capitals balance sheet
Full cost-benefit sustainable income
statement
Sustainable progress indicators
Genuine progress or sustainability report
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It will be easier for companies to exercise
corporate social responsibility because the
moral obligations will be demanded by
society.
If a company wants to improve the welfare
of its employees it will have a more
effective way to measure it, without just
seeing the loss in profits.
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Overall, the book is well written and makes a
good case for the switch to wealth accounting
standards.
◦ Good examples were presented, in particular the
JAK Members Bank of Sweden example.
◦ Evidence such as the GPI database is also effective
in illustrating Anielski’s points.
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The Economics of Happiness is definitely a
major contribution to the field of “happiness
economics”, as this is a relatively new and
untouched field.
Much of Anielski’s evidence comes from
research that he did himself and had never
been done before.
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This book raises many questions regarding
the future of business, government, money
and wealth.
◦ What is the future of accounting? How will
standards change in the future?
◦ How will governments create and maintain wealth?
Will the economy still be debt-driven in the future?
◦ What role will money play in the future? Will it still
be the main indicator of wealth as it is today?
◦ How will wealth be defined in the future?
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Anielski makes many interesting comments
about wealth and money, and in particular,
his concept of Genuine Wealth could help
governments, corporations and individuals
better account for their true wealth in the
future.
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His insights into whether or not money can
buy happiness are also particularly
interesting, as money is often the motivator
for ethically questionable actions. As we have
seen, people often sacrifice their well-being
or the well-being of others for more money.
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Ultimately, Anielski’s concept of Genuine
Wealth is an interesting idea, but
implementing it would be unrealistic.
◦ Human and social capital is difficult to measure,
and it would be even more difficult to ensure that
they are measured consistently by different people.
◦ It would be difficult to convince banks to stop
charging interest.
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Although Anielski has plenty of interesting
ideas, he does not fully explain how these
ideas could be implemented.
◦ For example, well-being accounting could be a very
good idea, but how can businesses seamlessly
switch from traditional accounting to this new way?
◦ JAK Members Bank of Sweden is an interesting case,
but how could a regular bank switch to this sort of
lending format without any negative consequences?
Current
Accounting
??????
Well-being
Accounting
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Anielski describes how Genuine Wealth gives
a better overall picture of wealth, but fails to
illustrate a clear and consistent way of
measuring intangibles such as “happiness”
besides surveying self-satisfaction.
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Anielski goes into great detail about how our
“picture of progress” is flawed. However, he
does not clearly indicate ways in which wellbeing accounting or Genuine Wealth would
improve the situation.
◦ He does a good job describing the benefits of these
things, but doesn’t leave the reader wanting to
switch away from the current system.
Thank you!
Questions?