Rennes Conference, Day One: Part Two

See part one here. The second session of the day was titled "Reconsidering Societal Progress."

Update: All the notes added!

This session was moderated by Enrico Giovannini of the OECD, who began with three quotations for the group to identify the speakers.

“We have used the GDP to determine wrongfully the state of a society. We have not been measuring its vitality. There are two needs: the needs of the body and the needs of the mind. We have been focused, perhaps exclusively so, on the needs of the body.” (I didn't get the full quote)
current Prime Minister of Bhutan

Happiness lies not in the possession of money; it lies in the joy of achievement; in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. There must be an end to the conduct in banking and business that too often condones callous and selfish wrongdoing. The people of this country have been erroneously encouraged to increase output of farm and factory without regard to what that means. Without regard to party the great majority achieve well-being through happiness. (Again, that's not the full quote) Franklin Delano Roosevelt

“How do we measure the progress of society? By how many find a job that pays the mortgage. (More inspirational stuff follows -- anyone have this quote?) Barack Obama

There is a world movement. This is not a new story. We need to learn from the mistakes of the past. What's different from the last time we had a movement around social indicators? What's different from the work that's we've been doing on sustainable development?

Dominique Meda, Center for the Study of Employment, spoke of “What kind of progress should we measure?” My fear is that when the stock indicators go back up, we will go back to the good old days; that this crisis will be seen as a temporary fluctuation rather than as an opportunity to rethink where we are going as society. My presentation will be in two parts: first, the explanation of how we have assimilated/brought together the concepts of progress and economic growth, and second, what kind of progress should we measure?

We have linked progress and economic growth together for several reasons. If we want to change how we measure progress, we need to understand why we are measuring what we are measuring now.

First, we have a historical and philosophical understanding of progress that is tied to economic prosperity. Adam Smith wrote that producing a lot creates an overabundance, that overabundance creates wealth, increased wealth improves society, and that democracy and free markets are interchangeable terms. Vilany Forque (sp?) says that if we want to show our power, we show our wealth – that wealth is power. He gives a scientific basis for the economy in “What's Wealth.” Thomas Malthus gave us a very restrictive definition of wealth in order to give legitimacy to the science of economics – it is a science because it deals with the tangible and measurable, therefore wealth is that which is tangible and measurable. Hegel and others discuss wealth as a spiritual approach – wealth helps us deny nature, and each step forward is a spiritual step. Production shapes nature, and that is a good thing. Man, in transforming nature, transforms himself. Jean-Baptiste Sartre (?) says that we develop our faculties more when we are at work, and when we consume more. The production-consumption pair are an illustration of civilization.

The second reason is that we have tied measures of economic growth to the notion of progress has been the lack of alternative measures. It is difficult to understand the other aspects of progress, and more difficult to measure them. How do we approach understanding the quality, the intensity of life? Malthus divided the concept of progress into the vulgar things, on one hand, and the more important things, on the other. The works of Shakespeare, Newton, and others are priceless – and being priceless, they cannot be included in the calculations. But if they are not in the calculations, then they are forgotten. We end up concentrating on only the “vulgar” things. The same dichotomy is found in The City of God, by St. Augustine. How do you define that which is above the vulgar? How do you build a standardized model that measures and tracks your progress?

The third problem is that we consider progress as something collective, and so we need a collective definition of progress. But how do we agree on that definition? Without consensus, we end up eliminating the voices and thoughts of people who don't agree with the majority. Benjamin Constant spoke of the ancients, who had a “common good”, and the moderns, who cannot agree on a common good because of the notions of privacy. There can be no common good with sacrificing the individual. That which is valued defines the utility of the individual. Utility – usefulness – is a difficult standard to base progress on. If the object of production is useful as a remedy or as a poison, the economy doesn't care. Utility is totally devoid from morality.

GDP measures the number of exchanges, and the usefulness of those exchanges is defined by the individual. This makes a measure of national well-being unthinkable – without unanimity we cannot reach the notion of a common good, we cannot reach a collective understanding of what progress might mean. It is nearly impossible to get to that collective understanding because it all depends on definign this common good. We are reassured because there appears to be a correlation between social indicators and GDP, between increased income and increased happiness. That allows us to say, let's keep the original indicators because they're not all that bad.
These reasons for measuring GDP still exist and are embedded in our cultures. So we need to be very careful and understand the reasons and be able to challenge them, one after another.

GDP has three major limitations as a measure of progress:

First, it only values production. It only measures the things that are put on the market. All other activities are worth nothing. Even more, they are acquiring negative worth, because the more we do these non-monetarized activities the less time we are spend producing or consuming goods, so the less we do these things the better.

Second, GDP does not look at how production is organized or how income is distributed. It does not distinguish between egalitarian economies and those with extreme disparities.

Third, GP does not take into account the national heritage or the natural environment.

The type of progress we should be measuring and analyzing needs to be larger than just production. It nees to include the concept of heritage and culture. I t needs an environmental dimension. We need to talk about social capital, and more the heritage of social health. We need to address health care inequalities. Look at Miringoff's work on social health. We need to look at individual satisfaction, or more objective measures. We need to talk with both researchers and citizens to define what we mean by progress. All citizens have a say in defining and developing these measures, in expressing their common heritage.

Enrico Giovannini commented: the participatory aspects are most important, and we lose the sense of the collective when we concentrate on individual measures.

Gilda Farrell then took the microphone. We are always in the middle of the opposition between the material and immaterial. As societies, as nations, we have granted importance to the measurement of the material. So how can we do something different, create a method that teaches people to think about progress differently? In our concentration on the material, we have somewhat strayed from the definition of progress. We can't explain how we are actually progressing. We are emphasizing the production of goods without an overarching vision that explains why producing and consuming are “progress.” How can we grasp the idea of what we are heading for and what we can do about it?

How can we become more inclusive?

Where are the limits? Until now, we have forged a link between freedom and choice. We express choice through choosing, and so the more choices we have, the more freedom we have. If we adopt this view of progress, we adopt the constraints implicit in the definition, and we detest anything that limits our freedom to choose. We detest the idea that we need to find creativity in limits. When you decide to consume only seasonable products, you accept the limits of the natural seasons and what fruits and vegetables will be available for your dinner plate. You can be creative in how you use the seasonal vegetables in how you eat, and can take joy in that creativity as you foster a more sustainable eating pattern. Which constraints might make us more creative as a collective group, as a society?

What promotes inclusiveness? How will we change objective/subjective perceptions? Objectivity can be measured without individual input. Subjectivity allows specificity. Unhappiness and evil come because the objective measures are increasing but subjectively we are not sharing the same vision of well-being -- and we never ask why. Objective measures can also look at what is shared. There have been plenty of exercises in this regard. But we need a method to proceed. We are seeing new, more concerted methods to assess perceptions. Perception needs interactivity and the spoken word and confrontation to be objective. We must create the space to act.

From studies on happiness, we can derive political action. Nobel Prize winners have shown we can progress if we stimulate social interaction, not consumption. That's a new methodology for societal progress. Foster interaction. We need to reformulate the content of laws and of rights. We need to recreate, with citizens, the dimensions needed to create societal progress. Rights to recognition, second opportunities, free speech, creativity. We need complementarities to reformulate objectives and we need to be clear in that debate.

Enrico Giovannini: We can draw two conclusions from the happiness research. First, it is not about replacing GDP with a synthetic indicator. We need to recognize the complexity of the different dimensions of progress. Second, economics are central in measurement. We need to admit other dimensions of usefulness, not just consumption. It will not be easy to create the theory/measurements consistent with scientific principles. Grasping them may be powerful. A compound indicator has the power but hides the complexity.

Jean Gadrey: We can't expect to create miracles, but if we do things right, what we do create can be very useful. We should note that all of civil society, including social institutions, are excluded from the “expert” discussions. In an economic crisis we tend to react by refocusing on the economy. We can only go beyond GDP when the GDP is at a good level – we need to move beyond that because it says that social well-being is a luxury, when in fact it may be a precondition for success. The question is whether this crisis needs new indicators. There is a gap between institutional experts – economists and philosophers – in an era when we are at a loss for meaning. We have a gap between experts and citizens. We need to promote joint, collaborative work. People have the ability to gain knowledge when they talk with experts, and they bring the on-ground experiences and they know the values. If we don't involve the civil society then we don't include the values, and the indicators that we derive are no good. The indicators then get built according to the unexpressed, unexamined values of the experts. Most think the simplest indicators are not serious because they are not well founded and seem arbitrary; for example, many experts do not think that the “ecological footprint” measure is serious enough. However, the experts are acting without realizing that, in the face of the domination of the GDP as a measure of progress, we need dialogue to determine what measures we should use. Otherwise, we may end up with one set of indicators popular among the citizens of the world and the experts operating with another, completely different set of indicators.

At the Stiglitz Commission, we are recruiting new members. We have taken a top-down approach, in that members came from appointment by high-level experts. We need civil society engagement. It is possible that the Stiglitz Commission may serve our purposes in finding new measures of societal progress. But to make that happen, we need direct dialogue with the commission; we need to organize citizens, and we need to create a working group of national statistics institutions. Next March we are organizing a great meeting. We will focus on the exchange between experts and activists. In doing so we acknowledge that civil society, in its own way, has become an expert.

Phillipe Beraud and Franck Cormerais presented next. Phillipe said that he, as an economist, began with a feeling of a lack of power and no answer to the challenges we are facing. We need to go beyond theory.

We currently use an unsatisfactory matrix for understanding the economy and it does not reflect societal values. There is no bridge between meaning and calculations. Adam Smith called it an “invisible hand” but I call it a mask of ignorance. Marx was fetishistic in his analysis, but could not describe the meaning behind progress. Classical economics hide meaning behind terms like “market' and “balance.” There is no value analysis except for those discussions that do not involve measurement. The only way we measure values is by the value associated with prices. But we never discuss the price distortions created through oligarchic processes. The question of “why” is essential to answering the question of “how.”

Franck shared a model with us, that had two axes crossing. On the vertical, ethical and political principles (societal contract, political dimension) was north, while creative collective principles (societal value model of development, question of production) was south. On the horizontal axis, outspread rational understanding (calculations and science) was to the west, while enlarging compatibility (creating accounts, information base, indicators) was to the east. In the middle was individual well-being and societal progress. If you draw it out by hand, you'll see what I mean – I don't know how to recreate the model in this format.

Enrico Giovannini commented: We need to try to measure the immaterial factors. We need to think about collective creation as opposed to only thinking about production. We need to get beyond the capital of product to social/human capital – and beyond that is the collective creation of values.

Giulia Ranuzzi de Bianchi, from the OECD, spoke next. She was sharing the taxonomy of societal progress in the OECD framework. (By the end of the second day, Enrico shared that the comments from the group had helped them rethink the taxonomy display, and that the new display would be shared shortly on their website. The concern was how you describe the human element in relationship to the environmental element. Interestingly enough, Saamah Abdallah's model/framework at the new economics foundation looks much like the OECD model turned on its side. Anyway, the OECD statistics webpage is http://www.oecd.org/statsportal/0,3352,en_2825_293564_1_1_1_1_1,00.html here and you can check it out for yourself.)

Back to Giulia's comments. Taxonomy means a law of arrangement. OECD's taxonomy of progress is an effort to establish a framework of the domains of the dimensions of progress.

Frameworks:

• facilitate coordination;
• break progress into manageable parts; and
• allow shared monitoring and assessment.

What is particularly exciting is the opportunity for a participatory approach to the assessment of progress in countries. We are looking to create a dynamic tool that covers a broad range of issues.

We observed the following as important inputs into the framework development:

• Simplification should be the object. Keep it simple.
• Make sure you're giving the users what users want.
• It's critically important that stakeholders are involved.
• Combine subjective and objective measures.
• Aggregate individual choices.
• Transparency, transparency, transparency.

There is no single international framework upon which everyone agrees. We won't all agree with this one. But it is, hopefully, a useful framework.

OECD Framework (based on the work of Robert Prescott-Allen):
Picture two ovals, one representing the human system, the other the ecosystem. In the center of the human system is human well-being; surrounding that are areas of governance, culture, and economy. In the center of the ecosystem is the ecosystem condition. Connecting the two is a diamond shape labeled “use of resources.” Go to www.oecd.org/progress to get a better explanation. But it made sense when Giulia explained it. Of course seeing the pictures really help.

Giulia ended with Spinoza quote about needing to understand and our duty as human beings, and then a Shumacher quote that went something like “everything in this world has to have structure, else it is chaos.” (In a later session someone referred back to this quote, suggesting we need to embrace the creativity of chaos. Did I mention that the French are very philosophical people?)

The audience asked questions/made comments next:
We shouldn't think of the human system and the ecosystem in opposition. We are not separate from the ecosystem; we are inside nature.
Is progress the right word? Should we look for a different, uncontaminated word?
These are comments reflecting my doubts. Progress has been the objective of societies for a long time. The word has been mythified – it needs to be demythified. Progress is not an object, it is a new good future. But instead we have been seeing de-progress, if I need to invent a word. We need to clarify the concepts we are working with.
We are still using the tools of the past, and we say they are the wrong tools, bad tools. Historically these tools were the answer to the demands and the issues of the time. Tools have changed in different contexts, and we have changed, which is why we seek a new tool.
As an industrialist, I think we need to question how we position ourselves in relation to technology. How will technology help us? How will technology keep us from creativity?
The question of progress is essential. Progress is about the meaning we give to that word.
Historical indicators may not be valid today.
Happy to see elected representatives talking about progress in terms of sustainability. Happy also to see multidisciplinary thinking move forward. That is progress.
We must treat these problems with moderation and tranquility. We are dealing with questions of freedoms of choice and of limits. The Chinese just discovered freedom of choice when they began to create the space for privacy. The challenge we have to answer is: where does the collective begin and end?
We should avoid quoting St. Augustine and Hegel if we want to truly embrace citizen involvement. We need something better than participative democracy, and something more than representative democracy. How can we get better than that? How can we avoid contamination of participative processes by self-proclaimed leaders because they can quote philosophers?

Enrico Giovannini responded: The term “progress” was chosen by the OECD because “sustainable development” had already been used to launch political processes and movements. We chose “progress” intentionally because the word had not already been defined for us. In addition, we needed a word that was recognizable and easy to translate across multiple cultures.

Jean Gadrey: We need to think about what words have been contaminated too much by economists? What words will help us in the movement?

Franck Cormerais: Progress is essential; we are creating a second modernity. We need to create the relationship between the creation of wealth and the distribution of wealth.

Giulia Ranuzzi de Bianchi: We thought about putting the human inside the ecosystem but we wanted to have a way to show the difference between inputs and outputs.

Gilda Farrell: Chaos is needed – it is the lack of forcing conclusions. We need the unfinished creativity. We need to think about the mediations between individual well-being and societal progress. It is hard to go from the material to the immaterial. We need indicators that tap into individual potential. We need to extend our horizons.

We need to rethink our culture. We need to think about what we have built on the back of Descartes, who said man needs to master and control nature. We need to recognize our patrimony. Now we are looking at progress and thinking of the nonquantifiable. We need openness to new voices without the dictatorship of participatory democracy.