Enlightened Economics

Economics for an Enlightened Age

Posts Tagged ‘sustainability’

• 2015 Sustainable Competitiveness Index

Posted by Ron Robins on December 10, 2015

“The Global Sustainable Competitiveness Ranking 2015 is topped by Iceland for a second year running, followed by the Scandinavian nations.

The Sustainable Competitiveness Index is based on a competitiveness model that tries to evaluate exactly this – the ability to sustain wealth creation by incorporating all relevant pillars of sustained growth and wealth creation: natural capital availability, resource efficiency, social cohesion, innovation and business capabilities, and government-led development direction. The Sustainable Competitiveness Index also integrates data trends over time to allow for a better expression of future development potential.

The results aim at serving as an alternative to the GDP, for academic, policy or investment decisions, based on current and future development prospects and risks of nations.”
Global Sustainable Competitiveness Index 2015  (PDF), November 2015, SOLABILITY, Switzerland.

Commentary: Ron Robins
This is a terrific index concept. It needs to get more exposure to encourage governments, corporations and others further engaged in the sustainable competitiveness of their economies.

It’s interesting that the U.S.A. and the U.K. rank 41st and 48th respectively on this index while the Scandinavian countries dominate the top spots. The Scandinavian countries lead most alternative GDP indices as they are not only exceedingly high-income countries — but are top-tier performers on most other component measures as well.

The unique contribution that this index makes is the combination and weighting of its various components in endeavoring to predict the future direction of countries with respect to their total sustainability. Many countries might perform well on income measures but the sustainability and potential growth of those incomes with respect to the depletion and replenishment of their natural resources, social cohesion, etc., is wanting.

Also, countries like the U.K. and U.S.A. do relatively badly on this index because there’s a belief by its designers that governments should lead in all areas related to sustainability. Something that is politically difficult and unacceptable to many in the U.K. and America. Hence, China and Japan lead on this measure. Even Russia is ahead of the U.S.A. and U.K. on this measure — which probably raises some questions.

Nonetheless, this index is a valuable addition to alternate GDP indices.

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Posted in Economic Measurement, Economics, Environment, GDP Alternatives, News, Commentary | Tagged: , , , , , , | Leave a Comment »

• ‘Voluntary Simplicity’ Brings Higher Consciousness into Economics

Posted by Ron Robins on February 3, 2009

A sweeping new consumer frugality is enveloping the developed world bringing higher consciousness into economic affairs. Some call it ‘voluntary simplicity.’ And it ties in well with my thesis that as a more balanced, higher consciousness arises in consumers, their consumptive and savings habits will change significantly and more sustainably. Thus, I believe the age of Enlightened Economics is ahead us.

Voluntary Simplicity defined

The term voluntary simplicity (VS) according to the Simple Living Network is first thought to have been used by “Richard Gregg who, in 1936, was describing a way of life marked by a new balance between inner and outer growth.” Some might argue that numerous people are being forced into VS-as the unemployed might be, for instance. There is some truth to that. Nonetheless, I believe that most of us are sensing a new reality dawning in the consumptive habits of almost everyone around us.

For example, more and more people in developed countries are realizing that their lives have become so dominated by material possessions that the caring, maintenance and use of some of these possessions take too much of their time, energy and money! (i.e. ‘McMansions,’ large homes for just two or three people are going out of style.) They are also realizing that many of these products are damaging to the environment. Thus, a degree of frugality is coming to be seen by countless numbers of people as the way forward. It is important to understand though, that this VS style of living is not to be compared with an agrarian ‘back to nature’ lifestyle, nor related to material impoverishment.

The Simple Living Network states that the values underlying VS are: material simplicity, human scale, self-determination, ecological awareness, and personal growth. These personal values are often attributed to individuals of higher consciousness, and mesh well with the understanding of Enlightened Economics, which believes that with rich inner development of our minds will come the ability to fulfill our individual and collective economic aspirations.

The exact numbers of individuals abiding by the VS lifestyle, either knowingly, or unknowingly, are not known. But it is apparent that its ranks are growing fast. Evidence of this is seen in the cutting back of material consumption, increased spending on education, and a deepening interest in the environment, personal growth and spirituality.

Modern economies lose their way as happiness fades

Economics should be about assisting us in fulfilling our dreams while allowing us to enjoy great happiness and fulfillment in life. However, as practised today economics is sorely lacking in achieving such goals. In fact, when looking at measures of happiness, authoritative research by Dr. Robert Lane of Yale University, shows happiness actually declines as GDP grows! Other studies such as the one by Prof. Arthur A. Stone, of Stoney Brook University School of Medicine, demonstrate that happiness is unrelated to income.

People in developed countries everywhere are beginning to understand the deep flaws of a modern life based principally on the acquisition of material possessions. Hence, our lifestyles are increasingly favouring the nourishment of our subjective values and inner development, over outer material goods.

The coming era of voluntary simplicity

VS lifestyles encourage more entrepreneurship, independence, self-employment, the purchase and manufacture of sustainable products and services, lower debt levels, reduced consumption, and higher savings rates plus a tendency to save and pay cash for purchases. (For related reading, see my editorial on the Investing for the Soul website, Everyone Becoming A Cultural Creative.)

With society favouring qualitative and subjective values related to lifestyle, there will be considerably less emphasis on the Gross Domestic Product (GDP) statistic. This statistic simply totals the market value of all final goods and services sold. New economic measures that include quality of life factors will become the norm. These other measures might include the Calvert-Henderson Quality of Life Indicators, the Genuine Progress Indicator (GPI), the Index of Sustainable Economic Welfare (ISEW), and variants of them.

The economic transformation giving rise to voluntary simplicity

Almost nobody in the mainstream economic community predicted our present circumstances, illustrating the deplorable state of economics in our institutions today. They naively believed it was fine for debt to grow exponentially while incomes stagnated and savings crashed. And then they wondered why the consumer stopped spending and acting more frugally. It’s amazing how such brilliant minds could get it so very wrong. It was primarily only those (like myself) adhering to the ignored and maligned Austrian School of economics who largely got it right.

People in developed countries are increasingly favouring more non-material growth that is founded on higher inner values, knowledge, simplicity and sustainability. They will not abandon material joys, but the emergence of VS is telling us that long-held so-called economic ‘truths’ are shattering before us. An age of Enlightened Economics is being born.

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© Ron Robins, 2009.

Posted in Consciousness/Psychology | Tagged: , , , , , , , , , , , , , , , , , | 2 Comments »

 
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