From growth to well-being: EU should look beyond the economy
Economic growth and competitiveness should not be the sole focus of European policy. In a paper, researchers suggest how the next European Commission can develop an alternative policy model that centres people’s well-being.
The EU’s current plans focus mainly on economic growth and being able to compete with China and America. ‘Obviously, it is important for us to be competitive and innovative, and have a strong economic foundation. But if you focus solely on economic growth and competition, you lose sight of what economic development should really be about: contributing to a good life for people’, says well-being economist Rutger Hoekstra, the paper’s editor and coordinator of a European project on the wellbeing economy (WISE Horizons).
These are uncertain times. Geopolitical tensions, the rising cost of living and the climate crisis are just some of the problems that cause people to feel apprehensive about their future and that of the next generations. The European Commission urgently needs a policy agenda to tackle these challenges and uncertainties, says the paper, A European agenda to navigate uncertain times. In it, researchers show how the EU can improve everyone’s wellbeing, now and in the future.
What is well-being?
Well-being is a broad term relating to different aspects of life. It is about physical and mental health, economic stability, social relationships, high-quality education and finding meaning and purpose in life.
Different names for the same thing
Over the past 50 years, many ideas have been suggested for improving everyone’s physical, mental and social well-being, both now and in the future. And some of these have been put into practice. In the Netherlands, for instance, we have Statistics Netherlands’ Well-Being Monitor, and internationally there are prominent examples such as the Sustainable Development Goals, Doughnut Economics and the Human Development Index.
‘If you look at these different systems, you see that they all focus on three things: the population’s current well-being, a fair distribution of well-being and the well-being of future generations’, says Hoekstra. ‘So the aim of an alternative system is sustainable and inclusive well-being. However, the different terminology used makes it unclear to policymakers, the media and the public what the alternative is to the gross domestic product (GDP), the measure of our economy. Whereas with the GDP it is clear from the get-go what you are talking about.’
What is needed?
In the paper, the researchers want to show how existing ideas can be translated into European policy. This will mean reforming the European Semester, the annual coordination of the EU’s social and economic policies, which results in a kind of coalition agreement for the EU. According to the paper, the European Semester should be based on three principles.
First, improved monitoring systems to measure progress and forward-looking evaluation of future policy. Second, plans made in the European Semester should be based on sustainable and inclusive well-being. This is where the major policy goals are set out. And third, these goals should be translated into specific policies.
It is hugely important that these policies are not contradictory. ‘Take fossil fuel subsidies’, says Hoekstra. ‘These are good for employment in the fossil fuel industry, for example, but bad for climate change. You need to develop policies that are good for employment and sustainability.’
Overcome conditioning
Hoekstra and other researchers are talking to policymakers and politicians about how to factor sustainable and inclusive wellbeing into policymaking. Nearly all of us agree that there is more to life than making money, he says. In her speech at the Beyond Growth conference in 2023, the EU President herself, Ursula von der Leyen, said Europe needs a growth model that is sustainable until way into the future.
‘The European Commission sent a signal here. But that does not mean society will change from one day to the next. That is something for the longer term and you see that in progress made over the past 50 years. People are used to thinking that things are going well if the economy grows and badly if the economy shrinks. It’s this kind of conditioning that we need to overcome.’