Over the past decades we, as a species, have started focussing heavily on growth via gross domestic product as something that must increase. This article will compare the advantages of that with a focus on liveability.

In this article we will consider all growth, to be economic growth.

1 Key differences

Growth: This is a number based purely on measuring economic activity, as a total. An executive making ten times more a day than any underling makes in a year, or a more even distribution, makes no difference at all; just as long as the total salary remains the same. It prioritizes profit, irrelevant what that costs. Actually a high cost, if locally sourced, is a good thing since that means more numbers to be added into the formula. Note that only official economic activity is included, illegal or grey parts are usually excluded*.

Liveability: Here we look at precisely what is missing from GDP, such as changes in (mental) health, living in a nice neighbourhood and sustainability. The cost that was ignored by growth, such as diseases from pollution are a highly negative factor in liveability. By focusing on this, you do not have to miss out on wealth, in fact, the point is to build sustainable wealth, for all citizens. The main drawback is that quality of living can be hard to measure: Try putting numbers on how people feel, about each minuscule part their lives, at a specific moment in time, and turning those numbers into something a high-ranking bureaucrat can use.

2 Why choose economic growth

The best argument in favour of growth, measured in gross domestic products, or GDP, is that you can calculate it with official data. Making it easy to compare, it also indicates if the value of all economic activity is increasing. Note that an adjustment for inflation is not made, so it needs to be higher for actual growth. The data can also contain information whether the change is based on quantity or quality, generally a combination of both. So it is a clear yardstick that can be compared with other countries or region. The general assumption is that bigger numbers mean better lives for people.

A potential argument is that growth based approaches mean survival of the fittest, a drive to excellence and maximum profit. That argument does hold, since such activity is the main source of measurement. And over the past centuries it has brought increases in wealth to some areas. Fact is that we need to be able to quantify data and growth in excess of inflation is the only thing that can make people richer, on a macro scale.

3 Why choose liveability

Instead of basing our wealth on numbers, a choice for quality of living can be made. The goal of liveability is to combine not going broke with becoming healthier and happier, whilst looking out for the future. That means not polluting, or at least making costs to nullify any negative effects of (past) pollution.

It is about combining the quantifiable with the non-quantifiable things such as safety; can be measured in amount of crimes per 1,000 citizens, but you cannot really measure the fear that one experiences when walking on an unlit road during a new moon. It also includes things that can directly contribute to a positive economic Growth with access to quality education or shops and sporting events.

One of the goals is better, mental, health, which can increase economic growth, as it reduces sickness and lengthens lives (whether highly aged retirees make a net contribution in any system is a different discussion). Living in a pleasant place also reduces economic penalties, such as crime or lose of sleep. Every single summer some newspaper posts about how much value or growth is lost due to heat related insomnia; liveability reduces this, via the goal of full nullification for any insomnia.

4 Further discussion

Both sides have their merit; growth increases wealth, whilst limiting the distribution of that wealth to mostly the absolute top; governments then spread it among some of the needy, or potentially just their own creed. Liveability strives towards a healthy and safe live for everyone, whilst occasionally forgetting that all things come at a price, so you really do need a bigger GDP to make everyone rich.

Preferably both would be used, creating a situation where increases in total wealth are monitored, and at the same time changes in people lives are, hopefully, nudged towards improvements. One does not exclude the other, since they are both measurements and goals.

Corporate parties can also do both; instead of focusing on how much profit is made, look at how employees can be assisted to do a better job. This can mean anything, from a more flexible schedule, to being allowed to climb the ladder (instead of the boss` cousin). Whilst hearing them out, make sure to mention that the goal is for them to perform better, so abuse could damage their career.

Combining both methods is easiest for a single party, such as a person or family: When their income increases drastically, they have economic growth, enabling them to move to a better neighbourhood and afford medical care, plus the upgraded surroundings are likely to have reduced pollution and potentially better schools. As such the family experiences absolute gains in both liveability and monetary based growth.

 

*The EU does include some illegal activity, so that member states have to make a bigger contribution. They say that it is to create a level playing field with some countries including illegal activity and others excluding it. The author considers this unrealistic since illegal activity is per definition not officially registered. We do concur with them that the definition differs per country, so as an anti abuse system it can have some manner of truth.