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The concept of gross national happiness (GNH) was developed in an attempt to define an indicator that measures quality of life or social progress in more holistic and psychological terms than gross national product or GDP. In today's developed economic nations, the term happiness is often equated with money, as GDP is often representative for the well being of a nation. A greater definition of happiness in less industrialized terms would be a "balance of individual and community interest." Gross National Happiness shows its revolutionary existence in some cultures and nations, as the concept of GNH slowly spreads.

The term was coined in 1972 by Bhutan's former King Jigme Singye Wangchuck, who has opened up Bhutan to the age of modernization, soon after the demise of his father, King Jigme Dorji Wangchuk. He used the phrase to signal his commitment to building an economy that would serve Bhutan's unique culture based on Buddhist spiritual values. At first offered as a casual, offhand remark, the concept was taken seriously, as the Centre for Bhutan Studies, under the leadership of Kaarma Uru, developed a sophisticated survey instrument to measure the population's general level of well-being.

The Canadian health epidemiologist Michael Pennock had a major role in the design of the instrument, and uses (what he calls) a "de-Bhutanized" version of the survey in his work in Victoria, British Columbia.

Growth of GNH
As far back as the Declaration of the United States, the founding father's of America radically included "the pursuit of happiness", which was seen as incredibly bold but innovative. The idea was that happiness goes a lot deeper into society than the goals of gross domestic product, such as economic growth with limited inflation and full employment.The initial radical view was because no other national government had given their entire population, not just the noble and elite, the equal right to "chase happiness". It has been apart of American society for so long now, that the thought is no longer so profound. The U.S. has kept the right to happiness, but it has become apart of the greater economic and political goals.

No other government even considered happiness of the people until 194 years later. When Jigme Singye Wangchuck became king of Bhutan his beliefs that government control based on economic strategy just dehumanized society and stripped its moral values and beliefs. The Bhutanese base their culture strong around the Bhuddist religion. He wanted to keep Bhutan's spirit and morality so he created a system of government to prioritize gross national happiness. Success of the country would be based solely off the quality of life of the people rather than wealth.

The king has been instituting policies aimed to accomplish goals of preserving its traditional culture, protecting the environment and maintaining a responsive government. In order to ensure the success of the government, Bhutan limited access and exposure to foreign influence and culture. The media is Bhutan is limited to shortwave programming by Bhutan Broadcasting Service, weekly papers, daily FM broadcasts and no television reception. The country lets only a very limited amount of tourist, and requires that at least sixty percent of its land remains forested. Most people work in farming in rural villages that are only accessible by foot. As education increases, however, they are traveling to towns to find alternate occupations. They export hydropower to India and still remain one of the lowest income countries in the world, but also one of the happiest with a dramatically increasing life expectancy.

The Bhutanese grounding in Buddhist ideals suggests that beneficial development of human society takes place when material and spiritual development occur side by side to complement and reinforce each other. Bhutan's home minister stated it perfectly when he said, "We have to think of human well-being in broader terms. Material well-being is only one component. That doesn't ensure that you're at peace with your environment and in harmony with each other." The four pillars of GNH are the promotion of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and establishment of good governance. At this level of generality, the concept of GNH is transcultural--a nation does not need to be Buddhist in order to value sustainable development, cultural integrity, ecosystem conservation, and good governance.

Developed countries recognize the success that this idea can bring. Corporate leaders, economists and social scientists are trying to develop measurements that imply not just money but also access to things such as health care, luxury time, time with family, conservation and other non-economic factors. GNH's influence is rubbing off on businesses and politics who are trying to take innovative steps to creating a well rounded balance of happiness and economic success.

GDP vs. GNH
GDP has numerous flaws long known to economists. GDP measures the amount of commerce in a country, but counts remedial and defensive expenditures (such as the costs of security, police, pollution clean up, etc.) as positive contributions to commerce. It is the total economic output. A better measure of economic well-being would deduct such costs, and add in other non-market benefits (such as volunteer work, unpaid domestic work, and unpriced ecosystem services) in arriving at an indicator of well-being. As economic development on the planet approaches or surpasses the limits of ecosystems to provide resources and absorb human effluents, calling into question the ability of the planet to continue to support civilization (per the arguments of Jared Diamond, among others), many people have called for getting "Beyond GDP" (the title of a recent EU conference) in order to measure progress not as the mere increase in commercial transations, nor as an increase in specifically economic well-being, but as an increase in general well-being as people themselves subjectively report it.

GNH is a strong contributor to this movement to discard measurements of commercial transactions as a key indicator and to instead directly assess changes in the social and psychological well-being of populations.

Like many psychological and social indicators, GNH is somewhat easier to state than to define with mathematical precision. Nonetheless, it serves as a unifying vision for Bhutan's five-year planning process and all the derived planning documents that guide the economic and development plans of the country. Proposed policies in Bhutan must pass a GNH review based on a GNH impact statement that is similar in nature to the Environmental Impact Statement required for development in the U.S.

While conventional development models stress economic growth as the ultimate objective, the concept of GNH is based on the premise that some forms of economic development are "uneconomic", a concept that is advanced by the nascent field of ecological economics. Such development costs more in loss of ecosystem services, and in the imposition of "urban disamenities," than it produces as a positive contribution to well-being. (The difficulty, of course, is that for many forms of development, the gains are taken privately, while the costs the development imposes are born generally and publicly.)

Under the goals of GDP sometimes lies the rights to GNH. A good example is symbolic in the difference between America's governmental ideals and Bhutan's governmental ideals. America's view is that we have the right to pursue happiness, but on the other hand the Bhutanese monarch’s goal is to deliver happiness to his people. It holds an incredibly greater value. At the same time, Bhutanese government guarantees neither economic nor political rights to its citizens, and it has largely been governed as a closed, authoritarian regime.

Qualitative and quantitative indicators
There is no exact quantitative definition of GNH, but elements that contribute to GNH are subject to quantitative measurement. Low rates of infant mortality, for instance, correlate positively with subjective expressions of well-being or happiness within a country. (This makes sense; it is no large leap to assume that premature death causes sorrow.) The practice of social science has long been directed toward transforming subjective expression of large numbers of people into meaningful quantitative data; there is no major difference between asking people "how confident are you in the economy?" and "how satisfied are you with your job?"

GNH, like the Genuine Progress Indicator, refers to the concept of a quantitative measurement of well-being and happiness. The two measures are both motivated by the notion that subjective measures like well-being are more relevant and important than more objective measures like consumption. It is not measured directly, but only the factors which are believed to lead to it.

According to Daniel Kahneman, a Princeton University psychologist, happiness can be measured using the day reconstruction method, which consists in recollecting memories of the previous working day by writing a short diary.

A second-generation GNH concept, treating happiness as a socioeconomic development metric, was proposed in 2006 by Med Jones, the President of International Institute of Management. The metric measures socioeconomic development by tracking 7 development area including the nation's mental and emotional health. GNH value is proposed to be an index function of the total average per capita of the following measures:


 * 1) Economic Wellness: Indicated via direct survey and statistical measurement of economic metrics such as consumer debt, average income to consumer price index ratio and income distribution
 * 2) Environmental Wellness: Indicated via direct survey and statistical measurement of environmental metrics such as pollution, noise and traffic
 * 3) Physical Wellness: Indicated via statistical measurement of physical health metrics such as severe illnesses
 * 4) Mental Wellness: Indicated via direct survey and statistical measurement of mental health metrics such as usage of antidepressants and rise or decline of psychotherapy patients
 * 5) Workplace Wellness: Indicated via direct survey and statistical measurement of labor metrics such as jobless claims, job change, workplace complaints and lawsuits
 * 6) Social Wellness: Indicated via direct survey and statistical measurement of social metrics such as discrimination, safety, divorce rates, complaints of domestic conflicts and family lawsuits, public lawsuits, crime rates
 * 7) Political Wellness: Indicated via direct survey and statistical measurement of political metrics such as the quality of local democracy, individual freedom, and foreign conflicts.

The above 7 metrics were incorporated into the first Global GNH Survey.

Ed Diener, a psychologist from the University of Illinois at Urbana-Champaign, has developed a scale referred to as subjective well-being, a concept related to happiness and quality of life, which has been used to compare nations to each other on this construct. This study found that "high income, individualism, human rights, and social equality correlated strongly with each other, and with SWB" (p. 851, abstract).

GNH conferences
The 3rd International Conference on Gross National Happiness Towards Global Transformation: WORLD VIEWS MAKE A DIFFERENCE offered an opportunity to articulate Asian world views towards transformation in a 'message to the world'. It took place in Nong Khai and Bangkok, Thailand between 22 and 28 November 2007.

Implying the transition from a natural to modernized state, the 3rd International Conference on Gross National Happiness (GNH 3) took place in two locations: the first three days took place in rural north-eastern province of Nong Khai and the last three days in the urban campus of Chulalongkorn University in central Bangkok, Thailand. The organizers planned all activities so that participants were able to explore a large variety of venues, presentation and discussion formats and draw on the great variety and talents of the entire group of 800 participants who registered.

Main co-organizers were the Sathirakoses Nagapradipa Foundation (Thailand), The Center for Bhutan Studies, while local NGOs, progressive business group Social Venture Network and the government of Thailand in particular The Ministry of Social Development and Human Security, Thailand, have formed a support network together with research agencies and other government departments like the Thai Health Promotion Foundation.

"Rethinking Development: Local Pathways to Global Wellbeing", the Second International Conference on Gross National Happiness was held in Antigonish, Nova Scotia June 20–24, 2005, co-hosted by Genuine Progress Index Atlantic (proceedings online); the Coady International Institute; Shambhala; the Centre for Bhutan Studies; the Province of Nova Scotia; the Gorsebrook Research Institute at Saint Mary's University; and the University of New Brunswick.

The second regional Conference took place November 8–11, 2006 at Meiji Gakuin University in Yokohama. The conference examined Haida successes to apply non western economic and social modalities.

Happiness as understood by neo-classical economics
Under neo-classical economic theory happiness, subjectively defined, has long been the standard of measurement used interchangeably with utility as well as the general welfare.

Modern classical economics no longer attempts to quantify happiness or satisfaction through measurements in consumption and profits. Instead, modern neoclassical framework argue that individual's preference is revealed through choice. Therefore, if an individual decided to purchase an apple over orange, the satisfaction one derived from apple is revealed to be greater than an orange. Similarly, modern economics also consider that work/leisure balance is also matter of individual choice.

The idea that modern neoclassical economics define happiness on the basis of consumption is widely disputed. The basis of utility has been defined as revealed preference.

The assumption within neoclassic economics that satisfactions are highly subjective found expression in the work of Wilfrd Pareto, whose definition of optimal allocation in the nineteenth century was a crucial contribution that allowed further development of the mathematical precision of the discipline. Pareto argued that because satisfactions are subjective, we cannot know for certain that we have increased the amount of satisfaction in the system if we take a dollar from a billionaire and give it to a starving person to buy food; for all we know, the billionaire might have derived as much satisfaction from that dollar as the starving person does in spending it on food.

This counter-intuitive result is the cornerstone of Pareto Optimality: a system is in Pareto Optimality when no one can be made better off (in their own estimation) without making someone worse off (in their own estimation). In practice, "better off" and "worse off" are defined by consumption: by definition, it is always better to consume more. Thus, Pareto Optimality led to the bias in standard economics toward perpetual growth models--models that are increasingly being called into question, as being impractical (and dangerously destructive) in a finite world.

External studies
In a widely cited study, "A Global Projection of Subjective Well-being: A Challenge to Positive Psychology?" by Adrian G. White of the University of Leicester in 2007, Bhutan ranked 8th out of 178 countries in Subjective Well-Being, a metric that has been used by many psychologists since 1997. In fact, it is the only country in the top 20 "happiest" countries that has a very low GDP.

National happiness is also sometimes classified under empirically studied "National Happyism;" and psychologists, Drs. Ed Diener and Robert Biswas-Diener, have researched and analyzed what could be described as technological elements and characteristics of happiness for both individuals and societies.

Criticism
Critics allege that because GNH depends on a series of subjective judgments about well-being, governments may be able to define GNH in a way that suits their interests. In the case of Bhutan, for instance, they say that the government expelled about one hundred thousand people and stripped them of their Bhutanese citizenship on the grounds that the deportees were ethnic Nepalese who had settled in the country illegally,, though Bhutan's policies in this regard have no direct or obvious relevance to its use of GNH as an indicator guiding policy. Other countries, notably Brazil, Italy, and parts of Canada, are exploring use of measurements derived from Bhutan's GNH as their primary indicator of well-being. Critics say that inter-national comparison of well-being will be difficult on this model; proponents maintain that each country can define its own measure of GNH as it chooses, and that comparisons over time between nations will have validity. GDP provides a convenient, international scale; but (proponents of GNH say) to continue to use GDP for this reason in the face of its known flaws is to allow ease of measurement to define what it is we measure and value, an approach that is logically indefensible. Research demonstrates that markers of social and individual well-being are remarkably transcultural: people generally report greater subjective life satisfaction if they have strong and frequent social ties, live in healthy ecosystems, experience good governance, etc. Nevertheless, it remains true that reliance on national measures of GNH would render international comparisons of relative well-being more problematic, since there is not and is not likely ever to be a common scale as "portable" as GDP has been.

Alternative indicators of emotion as an analog to economic progress have also been supported by a number of NGOs such as the UK's New Economics Foundation, and are employed in some governments notably in Europe and Canada. . The Gallup poll system also collects data on happiness on a national scale.