(Material) Well-Being in Economics: Beyond GDP

*Marisol Manfredi*

### **Abstract**

This chapter examines the current notion of well-being utilized in the mainstream economics, which is based on the utilitarian philosophy. The analysis focuses on the alternative proposals to expand beyond the existing framework, such as Easterlin's paradox, multidimensional indexes of well-being, capabilities approach, and the cosmovision of the indigenous traditions. The chapter first explores the main definition of happiness and equilibrium of ancient Greek philosophers. Secondly, the chapter investigates the mainstream corpus of Economics with the Utilitarianism as a moral core. Many contradictions and inconsistencies in the implementation of the notion of well-being are unfolded. Thirdly, key proposals to revolutionize the notion are introduced. Given the sociological and environmental problems the Anthropocene has caused, and these ideas could lead to original and inspiring solutions.

**Keywords:** well-being, well-fare, happiness, economics, policy-making, index, GDP, HDI, sustainability, degrowth

### **1. Introduction**

The fact that the endless acquisition of wealth has been hailed as the surest path to happiness does not raise many eyebrows, especially among economists. Usually, if economic growth is a problem, it is because there is not enough of it: the more, the better. The blindness pursuit of economic growth—operacionalized through the Gross Domestic Product (GDP)— aims for the production of goods and services, despite their qualitative characteristics, at large scale, which is "automatically" converted into well-being, and therefore, a "better" country/state.

However, paradoxically, the growth-centered economy made us witness the world changing for the ecological worse with the onslaught on nature reaching an unprecedented intensity, not to mention socio-democratic aspects of it.

Therefore, dismantling the idea of endless material growth as an axiomatic necessity of countries has reached exceptional significance. The beating heart of this change lies in alternative pathways to well-being in Economics, beyond its material aspects, which is the primary concern of this chapter. It is fundamental to question what the word "well-being" implies for current states and policy-makers. All in all, if the well-being of the people is one of the fundamental objectives of every political economy, then it is necessary to unfold what this construct embeds to understand the current state of affairs of our states nowadays.

This chapter is organized as follows. Section 2 introduces the first notion of happiness available in the literature: the concept of eudaimonia by the ancient Greeks philosophers, that it has been completely forgotten inside the mainstream corpus of Economics with the arrival of the Utilitarianism, which is presented in Section 3. Also, this section presented the consequences of using this moral theory as the dominant informational base, leading to the pursuit of growth as a main objective of every state, monitored by the GDP. Finally, Section 4 shows and discusses recent and alternative proposals that expand the notion of material well-being (and the utilitarian philosophy): the Easterlin's paradox, which demonstrates that more income does not imply more happiness; the existence and development of multidimensional indexes of well-being that consider subjective components; the Amartya Sen's capabilities approach that embeds a higher notion including education and health beyond the material; and the cosmovision of Buen Vivir, a Latinamerican indigenous tradition that understands well-being as the harmony with nature.
