Aristotle once said, “Happiness is the meaning and purpose of life. It is the whole aim of human existence.” That statement is taken more literally in some societies than others. Bhutan is a tiny Buddhist kingdom high in the Himalayas between India and China, and the Center for Bhutan Studies recently announced it will be convening an international seminar on “Operationalizing the Concept of Gross National Happiness,” to be held in Bhutan from February 10 to 20 of this year. The development philosophy of Gross National Happiness (GNH) is in stark contrast to the traditional Gross National Product (GNP), which measures material and financial wealth. Gross National Happiness represents the highest Bhutanese values. The king of Bhutan, Jigme Singye Wangchuck, is the founder of this unique philosophy.

Bhutan is a relatively isolated place, but the people of Bhutan started complaining to their king that tourists were spoiling the environment and trampling their sacred lands. They were also concerned that economic development would cause them to lose their cultural identity. In an address to 150 heads of government at the United Nations Millennium Summit on September 8, 2003, Lyonpo Yeshey Zimba said, “The growth of material poverty and spiritual hunger which undermines the value of human life are some of the greatest challenges faced by the governments around the world. His Majesty, the King, believes that the ultimate purpose of government is to promote the happiness of the people.”

This may all sound rather corny to the average American, but remember that the foundation of our country was built on the principles of life, liberty, and the pursuit of happiness. The only problem is that we as a nation seem to be pursuing money instead.

Gross National Happiness is not just an “airy fairy” concept that a small country in the Himalayas is concerned about. It is on the minds of many of the world’s most progressive leaders. Here is the reason: Since 1950, the material wealth and consumption of industrialized nations has more than doubled. However, the happiness reported by citizens of those countries has not increased. And in many countries, social ills and depression have reached alarming levels. Many social planners, government officials, and bankers around the world are concerned that Gross National Product–tracking what each country produces–is not an effective way to measure true progress.

Why? If a country manufactures bombs, produces toxic chemicals, or creates an increase in visits to psychiatrists, the resulting increase in the Gross National Product is celebrated as a sign of progress. However, I do not think many people would consider the production of these goods and services as representing progress. Many world leaders are now concerned that the GNP is an outmoded tracking mechanism.

The Triple Bottom Line

This simplistic measuring system was developed to track countries’ economic progress as they rebuilt their economies after World War II. Its primary purpose was to guide countries that were using grants and loans to recover after the devastation of the war. But in today’s world, many organizations are experimenting with more comprehensive measurements.

For instance, the World Bank, the IMF, and the United Nations have been discussing the concept of the triple bottom line. The triple bottom line holds profit-oriented organizations accountable in three different areas. Number one is “financial accountability,” which is a measure of the organization’s financial sustainability. Number two is “social accountability,” a measure of how much the company is contributing to the social well-being of the country. Number three is “environmental accountability,” which measures the company’s pollution, and depletion or conservation of natural resources.

Many non-government organizations are experimenting with a quadruple bottom line. In addition to financial, environmental, and social accountability, they also are accountable to their values. In other words, how effectively are they promoting, upholding, and encouraging the values that their founders and contributors believe in?

The current tracking system encourages social disruption and environmental destruction, especially in developing countries, since short-term profits are all that are tracked. What gets measured, gets done. The need for a better international scorekeeping system is clear.

Rethinking What’s Important

Bhutan’s orientation towards Gross National Happiness does not negate the scientific, ecological, or economic benefits of modern society. It merely asks how these benefits will, in fact, increase happiness and the overall well-being of humans.

Traditionally, there was an assumption among economists that if people had more money, they had more options, and they would use those additional resources to select the options that made them happiest. Essentially, the concept of Gross National Happiness encourages people to rethink what is important to them and how the success of a nation should be judged. Should success be judged solely on the ability of a group of people to produce and consume, or should it be based on the quality of life?

It is interesting to note that the U.N. has for many years now rated Canada as having the highest quality of life of any country on the planet. Many Americans look down their noses at Canada’s higher tax structure and socialized medicine; however, when you look at the overall quality of life enjoyed by Canadians, it is in many ways superior to ours.

The Absurdity of Bottom-Line Thinking

It turns out that when we only focus on economic progress, there are many qualitative distinctions that are lost. Economic calculations ignore the value of such things as fresh water, green forests, clean air, and traditional ways of life merely because they cannot be easily quantified. Gross National Product also completely ignores the unpaid family nurturing and volunteer sectors of the economy. Some studies show that this “compassionate economy” represents as much as 50% of all productive work in societies.

And when the GNP measures an increase in production and consumption, which is called success, there is no mention of the proportional increase in waste or consumption of finite natural resources.

Take this bottom-line-only thinking to its logical conclusion: As one observer has noted, if financial progress were all we cared about, it would be a good thing to have a daily plane crash. After all, think of the economic activity that the crash would create. There would be the clean-up, then the funerals, and then a new plane would have to be built. Then there would be the ensuing lawsuits that would drive even more economic activity. We all know that war pumps up GNP, but does that make war a good thing? Clearly this is not something we want to promote.

The Need for a New Model

All this points to the need for a new holistic economic theory that takes into account all of the factors, not just the financial ones, that influence human well-being. The World Bank now has a wealth index that includes the concept of human capital and environmental capital. The UN Human Development Index measures things like education, human rights, records, and life expectancy.

One of the most forward-thinking and interesting indicators is the Calvert-Henderson Quality of Life indicator, which also incorporate cultural values and activities of self-improvement and group participation. Hazel Henderson is one of the world leaders in this area and has teamed up with Calvert Mutual Funds (www.calvertfunds.com) to create indexes that help Calvert make socially responsible investments. They have developed a very effective way of tracking their version of progress in developing countries and in companies that they might invest in.

In the research I have been doing recently on the science of happiness, it has become very clear that America is focused on pursuing happiness by one path only: short-tem pleasure and consumption. The ancient Greeks believed that the best use of leisure time created by excess wealth was to learn, to develop the mind. But based on their use of time, most Americans seem to believe that the best thing to do with leisure time is to watch TV.

GNH and Life Planning

Just as major international organizations are concerned about finding a better way to define progress, many individuals are concerned about this issue personally. This is the foundation for the life planning movement. Tracking how much money we have is not an effective way to determine how successful or happy we are. It says absolutely nothing about qualify of life, just the quantity of money and stuff.

For the last 300 years, Western society has been asking the question, “How can we use technology to create more wealth?” Industrialized societies have doubled their standard of living in the last 50 years, but we have not increased our happiness. Perhaps it’s time to look at how we can use wealth to create what we truly want on this planet–happiness, health, and a sense of meaning and purpose in our lives.

If you use your coaching and counseling skills to help your clients get more happiness from their money, you are adding much more value than if you simply help them make more money. If you believe that there is more to life than the pursuit of money, perhaps it’s time to start tracking quality of life measures as well as investment performance for your clients.

Steve Moeller is president of American Business Visions and author of Effort-Less Marketing for Financial Advisors. Call American Business Visions at 800-678-1701, or visit www.businessvisions.com.