Growth and Welfare: Rising Income And Declining Satisfaction

Bharat Dogra
The Statesman, 31 october 08

In recent years whenever our ruling politicians have been told about increasing problems and discontent of the people, they have responded in various ways. They never forget to draw attention to the high rate of economic growth. “Look at the 9 per cent growth rate, things can’t be bad”. But what politicians forget is that there is an increasing disconnect between the growth rate and GNP figures on the one hand and the real well-being of people on the other. This leads to growing disenchantment with existing economic indicators like the GNP. So much so that the French government, responding to people’s changing perceptions, has now launched efforts to find other indicators which can be a better reflection of the real condition of the people.

Even the 23 high-income OECD countries, which are supposed to be the biggest achievers and beneficiaries of the existing path of development, are discontented.

The Human Development Report states: “Although per capita incomes in the OECD countries now average $20,000, surveys reveal growing insecurity and considerable dissatisfaction.” In Britain, a study by the New Economics Foundation which prepared an index of ‘Sustainable Economic Welfare’ revealed that during 1975-1990, the GNP rose by about 33 per cent but sustainable economic welfare fell by about 50 per cent.

Quality down

In a survey on the changes in the quality of life by the British Social Science Research Council covering a five-year period, the people who were interviewed almost unanimously said that their level of consumption had gone up yet the quality of life had gone down during the last five years. They feared that this trend of increased consumption and a decline in the quality of life would continue over the next five years.

Most countries have registered an increase in life expectancy in recent decades; but this has been accompanied generally by an increase in chronic health problems, physical as well as mental. The Director-General of WHO said recently, “Increased longevity without quality of life is an empty prize.” The state of the World Health Report 1997 (WHR) prepared by WHO went a step further when it added, “Longer life can be a penalty as well as a prize. A large part of the price to be paid is in the currency of chronic disease.”

In Britain, for instance, General Household Surveys after a 16-year gap revealed a 50 per cent increase in ‘long standing illness’ and a 75 per cent increase in acute illness during the preceding two weeks. Walter Yellowlees, a highly experienced doctor of this country said in a paper presented at the Royal College of General Practitioners : “I believe it is true to say that in those countries which have achieved unparalleled advance in technological skill in medicine and in what is called standard of living, we are witnessing the decay of man ~ the decay of his teeth, his arteries, his bowels and his joints on a colossal and unprecedented scale.”

Suicide rates are known to be quite high among some of the most economically prosperous countries, raising disturbing questions. In Australia (what appears to be a land of fun and fortune), suicide rates are reported to be among the highest in the world. As many as ten per cent of Australians commit some form of self-harm.

China is supposed to have the most impressive record of economic growth in recent years. However, a recent study by WHO, Harvard University and the World Bank noted that China also has one of the highest suicide rates in the world ~ about thrice the world average.

In India, the price rise is disconnecting the common people from the widely publicised data of high economic growth. The impact is worse than what is indicated by official statistics of inflation. In recent interviews with weaker section families, this writer found that people would time and again come back to talking of the impact of inflation regardless of what question was being asked.

However, even before the present phase of inflation, middle class families were also complaining of a sense of deception ~ of seeing their cash gains being lost in the middle of other, frequently bigger changes.

Many people complain bitterly about the steep hike in educational and medical expenses. With the increasing privatisation of education, people have more diverse options for their children’s education and careers, but for many of them this gain has come at too heavy a price. There is increasing economic tension as limited income gains are more than wiped out by sharply rising educational expenses from early school to the university level. At the same time, there has been a decline in the standard of government schools and closer career linkages with expensive educational institutions so that few options may be left for the people to opt out of the expensive system.

The lack of options is becoming even more difficult in the case of medical treatment. In most parts of the country, the standards of government hospitals and public health centres have been allowed to deteriorate. Simultaneously, there has been a proliferation of private hospitals and nursing homes, including several in the ‘five-star’ category. People are torn between the desire to avail the treatment here and the prohibitive expenses. A single serious illness or accident in a family can eat up all savings, perhaps also lead to indebtedness. Close family ties push people to seek better and convenient medical treatment at all costs, leaving behind a legacy of debt and economic stress even in the middle of rising cash earnings. Steeply escalating expenses of medicare and medicine cause tension and uncertainty among people regarding how to cope with a medical emergency.

Lopsided growth

Although India has been known for its closely-knit families, the trend towards a breakdown of ties has increased. This is partly because of the same factors that promise a rise in monetary gain. The disruption of family life leads to stress and depression, above all for children, and increasing economic problems as well.

Growing inequalities in the wake of fast but lopsided growth leads to social tension and a feeling of being left out among many people. In the middle of all the glitter and glamour of fast economic growth, many may feel squeezed out or alienated compared to those who can join in the celebrations. Thus in a situation of rising inequalities, in terms of relative gain and loss even many of those who have not lost in real terms may nevertheless feel like losers. Such feelings get aggravated in times of inflation when the majority suffer a huge pinch even as the party goes on uninterrupted for a select few.

There needs to be a wider and deeper realisation of these factors which matter a lot for the well-being of people beyond the statistics and rhetoric of growth and GNP. A better realisation of the real basis of people’s well-being will make it possible for economics and governance to become more involved in the true welfare of people.

The writer is a social activist