iStock_000015508102_Baby SIZEDHe is happy who lives in accordance with complete virtue and is sufficiently equipped with external goods, not for some chance period but throughout a complete life.” Aristotle, The Nicomachean Ethics

So what is the economy for? How will we know if the economy is delivering what we want? As Principle 3 of Nevinomics states – the rules we set – how we construct the economy – depends on what we are trying to accomplish.

As discussed in the overview documents and in Addressing Alternatives to Flourishing, Nevinomics has chosen maximizing Flourishing as the key objective of the economy. Flourishing is defined as living within an optimal range of human functioning, one that connotes goodness, generativity, growth, and resilience.

Why Flourishing? Nevinomics has chosen maximizing Flourishing as the key objective because it is consistent with Principle 4 of Nevinomics – To arrive at the best rules we can to achieve society’s objectives, we need to take account of Realities about People. Nevinomics believes that Flourishing captures these Realities in a way that no other measure does. Specifically, Flourishing.

  • includes all the key elements of well-being used in other measures: material well-being, health, security, and social connectedness
  • recognizes that because people live through time, any useful metric needs to capture the success through the prism of a life that grows and changes in all its multi-dimensional complexity
  • understands that life has challenges and setbacks and incorporates these into the measure of well-being; indeed, the challenges and setbacks are often what defines life as worthwhile and any metric that does not take account of this overwhelming fact of human existence will not lead to functional policies
  • explicitly considers the concept of resiliency – the ability of an individual (and a society) to absorb these uncertainties in life and cope with them and emerge stronger, an essential feature of Flourishing

Overall, compared to Well-being, Happiness, and GPI, Nevinomics believes Flourishing is much closer to capturing the essence of what it means to be human. Using Flourishing as the objective will allow Nevinomics to explore issues that are critically important to people, but that are not easily addressed using traditional economic concepts. These issues include:

  • Health – Poor health makes it harder to Flourish. So with Flourishing as an objective, we need to explore how the economy supports health including not only the medical system but also such issues as the quality of the food supply, obesity, alcohol and tobacco use, etcetera.
  • Employment – It is not easy to Flourish when you are involuntarily unemployed, so employment, and being able to find work when you want to work will be at the core of Nevinomics.
  • Flexibility – Flourishing recognizes the human need to change and grow; Flourishing implies that an individual can follow a life path and this includes being able to change career or job direction, particularly given such high longevity. This means it is not enough for someone to have a job he does not like; there need to be ways for someone to change and adjust what they do, which implies that structures (such as adult retraining programmes, mechanisms to smooth/defer income) must be in place for people to make these transitions.
  • Resiliency – In an uncertain world, only those with resiliency can Flourish over the long term. Building resiliency means strengthening individual resiliency and also building economic structures (such as income smoothing) that support resiliency.

Overall, using Flourishing will allow Nevinomics to examine how the economy supports individual development paths. That is, people do not Flourish unless they are growing, so if Flourishing is the objective, then we cannot avoid the question of how our economic structures allow people to follow their own development paths.

Of course, many of us understand this at a visceral level. We all point to life-defining experiences coming from stressful times. We know that our children benefit from their teachers’ demands, but not if those demands excessive. We learn a new language incrementally. Careers take shape over time. The concept of Flourishing will make us think explicitly about these type of development paths in our economic structures.

As an economic concept, Flourishing is at its infancy, and is not well-defined empirically, although some of its early measurement has been outlined in Flourishing. And measurement of Flourishing will face similar issues as that of GPI and Happiness – what is the role of subjective perspectives in the development of a Flourishing index?

So while it will not be easy to develop excellent empirical measures, Nevinomics believes that it is worthwhile to start this journey given how Flourishing reflects Realities about People and should be the core metric for measuring the performance of an economy.