Rethinking financial prosperity

Update (7.27.11)

Nice broadside from Vinay Gupta regarding Umair Haque’s larger project.

What is Wealth?

I take it one of the philosophical consequences of the housing bubble, the economic downturn, and the debt crisis has been to compel us to rethink our conception of prosperity. “What is wealth? What does it mean for a nation or an individual to be prosperous?”

Over at HBR Blog, Umair Haque has been making the case that our measurements of wealth are out of whack. In his view, traditional metrics like job growth and GDP do not accurately depict the flourishing of an economy or the lack thereof. Rather, questions of a well-lived life ought to be front and center. So he writes,

Consider it a tiny, imprecise exercise in what I call “eudaimonics” — the art and science of rebuilding a prosperity that matters in human terms: the pursuit not merely of mass-made, lowest-common-McDenominator, faux-designer opulence, but of lives meaningfully well lived. If we conceive of “debt” not merely as an accounting device meaningless in human terms, a financial fiction owed to nominal creditors — but as a real economic burden owed to the eudaimonic promise of a meaningfully good life, then our economy isn’t just underperforming: it’s dysfunctional.

And might our way of life be to blame? Haque again:

The plain truth might be that we’re living beyond our means because our way of life atrophied our means. And it may be that way we live, work, and play requires deep transformation — if we’re to upgrade our means to live, work, and play better tomorrow.

A General Remark on Social Business

HBR seems to be posting a lot of stuff on the emerging interest in social business. Social businesses are not primarily interested in bottom lines or stakeholder returns but in social utility, meaningful work, and the like. Financial sustainability, we might say, is only one aspect of a larger concern with the sustainability of the entire enterprise.

Further Reading: Haque’s Work

Umair Haque, “Is a Well-Lived Life Worth Anything?”

—. “The Opulence Bubble.”

—. “America’s Deeper Debt Crisis.”

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