The Economy of Wellbeing – a new narrative

Photograph: Rodion Kutsaev


What would life be like if instead of GDP, we measured how many girls ride their bikes to school every day? If politicians, in the face of elections, promised to slow down biodiversity loss and reduce the number of people sleeping on the streets instead of promising economic growth? If the main purpose of the economy was to provide the resources for improving wellbeing? This is what an economy of wellbeing could look like. 


Demos Helsinki, in collaboration with Club of Rome, hosted a webinar on the economy of wellbeing on the 9th of March 2021. Two brilliantly relevant speakers were invited to elaborate on this new, innovative type of economy:

  • Dr. Katherine Trebeck, Wellbeing Economy Alliance
  • Veli-Mikko Niemi, Director General of the Finnish Ministry of Social Affairs and Health


People want change

Let’s step back a bit. Where are we now? Dr. Katherine Trebeck addressed the current economy in her talk, pointing out some of the dynamics. First, we’re in a system where there are diminishing marginal returns to growth – the more you have, the less you benefit from an addition. Someone with a shortage of money will do a lot with 10 euros, but for a millionaire, there’s very little benefit. Second, there are failure demands. These demands are created by the economic system and become a burden for the system, but they could’ve been entirely avoided – for example cleaning after an oil spill. Third, we have pseudo satisfiers. Every human has fundamental needs that need to be met, but sometimes we try and meet these needs with pseudo satisfiers that will not really address the problem – for example seeking a sense of belonging by buying expensive stuff.


People are beginning to realize things need to change. A study conducted before the COVID-19 outbreak showed that a majority of people in developed economies don’t believe they’ll be better off in 5 years. Over half of the people believed that capitalism is creating more harm than good. Last but not least, there is a growing sense of inequity and unfairness. So people want the system to change, but what kind of change should we strive towards? The economy of wellbeing gives us one tempting answer.


An economy of wellbeing

Dr. Trebeck describes a wellbeing economy as social justice on a healthy planet. In an economy of wellbeing, there are five core components on which the economy needs to deliver: connection, participation, nature, fairness, and dignity. For example, a business that works in an economy of wellbeing could meet these needs by having a corporate culture that aligns its purpose with collective values (connection), a business model that creates the means for employees and all other stakeholders to live dignified lives (dignity) and distributes wealth equally (fairness), has values-based relationships with all stakeholders (participation) and regenerates nature instead of harming it (nature). In an economy of wellbeing, GDP is just a tool, one of the means to achieve wellbeing, not the end goal. Our attention shouldn’t be so much on the rate of growth but instead on the direction and composition of it, asking ourselves: what is it that we need to grow and nurture? 


Veli-Mikko Niemi from the Finnish Ministry of Social Affairs and Health brought up more reasons to strive towards an economy of wellbeing. The interlinkage of wellbeing and economic policies is clear. For example, if we put less money into healthcare, in the long run, the costs of this decision will grow greater than the savings that were achieved. Thus, wellbeing and economic policies shouldn’t be dealt with separately, but as one holistic, cross-sectoral whole. Investments in wellbeing are a prerequisite for a socially and ecologically sustainable economy. So, we agree that the economy should account for humans’ wellbeing, but what about the ecological side?


The environment in an economy of wellbeing

Niemi addresses the need for balance between the dimensions of sustainable development: the ecological, social, and economic dimensions. Furthermore, these dimensions are all interconnected. Social, health and environmental crises tend to target the same groups of people. Investments in one component will influence the returns to all other investments. Environmental sustainability will become more difficult to achieve if human wellbeing and social justice are not taken into account — people need to trust that their wellbeing is taken into consideration when planning environmental policies. 


Dr. Trebeck elaborates that the relationship between economy, social justice, and environment is a nested one, not a horizontal one. The economy is nested within the society and the society is nested within the ecological environment. Thus, environmental considerations are inherent to the wellbeing economy as well. 


Towards an economy of wellbeing

Finland is now striving towards an economy of wellbeing. The aim is to prepare a national program by 2023 with the lead of a multisectoral Steering Group. Finland is not alone in this pursuit — the Wellbeing Economy Governments network (WEGo) that Finland joined in 2020 is a leading force in making this happen. Promising examples come from places like Scotland, Wales, and New Zealand. Positive steps are being taken, but such a complex change at multiple levels requires even more.


We need to broaden our imagination, dare to imagine economic systems radically different from our own. We need to support the pioneers in this work — businesses that are working with the values and purpose of the economy of wellbeing, as well as governments that are taking brave steps forward. Most importantly, we need collaboration between different sectors, we need people with multidisciplinary expertise on economics, social justice, and wellbeing as well as the environment. We need to ask difficult questions, questions that have never been asked before, and then work collectively towards finding the answers that will help us create a fair, sustainable, and joyful next era.