Definition
One definition of a well-being economy (WE) consistent with a post-growth, post-consumerist vision comes from the Well-being Economy Alliance (WEAll), a global collaboration of groups and individuals seeking economic system transformation. WEAll (2024) describes a WE as “an economy designed to serve people and the planet, not the other way around. Rather than treating economic growth as an end in and of itself and pursuing it at all costs, a Wellbeing Economy puts our human and planetary needs at the center of its activities …”. For WEAll, a WE delivers on the need for fairness, dignity, purpose, nature, and participation. However, readers should be aware that when they encounter the term, others may use it differently (see Different Perspectives below).
History
Various streams of thought have contributed to the concept of a WE. The New Economics Foundation’s 2004 “Well-Being Manifesto for a Flourishing Society” provided one early call for a WE. The manifesto advocated going beyond gross domestic product (GDP) to “measure what matters” – an idea central to all major variations on the WE today. It also (i) highlighted the limits of further income and consumption growth in improving well-being in affluent nations (see Well-being and Life Satisfaction Versus Income), (ii) critiqued the negative impacts of “materialism” on humans and the environment (see Consumerism), and (iii) proposed giving people more free time as an alternative to ever-increasing consumption (see Work-Life Balance).
In 2012, Bhutan – known for its commitment to Gross National Happiness – hosted a high-level meeting at the United Nations on “Happiness and Well-Being: Defining a New Economic Paradigm”. It subsequently convened an International Expert Working Group (IEWG), leading to a report to the UN calling for a new paradigm centered on seeking happiness within planetary boundaries to replace the “doctrine of limitless growth”. Some IEWG members carried on their work via the Alliance for Sustainability and Prosperity, which contributed to WEAll’s founding in 2018.
In Finland – a prominent WE proponent – the “economy of wellbeing” concept was introduced by health and social affairs NGOs in 2012, emphasizing the importance of all three aspects of sustainability (economic, social, and environmental) in delivering human well-being, but without directly challenging the pursuit of economic growth as a goal.
The WE has made considerable inroads into the political mainstream, notably the creation of the Wellbeing Economy Governments (WEGo) by Iceland, New Zealand, and Scotland in 2018. The following year, the Council of the European Union endorsed an economy of well-being, a concept Finland promoted during its Council presidency. Both Finland and Wales joined WEGo in 2020. Iceland hosted the first annual WE Forum in 2023, leading some to imagine that it could one day rival the World Economic Forum in Davos and its focus on economic growth.
Variations on the concept include the World Health Organization’s Geneva Charter for Wellbeing, which highlighted the “urgency of creating sustainable ‘well-being societies,’” while the World Wellbeing Movement – a coalition of business, civil society, and academic leaders – speaks of a WE as a goal.
Different Perspectives
A WE has emerged as one main alternative to an economy geared toward ever-growing consumption with success measured by GDP. It has the potential to unite supporters of various causes such as addressing the climate and biodiversity crises; tackling inequality, poverty, and social marginalization; enhancing citizen participation; and generating good lives and sustainable consumption patterns based on an ethic of sufficiency. However, as WE understandings vary, efforts are required to ensure that the concept means more than minor reforms to business-as-usual.
The EU Wellbeing Economy Coalition (2023), for example, describes a WE as one “in which everyone can thrive, within planetary boundaries” and “an economic system that is no longer structurally dependent on economic growth”. This understanding of a WE has an affinity with other post-growth concepts such as doughnut economics and ecological economists’ work on “prosperity without growth” (see also Degrowth, Steady-State Economy). Some WE formulations, however, do not directly challenge a growth- and consumption-centered economy.
Some observers celebrate the WE’s capacity to bring post-growth ideas into the mainstream. However, research by Hayden and Dasilva (2022) and Mason and Büchs (2023) have shown that the WE vision that governments and major international organizations have embraced is not – at least so far – the radically transformative, post-growth approach that WEAll and some others have advocated.
The Organisation for Economic Cooperation and Development has been a significant source of mainstream backing for a WE. It emphasizes “a ‘virtuous circle’ in which individual well-being and long-term economic growth are mutually reinforcing”. This idea has also been voiced by Finland and the Council of the European Union; it is a WE understanding with much in common with by-now conventional ideas of “sustainable and inclusive” growth.
Application
Hayden and Dasilva (2022) characterize the practice of WEGo nations as a “weak post-growth” approach. These nations all remain committed to economic growth either as a goal in itself or as a means to achieve well-being. Indeed, they still depend on growth for purposes such as generating revenue for well-being-enhancing social spending. Yet WEGos have taken small steps in line with post-growth thinking, including some downplaying of economic growth as the overarching societal objective, moving beyond GDP alone toward more comprehensive economic and social performance indicators, and starting to orient policy toward achieving well-being. Examples of the latter include New Zealand’s “wellbeing budgets” and Iceland’s well-being priorities to guide budget allocations. WEGo nations have also introduced some sufficiency-oriented policies that limit particularly damaging forms of consumption and encourage alternatives, with notable examples in Wales (see Box 42.1).
Box 42.1. Practice insight: well-being economy in Wales
Wales has arguably gone the furthest in pursuing a WE in a way that creates possibilities for transformative change. Its Wellbeing of Future Generations Act of 2015 established seven national well-being goals that emerged from a national conversation on the “Wales We Want”: a prosperous, resilient, healthier, and more equal Wales, a Wales of cohesive communities, a Wales of vibrant culture and thriving Welsh language, and a globally responsible Wales. The Act requires public bodies to act in ways that are long-term, integrative, collaborative, preventative, and involve citizens in decision-making. It also requires the government to introduce national indicators to measure progress toward the well-being goals and “national milestones” to assess that progress. Importantly, the Act created the office of the Future Generations Commissioner to protect the interests of future generations and monitor the Act’s implementation.
The Future Generations Commissioner has played a key role in curbing the growth of the country’s road network and encouraging more sustainable mobility. The first step involved stopping a planned 13-mile-long relief road through environmentally sensitive wetlands to relieve motorway congestion at a cost exceeding £1.4 billion. The Commissioner, Sophie Howe, told the government it should spend its money differently as the plan was not in line with the Future Generations Act. In addition to scrapping the relief road, the government introduced a “new path” transport policy that prioritizes reducing the need to travel and shifting to more sustainable transport modes such as active travel and public transit. In February 2023, Wales took the groundbreaking step of canceling all major road-building projects, with strict criteria for any new construction.
Other sufficiency-oriented policies in Wales include establishing a default 20-mile-per-hour urban speed limit, discouraging second-home ownership, and encouraging re-use, repair, and sharing of goods (see Repair and Sharing Economy). While the Welsh government still pursues economic growth, a less growth- and consumption-centered vision of prosperity is evident – supported by an understanding of well-being that highlights the needs of future generations.
One noteworthy element of a WE is a preventative approach that aims to avoid social and environmental problems rather than paying large sums to fix them later. For example, in healthcare, the emphasis shifts toward social and environmental determinants of health – and to factors such as a healthier work-life balance, less environmental pollution, and lower inequality that can help reduce the need for costly healthcare services and pharmaceuticals.
Reducing inequality is a key element of a WE. Evidence shows that countries with lower inequality and strong welfare states have better well-being outcomes on various indicators (see Carbon Inequality). Meanwhile, if well-being rather than economic growth is the ultimate goal, it strengthens the case for actions that can boost well-being in less consumption-intensive ways, such as work-time reduction, limits on advertising (which generates dissatisfaction with what we already have to get us to buy more), or creating sites where people can share and repair goods and strengthen community ties at the same time.
Alongside such possibilities, a danger exists of watering down the WE concept, allowing governments and other actors to co-opt it without significant change. Some WE advocates, such as Black (2023), warn of “wellbeing washing” – using well-being language without truly transforming policies and practices – while others propose criteria to distinguish a “genuine” WE from “window dressing”. Much work remains to shape what is done in the name of a WE.
For a post-growth, post-consumerist WE to prevail, some major obstacles must be overcome. These include the predominance of conventional economic thinking and training, opposition from vested interests, and ultimately the growth dependency of contemporary societies (which requires substantial economic transformation). Some positive initial steps have nevertheless already been taken toward a WE that can generate good lives in a sustainable and equitable way.
Further Reading
Black, I. (2023). Wellwashing: Why a superficial approach to wellbeing economics will fail. Glasgow: Common Weal. Available at: https://commonweal.scot/wp-content/uploads/2023/10/Wellwashing.pdf (accessed: 5 February 2024).
EU Wellbeing Economy Coalition. (2023). Discussion paper on EU wellbeing economy, p. 8. EU Wellbeing Economy Coalition. Available at: https://ieep.eu/wp-content/uploads/2023/06/Discussion-Paper-on-EU-Wellbeing-Economy.pdf (accessed: 9 December 2023).
Hayden, A., & Dasilva, C. (2022). The wellbeing economy: Possibilities and limits in bringing sufficiency from the margins into the mainstream. Frontiers in Sustainability, 3. https://doi.org/10.3389/frsus.2022.966876.
Mason, N., & Büchs, M. (2023). Barriers to adopting wellbeing-economy narratives: Comparing the Wellbeing Economy Alliance and Wellbeing Economy Governments. Sustainability: Science, Practice and Policy, 19(1), 2222624. https://doi.org/10.1080/15487733.2023.2222624.
WEAll. (2024). What is a wellbeing economy. Wellbeing Economy Alliance. Available at: http://weall.org/what-is-wellbeing-economy (accessed: 14 January 2024).