"Gross National Happiness is more important than Gross Domestic Product." - Jigme Singye Wangchuck, 4th King of Bhutan

An Enlightened Society is a Prosperous Society
Bhutan, called "Druk Yul" by its residents (a Dzongka phrase meaning Land of the Thunder Dragon), is a predominantly Buddhist country in South Asia. While most of the world relies on economic factors for measuring growth and prosperity, Bhutan has forged a new path by basing growth on national happiness. Bhutan's Gross National Happiness Index measures the overall well being, security and happiness of its residents.

IN PICTURES: Learn To Invest In 10 Steps

Following years of discussion, in 2008, coinciding with the coronation of the 5th King of Bhutan, His Majesty Jigme Khesar Namgyel Wangchuck, the Royal Government of Bhutan, adopted the Gross National Happiness (GNH) Index. The purpose of the GNH Index is to reflect GNH values, set benchmarks and track policies and performances for the country.

King Khesar has stated that the ultimate goal for social, economic and political change in Bhutan is the fulfillment of the GNH, and that a GNH society means the creation of an enlightened society in which happiness and well-being of all people and sentient beings is the ultimate purpose of governance. Happiness of the people was made the guiding goal of development. (Find out how Milton Friedman's monetarist theory helped bring the U.S. out of the economic doldrums, in Stagflation, 1970s Style.)

Money Can't Buy Happiness
The Bhutanese believe that traditional measurements of growth, such as Gross Domestic Product (GDP), are based on rapid material consumption, and are heavily biased towards increased production and use, regardless of the need or desirability of such outputs. They are, therefore, biased against conservation, community cohesion and environmental and cultural preservation.

The GNH Index is calculated using a series of GNH indicators that can be measured as having a positive or negative influence on well-being and happiness. For example, less crime, illness and air pollution have a more positive influence on happiness than more crime, illness and pollution. The GNH metrics include both objective and subjective dimensions of life. An example is crime: Crime statistics provide objective data, whereas a person's perception of their own safety and security supply subjective information.

A Collective Goal
Indeed as a culture, the Bhutanese strive to find inner sources of happiness, rather than relying on superficially derived pleasure, such as materialism and external stimulation. Pleasurable feelings come from shutting down sensory inputs, and the related mental chatter. They believe that meditation may lead the brain's neural pathways to be changed so that calmness and contentment can become a personality trait. In other words, the brain can be trained to be happy.

GNH and the Bhutanese culture encourage individuals to see the interdependence of all things: that all aspects of life depend on fostering healthy relationships, whether it is between the people and the government, or a farmer and his land. In order to achieve collective happiness, the ideals of interdependence need to be sought by everyone. A GNH society seeks to elevate its vision beyond individual self interest to concentrate on the happiness of all – as a collective goal. The government of Bhutan incorporates all aspects of the GNH into public policies and plans with the goal of achieving an enlightened, happy society.

Calculating the Index
The GNH Index is based on the results of survey questionnaires given to randomly selected residents from different districts in Bhutan, including remote, semi-urban and urban areas. The questionnaire covers key areas affecting the values and principles of GNH divided into the following domains:

  • Psychological Well-Being
  • Time Use
  • Community Vitality
  • Culture
  • Health
  • Education
  • Environmental Diversity
  • Living Standard
  • Governance

Happiness occurs when there are sufficient achievements in each of these nine dimensions.

The Gross National Happiness Index is used to reflect the happiness and general well-being of the Bhutanese population more accurately and profoundly than they believe a monetary measure would provide. The Index provides information to the Bhutanese people and the rest of the world about the current levels of human fulfillment in Bhutan.

How Would You Fare?
In a world where prosperity and growth are often measured in economic terms and keeping up with the Joneses, Bhutan stands alone in gauging these factors on happiness. If your prosperity were measured in terms of happiness, rather than in net worth, how would you fare? How would your government's policy change if happiness were the driving force? These are not easy questions to answer, but Bhutan is pioneering this concept through its Gross National Happiness Index.

Still feeling uninformed? Check out last week's Water Cooler Finance to see what's been happening in financial news.

Related Articles
  1. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  2. Personal Finance

    How Tech Can Help with 3 Behavioral Finance Biases

    Even if you’re a finance or statistics expert, you’re not immune to common decision-making mistakes that can negatively impact your finances.
  3. Insurance

    What's The Difference Between Medicare And Medicaid?

    One program is for the poor; the other is for the elderly. Learn which is which.
  4. Investing Basics

    5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  5. Entrepreneurship

    Identifying And Managing Business Risks

    There are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them.
  6. Forex Education

    Explaining Uncovered Interest Rate Parity

    Uncovered interest rate parity is when the difference in interest rates between two nations is equal to the expected change in exchange rates.
  7. Fundamental Analysis

    Using Decision Trees In Finance

    A decision tree provides a comprehensive framework to review the alternative scenarios and consequences a decision may lead to.
  8. Economics

    Understanding Tragedy of the Commons

    The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource.
  9. Investing

    What’s the Difference Between Duration & Maturity?

    We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
  10. Taxes

    10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.
  1. Are Flexible Spending Account (FSA) contributions tax deductible?

    The contributions you make to your Flexible Spending Account (FSA) are not tax-deductible because the accounts are funded ... Read Full Answer >>
  2. Does a Flexible Spending Account (FSA) cover Lasik?

    Flexible spending accounts (FSA) can be used to pay for qualifying LASIK procedures. LASIK is not the only laser eye surgery ... Read Full Answer >>
  3. Are Flexible Spending Account (FSA) expenses tax deductible?

    Flexible Spending Account (FSA) expenses are not tax deductible. The U.S. Internal Revenue Service (IRS) states you cannot ... Read Full Answer >>
  4. Does a Flexible Spending Account (FSA) cover acupuncture?

    A Flexible Spending Account (FSA) covers acupuncture. The Internal Revenue Service (IRS) has defined acupuncture as a qualifying ... Read Full Answer >>
  5. Do Flexible Spending Accounts (FSAs) expire?

    Flexible Spending Accounts (FSAs) do expire and are considered to be a "use it or lose it" type of plan. They are savings ... Read Full Answer >>
  6. Do flexible spending accounts (FSA) funds roll over?

    An individual can utilize an employer’s cafeteria plan of employee benefits to establish a flexible spending account (FSA). ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center