From Business Basics to the Basics of Well-being(Final Edit)

8/13/2019 From Business Basics to the Basics of Well-being(Final Edit)

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PATH 1

Business Basics

TEP 1 NEEDS AND WANTS

Brainstorming : Wants and needs (a game)Basic Economics Part 1

Definition of wants and needs, definition at EconomicGlossaryWants vs. Needs - Distinguishing Between Wants and Needs

EP 2 SUPPLY, DEMAND AND PRICES

Law Of Supply And Demand Definition

EP 3 TYPES OF ECONOMIC SYSTEMS

Types of Economic Systems

EP 4 GDP AND WELFARE

Gross Domestic Product (GDP) Definition | Investopediainvestopedia.com

GDP Definition - What Is the Gross Domestic Product

useconomy.about.comWelfare state - Wikipedia, the free encyclopedia

STEP 5 - CRITICISM OF GDP & THE GNH

What GDP does not revealCriticisms of the GDPA forerunner of the GNH - R.Kennedy's speechComprehension questionsAbout GNH - gnhbhutan.orgThe background of Gross National Happiness


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STEP 1 NEEDS AND WANTS

Want vs. Need: A GAME (our starting point)

We told our students that they would receive a phone call from the Head of State. Thecontent of the call : as on this planet there are little resources left, the government has decided to

send groups of students onto another planet and experiment survival in another world .You are one of the groups chosen.On the destination planet the atmosphere is good, the air breathable, there is gravity,and there are no aliens to worry about. There are some problems though:

1. students wont have much time to pack their baggage;2. there is limited room on the space shift for their belongings;3. students must choose objects to take with them from the list below.


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re items in common with the authors list would win.

THE WINNER was GROUP 4


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ants vs. Needs: Basic Economics Part 1

cialstudiesforkids.com

t 1: Basic Wants and Needs

e of the most basic concepts of economics is want vs. need. Whthey exactly? A need is something you have to have, somethingu can't do without. A good example is food. If you don't eat,u won't survive for long. Many people have gone days withouting, but they eventually ate a lot of food. You might not need

whole lot of food, but you do need to eat. A want is somethingu would like to have. It is not absolutely necessary, but ituld be a good thing to have. A good example is music. Now, some

ople might argue that music is a need because they think they

n't do without it. But you don't need music to survive. You doed to eat. These are general categories, of course. Someegories have both needs and wants. For instance, food could beeed or a want, depending on the type of food. You need to eattein, vitamins, and minerals. How you get them is up to youd your family). You can eat meat, nuts, or soy products to gettein. You can get fruits and vegetables to get vitamins and

nerals. You can eat yogurt or cheese to get other vitamins andnerals. You can eat bread to get still more vitamins and

nerals. These basic kinds of foods are needs . Ice cream is ant. You don't really need to eat ice cream to survive. You canit to get some vitamins and minerals, but other foods like

eese and yogurt give you more of those same vitamins andnerals without giving you the fat that ice cream does. Still,cream tastes good to many people. They like to eat it. They

nt it, but they don't need it. They like it, but they don't havehave it to survive. OK, we've covered food. What other kinds ofngs does your body need to survive?

ps://reader010.{domain}/reader010/html5/0620/5b2a7a77c1b33/5b2a7a7d5db32.jpg

Definition of wants and needs,efinition at Economic Glossary
http://www.socialstudiesforkids.com/graphics/goodfood.jpg


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ssary.econguru.com

m wants and needs Definition : These are the unfulfilled desirest motivate human behavior and that when satisfied improve humanll-being. They include both physiological or biologicaluirements for maintaining life ( needs ) and the psychologicalires which make life more enjoyable ( wants ). However, when push

mes to shove, and the nitty gets down to the gritty, it mattersy little to markets if people need goods or want goods, so longthey are motivated to buy the goods to satisfy wants and needs.

ants vs. Needs - Distinguishing Between Wants and Needs

galliving.about.comed

omething you have to haventmething you would like to have

The difference between a need and a want is pretty simple -- until you set yourself loose in are. Double chocolate chip ice cream? It's a food, so mark it as a need. That designer t-shirt that fitsu perfectly? Well, you need more shirts, so why shouldnt it count too?

Tally up the damage caused by a few justifications like these, and suddenly you've spent far re than you intended.

What's the solution?A better understanding of what a need really is.

eedsIn actuality, you only need four things to survive:

A roof over your head

Enough food and water to maintain your healthBasic health care and hygiene productsClothing (just what you need to remain comfortable and appropriately dressed)

Everything that goes beyond this a big house, name-brand clothes, fancy foods and drinks, aw car is a want.


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Does that mean that you should only buy the things that you need? Not at all. Life is meant to beed, not survived. Treat yourself to some wants along the way, but do so when you can afford to,d enjoy those wants as the extras that they are.


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aw Of Supply And Demand Definition | Investopedia

estopedia.comheory explaining the interaction between the supply of aource and the demand for that resource. The law of supply andmand defines the effect that the availability of a particularduct and the desire (or demand) for that product has on price.nerally, if there is a low supply and a high demand, the pricel be high.

contrast, the greater the supply and the lower the demand, thewer the price will be.


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ypes of Economic Systems

moop.com

p://media1.shmoop.com/images/homepage/badge-groupRates.png

ou can't always get what you want." That's what the Rollingnes sang, anyway (check it out: great song even if it's a bitore your time). And while Mick Jagger probably didn't have Econ

1 in mind, he managed to sum up perfectly the core conceptderlying all economics.

arcity is the fundamental challenge confronting all individualsd nations. We all face limitations... so we all have to makeoices. We can't always get what we want. How we deal with these

mitationsthat is, how we prioritize and allocate our limitedome, time, and resourcesis the basic economic challenge that confronted individuals and nations throughout history.

t not every nation has addressed this challenge in the same way.cieties have developed different broad economic approaches tonage their resources. Economists generally recognize four basices of economic system:

traditional

commandmarketmixed

they dont completely agree on the question of which systemt addresses the challenge of scarcity.

traditional economic system ishere's a shockershaped bydition. The work that people do, the goods and services theyvide, how they use and exchange resources all tend to follow

g-established patterns. These economic systems are not verynamicthings dont change very much. Standards of living are
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tic; individuals dont enjoy much financial or occupationalbility. But economic behaviors and relationships aredictable. You know what you are supposed to do, who you tradeh, and what to expect from others.

many traditional economies, community interests take precedenceer the individual. Individuals may be expected to combine theirorts and share equally in the proceeds of their labor. In otherditional economies, some sort of private property is respected,it is restrained by a strong set of obligations that

ividuals owe to their community.

day you can find traditional economic systems at work amongstralian aborigines and some isolated tribes in the Amazon. Inpast, they could be found everywherein the feudal agrarianages of medieval Europe, for example.

In a command economic system ornned economy , the government controls the economy. The statecides how to use and distribute resources. The governmentulates prices and wages; it may even determine what sorts ofrk individuals do. Socialism is a type of command economictem. Historically, the government has assumed varying degreescontrol over the economy in socialist countries. In some, onlyjor industries have been subjected to government management; iners, the government has exercised far more extensive control

er the economy.

e classic (failed) example of a command economy was themmunist Soviet Union. The collapse of the communist bloc in thee 1980s led to the demise of many command economies around therld; Cuba continues to hold on to its planned economy evenay.

market economies , economic decisions are made by individuals.

e unfettered interaction of individuals and companies in therketplace determines how resources are allocated and goods are


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ut if you go carrying pictures of chairman Mao, you ain't goingmake it with anyone anyhow

moop.com


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TEP 4 - GDP AND WELFARE

finitions

The to t al value of goods p roduced and servi ces provided in a

country during one year.The val u e of a co untry's ove rall out put of goods and services(typica lly d urin g one fiscal year ) at market prices excludingnet income from abroad .The total market value of all final goods and servicesproduced in a country in a given year, equal to totalconsumer , investment and government spending, plus the vaof exports , minus the value of imports .GDP measures the monetary value of final goods and services that is, those that are bought by the final userproduced in acountry in a given period of time (say a quarter or a year). Itcounts all of the output generated within the borders of acountry. GDP is composed of goods and services produced forsale in the market and also includes some nonmarket production,such as defense or education services provided by thegovernment.The monetary value of all the finished goods and servicesproduced within a country's borders in a specific time period,

though GDP is usually calculated on an annual basis. Itincludes all of private and public consumption, governmentoutlays, investments and exports less imports that occur withina defined territory.

GDP = C + G + I + NX

where:

" C" is equal to all private consumption, or consumer spending,in a nation's economy
http://www.investorwords.com/1055/consumer.htmlhttp://www.investorwords.com/1055/consumer.htmlhttp://www.investorwords.com/2599/investment.htmlhttp://www.investorwords.com/16458/government.htmlhttp://www.investorwords.com/5209/value.htmlhttp://www.investorwords.com/11320/total.htmlhttp://www.investorwords.com/11320/total.htmlhttp://www.investorwords.com/2994/market_value.htmlhttp://www.investorwords.com/2994/market_value.htmlhttp://www.investorwords.com/2994/market_value.htmlhttp://www.investorwords.com/9693/final.htmlhttp://www.investorwords.com/2209/goods.htmlhttp://www.investorwords.com/6664/service.htmlhttp://www.investorwords.com/6664/service.htmlhttp://www.businessdictionary.com/definition/net-income.htmlhttp://www.businessdictionary.com/definition/abroad.htmlhttp://www.businessdictionary.com/definition/fiscal-year.htmlhttp://www.businessdictionary.com/definition/fiscal-year.htmlhttp://www.investorwords.com/17632/imports.htmlhttp://www.investorwords.com/17578/exports.htmlhttp://www.investorwords.com/5209/value.htmlhttp://www.investorwords.com/16458/government.htmlhttp://www.investorwords.com/2599/investment.htmlhttp://www.investorwords.com/1055/consumer.htmlhttp://www.investorwords.com/6664/service.htmlhttp://www.investorwords.com/2209/goods.htmlhttp://www.investorwords.com/9693/final.htmlhttp://www.investorwords.com/2994/market_value.htmlhttp://www.investorwords.com/11320/total.htmlhttp://www.businessdictionary.com/definition/abroad.htmlhttp://www.businessdictionary.com/definition/net-income.htmlhttp://www.businessdictionary.com/definition/market-price.htmlhttp://www.businessdictionary.com/definition/fiscal-year.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/output.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.businessdictionary.com/definition/value.html


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" G" is the sum of government spending" I " is the sum of all the country's businesses spending oncapital" NX " is the nation's total net exports, calculated as totalexports minus total imports. (NX = Exports - Imports)investopedia.com

DP Definition - What Is the Gross Domestic Product

OM: useconomy.about.com

hat is gdp? The best way to understand a country's economy is byking at its Gross Domestic Product (GDP). This economicicator measures the country's total output. This includes

erything produced by all the people and all the companies in theuntry. To get everything produced by a country's citizens, notter where they are in the world, you should look at Grosstional Product (GNP), also called Gross National Income (GNI).e components of GDP are: Personal Consumption Expenditures plussiness Investment plus Government Spending plus (Exports minusports). Now that you know what the components are, it's easy toculate GDP using the standard formula: C + I + G + (X-M).

ominal GDP:

2012, U.S. GDP was $16.224 trillion. This is known asminal GDP, which is the raw measurement that leavesce increases in the estimate. GDP is measured arterly by the Bureau of Economic Analysis (BEA).

owever, the BEA revises that quarterly estimate eachonth as it receives updated data.GDP per Capita:

you want to compare GDP between countries, keep in mind some

untries have a large economic output because they have so manyople. To get a more accurate picture, it's helpful to use GDPcapita. This divide GDP by the number of people, and shows the

l productivity of the population.

al GDP:

compare GDP from one year to another, it's important to takethe effects of inflation. To do this, the BEA calculates real

DP. It does this by using a price deflator, which tells you howch prices have changed since a base year. Real GDP is gotten by


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ltiplying the deflator by the nominal GDP. The BEA provides realDP using 2005 as the base year in Table 1.1.6 Real GDP. It is,refore, lower than nominal GDP. To calculate real GDP, the BEAkes three important distinctions: Income from U.S. companies and

ople from outside the country are not included, so the impact ofchange rates and trade policies don't muddy up the number.

e effects of inflation are taken out.

ly the final product is counted, so that if someone in the U.S.kes shoelaces, and it is used to make shoes in the U.S., onlyvalue of the shoe gets counted.

al GDP per Capita:

u've probably already guessed that the best way to compare GDPyear and to other countries is with real GDP per capita. Thises out the effect of inflation, exchange rates and differencespopulation.

fact, if you look at U.S. GDP History, you'll see that real GDPcapita has increased 180% since 1960 ($17,747 to $49,800).

at sounds great until you realize that nominal GDP for theuntry has risen 2,992% ($543.3 billion to $16.245 trillion) int same time period. That's the effect of inflation andpulation growth.

DP Growth Rate:e GDP growth rate is the percent increase in GDP from quarter toarter. It tells you exactly how fast a country's economy iswing. Most countries use real GDP to remove the effect oflation. In the U.S., the BEA calculates the growth rate. Formost recent quarterly report, see Current GDP Statistics. Read

S. GDP Growth to see the forecast of this important economicicator, and to compare it each year since 1929 with the

siness cycle phase.at GDP Tells You About the Economy:

minal GDP tells you the absolute output of any country. Real GDPows you to compare countries. The U.S. recently regained itssition as the world's largest economy. In comparing the economytwo different countries, you've got to take out the effects oflation and exchange rates. The best way to do this is to userchasing power parity. The GDP growth rate measures if theonomy is growing more quickly or more slowly than the quarter


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ore. If it produces less than the quarter before, it contractsd the GDP growth rate is negative. This signals a recession. Iftays negative long enough, the recession turns into apression. As bad as a recession is, you also don't want the GDPwth rate to be too high. Then you'll get inflation. The ideal

DP growth rate is between 2-3%.

ow GDP Affects You:

vestors look at the GDP growth rate to see if the economy isanging rapidly so they can adjust their asset allocation. Indition, investors compare country GDP growth rates to decideere the best opportunities are. Most investors like to purchase

ares of companies that are in rapidly growing companies. Thederal Reserve uses the GDP growth rate to decide whether toplement expansionary monetary policy to ward off recession orntractionary monetary policy to prevent inflation. (For more,

The Federal Funds Rate and How It Works).

t's say the GDP growth rate is speeding up, and the Fed raiseserest rates to stem inflation. In this case, you would want tok in a fixed-rate mortgage, because you know that anustable-rate mortgage will start charging higher rates next

ar. If GDP is slowing down, or is negative, then you should dustyour resume. Declining GDP usually leads to layoffs and

employment, but it can take several months. Declining GDP meanssiness revenues are down. It can take awhile before executivesn put together a layoff list and package. If you follow GDPtistics, you can be better prepared.

ore About GDP:

u could also use the GDP report from the BEA to look at whichtors of the economy are growing and which are declining. Thisuld help you determine whether you should invest in, say, a

h-specific mutual fund vs a fund that focuses on agribusiness.an also help you find training in sectors that are growing.en during the 2008 financial crisis, health care relatedustries continued to add jobs. (Article updated August 10,3)

oss Domestic Product (GDP) can be estimated in three ways which,theory , should yield
http://www.businessdictionary.com/definition/yield.htmlhttp://www.businessdictionary.com/definition/theory.htmlhttp://www.businessdictionary.com/definition/estimate.htmlhttp://www.businessdictionary.com/definition/domestic.html


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ntical figures . . They are

Expenditure basis: how much money was spent;Output basis: how many goods and services were sold:

Income basis: how much income ( profit ) was earned

hese estimates, published quarterly , are constantly revised toproach greater accuracy

Real GDP

One thing people want to know about an economy is whether its total output of goodsand services is growing or shrinking. But because GDP is collected at current, ornominal, prices, one cannot compare two periods without making adjustments forinflation

o determine real GDP, its nominal value must be adjusted toe into account price changes to allow us to see whether theue of output has gone up because more is being produced or

mply because prices have increased. A statistical tool calledprice deflator is used to adjust GDP from nominal to constant

ces.

P is important because it gives information about the size of the economy and how annomy is performing. The growth rate of real GDP is often used as an indicator of theeral health of the economy. In broad terms, an increase in real GDP is interpreted asgn that the economy is doing well. When real GDP is growing strongly, employment

kely to be increasing as companies hire more workers for their factories and peoplee more money in their pockets. When GDP is shrinking, as it did in many countriesng the recent global economic crisis, employment often declines. In some cases, GDP be growing, but not fast enough to create a sufficient number of jobs for those

king them. But real GDP growth does move in cycles over time. Economies are sometimeseriods of boom, and sometimes in periods of slow growth or even recession

h the latter often defined as two consecutive quarters during which output declines).he United States, for example, there were six recessions of varying length anderity between 1950 and 2011. The National Bureau of Economic Research makes the call

he dates of U.S. business cycles.
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elfare state

OM: Wikipedia, the free encyclopedia

of GDP in social expenditures in OECD states, 2001.

welfare state is a concept of government in which the stateys a key role in the protection and promotion of the economic

d social well-being of its citizens. It is based on thenciples of equality of opportunity, equitable distribution of

alth, and public responsibility for those unable to availmselves of the minimal provisions for a good life. The generalm may cover a variety of forms of economic and socialanization." [1] The sociologist T.H. Marshall identified thelfare state as a distinctive combination of democracy, welfare,d capitalism. Scholars have paid special attention to thetoric paths by which Germany, Britain and other countriesveloped their welfare state.

odern welfare states include the Nordic countries, such asland, Sweden, Norway, Denmark, and Finland [2] which employ atem known as the Nordic model. The welfare state involves ansfer of funds from the state, to the services provided (i.e.althcare, education) as well as directly to individualsenefits"). Esping-Andersen classified the most developedlfare state systems into three categories; Social Democratic,nservative, and Liberal. [3]

e welfare state is funded through redistributionist taxation andoften referred to as a type of "mixed economy". [4] Such taxationually includes a larger income tax for people with higheromes, called a progressive tax. This helps to reduce the income

p between the rich and poor. [5][6][7]

ymology

e German term Sozialstaat ("social state") has been used since

70 to describe state support programs devised by Germanialpolitiker ("social politicians") and implemented as part of


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marck's conservative reforms. [8] The literal English equivalentcial state" didn't catch on in Anglophone countries [9] until the

cond World War, when Anglican Archbishop William Temple, authorthe book Christianity and the Social Order (1942), popularizedconcept using the phrase "welfare state." [10] Bishop Temple's of "welfare state" has been connected to Benjamin Disraeli's

45 novel Sybil: or the Two Nations (i.e., the rich and theor), which speaks of "the only duty of power, the social welfarethe PEOPLE.'" [11] At the time he wrote Sybil , Disraeli, laterme Minister, belonged to Young England, a conservative group ofuthful Tories who were appalled by what they saw as the Whigifference to the horrendous conditions of the industrial poor

d attempted to kindle among the privileged classes a sense ofponsibility toward the less fortunate and a recognition of thenity of labor that they imagined had characterized England

ring the Feudal Middle Ages. [12]

e Italian term stato sociale ("social state") reproduces therman term. The Swedish welfare state is called Folkhemmet rally, "folk home", and goes back to the 1936 compromiseween Swedish trade unions and large corporations. Sweden'sxed economy is based on strong unions, a robustly funded systemsocial security, and universal health care. In Germany, them Wohlfahrtsstaat , a direct translation of the English "welfarete", is used to describe Sweden's social insuranceangements. Spanish and many other languages employ an analogous

m: estado del bienestar literally, "state of well-being". Inrtuguese, two similar phrases exist: estado do bem-estar socialich means "state of social well-being", and estado de

ovidncia "providing state", denoting the state's mission toure the basic well-being of the citizenry. In Brazil, the

ncept is referred to as previdncia social , or "socialvidence".

dern model

odern welfare programs differed from previous schemes of povertyef due to their relatively universal coverage. The developmentsocial insurance in Germany under Bismarck was particularlyluential. Some schemes were based largely in the development ofonomous, mutualist provision of benefits. Others were foundedstate provision. The term was not, however, applied to alltes offering social protection. The sociologist T.H. Marshallntified the welfare state as a distinctive combination of

mocracy, welfare and capitalism. Examples of early welfaretes in the modern world are Germany, all of the Nordic


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untries, the Netherlands, Uruguay and New Zealand and the Unitedngdom in the 1930s.

anged attitudes in reaction to the Great Depression weretrumental in the move to the welfare state in many countries, abinger of new times where "cradle-to-grave" services became ality after the poverty of the Depression . During the Greatpression, it was seen as an alternative "middle way" between

mmunism and capitalism.[13]

In the period following the World Warmany countries in Europe moved from partial or selectivevision of social services to relatively comprehensive coveragethe population.

e activities of present-day welfare states extend to thevision of both cash welfare benefits (such as old-age pensionsunemployment benefits) and in-kind welfare services (such asalth or childcare services). Through these provisions, welfare

tes can affect the distribution of wellbeing and personalonomy among their citizens, as well as influencing how theirzens consume and how they spend their time. [14][15]

eat Britain

ain article: Welfare state in the United Kingdom The modernlfare state in Great Britain started to emerge with the Liberallfare reforms of 19061914 under Liberal Prime Minister Herbert

quith.[22]

These included the passing of the Old-Age Pensions Act1908, the introduction of free school meals in 1909, the 1909bour Exchanges Act, the Development Act 1909, which heraldedater Government intervention in economic development, and the

acting of the National Insurance Act 1911 setting up a nationalurance contribution for unemployment and health benefits fromrk. [23][24]

December 1942 , the Report of the Inter-Departmental CommitteeSocial Insurance and Allied Services was published, knownmmonly as the Beveridge Report after its chairman, Sir Williamveridge, proposing a series of measures to aid those who were ined of help, or in poverty. Beveridge recommended to thevernment that they should find ways of tackling the five giantsng Want, Disease, Ignorance, Squalor and Idleness. He argued toe these problems, the government should provide adequate incomepeople, adequate health care, adequate education, adequateusing and adequate employment. It proposed that 'All people ofrking age should pay a weekly National Insurance contribution.return, benefits would be paid to people who were sick,


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employed, retired or widowed.'

e basic assumptions of the report were that the National Healthrvice would provide free health care to all citizens. Theiversal Child Benefit was a scheme to give benefits to parents,

couraging people to have children by enabling them to feed andpport a family. One theme of the report was the relativeeapness of universal benefits. Beveridge quoted miners' pensionhemes as some of the most efficient available, and argued that ate scheme would be cheaper to run than individual friendlycieties and private insurance schemes, as well as being cheapern means-tested government-run schemes for the poor.

e report's recommendations were adopted by the Liberal Party,nservative Party and then by the Labour Party. [25] Following thebour election victory in the 1945 general election many ofveridge's reforms were implemented through a series of Acts ofliament . On 5 July 1948, the National Insurance Act, Nationalsistance Act and National Health Service Act came into force,ming the key planks of the modern UK welfare state. Theeapness of what was to be called National Insurance was anument alongside fairness, and justified a scheme in which theh paid in and the state paid out to the rich, just as for theor. In the original scheme, only some benefits called Nationalsistance were to be paid regardless of contribution. Universalnefits paid to both the rich and the poor, such as Universalild Benefit, were particularly beneficial after the Second World

ar, when the birth rate was low. Universal Child Benefit may haveped drive the baby boom.

fore 1939, most health care had to be paid for through nonvernment organisations through a vast network of friendlycieties, trade unions and other insurance companies whichunted the vast majority of the UK working population as members.ese friendly societies provided insurance for sickness,employment and invalidity, therefore providing people with an

ome when they were unable to work. Following the implementationBeveridge's recommendations, institutions run by local councilsprovide health services for the uninsured poor, part of theor law tradition of workhouses, were merged into the newional system. As part of the reforms, the Church of Englando closed down its voluntary relief networks and passed thenership of thousands of church schools, hospitals and otherdies to the state. [26]

lfare systems continued to develop over the following decades.the end of the 20th century parts of the welfare system had


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en restructured, with some provision channelled through non-vernmental organizations which became important providers ofcial services. [27]

nited States

hough the United States was to lag far behind Germany andtain, it did develop a welfare state in the 1930s. [28] However,

earliest and most comprehensive philosophical justificationthe welfare state was produced by an American, the sociologistster Frank Ward (18411913), whom the historian Henry Steelemmager called "the father of the modern welfare state".ernalistic reforms, such as those associated with Bismarck, had

en strongly opposed by Herbert Spencer and his Americanciples, whose laissez-faire theories were quickly adopted by

merican businessmen. Spencer argued that coddling the poor andfit would only encourage them to reproduce, obstructing the

entific progress of the human race.ntral to Ward's theories was his belief that a universal andmprehensive system of education was necessary if a democraticvernment was to function successfully. His writings profoundlyluenced younger generations of progressive thinkers such aseodore Roosevelt, Thomas Dewey, and Frances Perkins, amongers. [31]

e United States would be the only industrialized country thatnt into the Great Depression with no social insurance policiesplace. It was not until 1935 that significant, if conservativeEuropean standards, social insurance policies were finallytituted under Franklin D. Roosevelt's New Deal. In 1938, ther Labor Standards Act, limiting the work week to 40 hours and

nning child labor for children under 16, was passed over stiffngressional opposition. The price of passage of the New Deal'scial Security and Fair Labor acts was the exclusion of domestic,icultural, and restaurant workers, who were largely African-

merican, from social security benefits and labor protections. [28

2013 the U.S. remains the only major industrial state without aform national sickness program. American spending on healthe (as percent of GDP) is the highest in the world, but it is a

mplex mix of federal, state, philanthropic, employer andividual funding. The US spent 16% of its GDP on health care in

08, compared to 11% in France in second place. [32]


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riticisms of welfare

rly conservatives, under the influence of Malthus, opposed everym of social insurance "root and branch", arguing, as U. C.rkeley economist Brad DeLong put it: "make the poor richer, andy would become more fertile. As a result, farm sizes would dropland was divided among ever more children), labor productivityuld fall, and the poor would become even poorer. Socialurance was not just pointless; it was counterproductive." [56]

althus, a clergyman, for whom birth control was an abomination,ieved that the poor needed to learn the hard way to practicegality, self-control, and chastity. Traditional conservatives

o protested that the effect of social insurance would be toaken private charity and loosen traditional social bonds ofmily, friends, religious, and non-governmental welfare

anisations. [57]

rl Marx, on the other hand, famously warned against theernalistic reforms advanced by liberal democrats in his 1850dress of the Central Committee to the Communist League , arguingt measures designed to increase wages, improve working

nditions, and provide welfare payments would be used to dissuadeworking class away from the revolutionary consciousness that


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believed was necessary to achieve a socialist economy. [58]

/


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STEP 5 - CRITICISM OF THE GDP AND THE GNH

What GDP does not reveal

t is also important to understand what GDP cannot tell us. GDP is not a measure ofhe overall standard of living or well-being of a country. Although changes in the

output of goods and services per person (GDP per capita) are often used as a measureof whether the average citizen in a country is better or worse off, it does notcapture things that may be deemed important to general well-being. So, for example,ncreased output may come at the cost of environmental damage or other external

costs

h as noise. Or it might involve the reduc tion of leisure t ime or the depletion ofrenewabl e natural resources. The quali ty of life may also depend on the distribution

GDP amon g the residents of a country, not just the ove rall level . To try to accountsuch factors, the United Nations computes a Human Development Index, which ranksntries no t only bas ed on GDP per capita, but on other factors , such as life

ectancy, literacy, and school enrollment. Other attempts have been made to account fore of the shortcomings of GDP, such as the Genuine Progress Indicator and the Grossonal Happiness Index, but these too have their critics.

RITICISMS OF THE GDP

he main criticisms of GDP as a realistic guide to a nation'sll-being are that (1) it is preoccupied with indiscriminateoduction and consumption, and (2) it include s the cost of dama

used by pollution as a positive factor in its calculations,ile excluding the lost value of depleted natural resources andpaid costs of environmental harm

forerunner of GDP criticism was senator Robert Kennedy whoseical views and harsh criticism of the excessive role played byance in the American way of life, gained him many enemies amongmore conservative, right-wing liberals. Watch the video

efully as it illustrates perfectly Kennedy's opinion ononomy, finance, welfare and happiness.

forerunner of the GNH - ROBERT KENNEDYSPEECH
http://www.businessdictionary.com/definition/natural-resource.htmlhttp://www.businessdictionary.com/definition/pollution.htmlhttp://www.businessdictionary.com/definition/factor.htmlhttp://www.businessdictionary.com/definition/production.htmlhttp://www.businessdictionary.com/definition/cost.htmlhttp://www.businessdictionary.com/definition/damage.htmlhttp://www.businessdictionary.com/definition/criticism.htmlhttp://www.businessdictionary.com/definition/nation.htmlhttp://www.imf.org/external/pubs/ft/fandd/basics/external.htmhttp://www.imf.org/external/pubs/ft/fandd/basics/external.htmhttp://www.businessdictionary.com/definition/harm.htmlhttp://www.businessdictionary.com/definition/costs.htmlhttp://www.businessdictionary.com/definition/natural-resource.htmlhttp://www.businessdictionary.com/definition/factor.htmlhttp://www.businessdictionary.com/definition/pollution.htmlhttp://www.businessdictionary.com/definition/damage.htmlhttp://www.businessdictionary.com/definition/cost.htmlhttp://www.businessdictionary.com/definition/production.htmlhttp://www.businessdictionary.com/definition/nation.htmlhttp://www.businessdictionary.com/definition/criticism.htmlhttp://www.imf.org/external/pubs/ft/fandd/basics/external.htm


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tch the video

DEO SCRIPT

o much and for too long, we seemed to have surrendered personal excellence andmunity values in the mere accumulation of material things. Our Gross National Product,

w, is over $800 billion dollars a year, but that Gross National Product if we judgeUnited States of America by that that Gross National Product counts air pollutioncigarette advertising, and ambulances to clear our highways of carnage.

ounts special locks for our doors and the jails for the people who break them. Itnts the destruction of the redwood and the loss of our natural wonder in chaotic

wl.

ounts napalm and counts nuclear warheads and armored cars for the police to fight thes in our cities. It counts Whitmans rifle and Specks knife, and the televisiongrams which glorify violence in order to sell toys to our children.

the gross national product does not allow for the health of our children, the qualityheir education or the joy of their play. It does not include the beauty of our poetryhe strength of our marriages, the intelligence of our public debate or the integrityur public officials.

easures neither our wit nor our courage, neither our wisdom nor our learning, neithercompassion nor our devotion to our country, it measures everything in short, except
https://www.youtube.com/watch?v=77IdKFqXbUY


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which makes life worthwhile.

it can tell us everything about America except why we are proud that we are American

CTIVITY 1. COMPREHENSION QUESTIONS

What is the GDP? What does it stand for? Whats its Italianequivalent?___________________________________________________________

Is the GDP composed only by goods and services for sale inthe market?___________________________________________________________

Is there more than one way to calculate GDP?___________________________________________________________

Whats the main problem in calculating the GDP in real terms?___________________________________________________________

Whats the relation between GDP and the health of theeconomy?___________________________________________________________

Whats the relation between GDP and employment rates?___________________________________________________________

What is the main message in Robert Kennedys speech?___________________________________________________________What cant GDP reveal?

___________________________________________________________Whats the main criticism to GDP ?

___________________________________________________________Make a research on the internet and find information about

the GNH? What is it? Who invented it? What difference isthere with the GDP?

___________________________________________________________

out GNH


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NH is a holistic and sustainable approach to development whichances between material and non-material values with the

nviction that humans want to search for happiness. The objectiveGNH is to achieve a balanced development in all facets of lifeich is essential to our happiness. The goal of GNH is happiness.e of several means to achieve this goal is sustainable economicwth. GNH is a unique approach to national and global

velopment.

e concept of Gross National Happiness consists of four pillars:r socio-economic development (better education and health),

nservation and promotion of a vibrant culture, environmentaltection and good governance.

e four pillars are further elaborated in nine domains:ychological well-being, living standard, health, culture,ucation, community vitality, good governance, balanced time used ecological integration. In accordance with these nine domains,utan has developed 38 sub-indexes, 72 indicators and 151iables that are used to define and analyze the happiness of theutanese people.

o:

hutan, Gross National Happiness and Sustainable Development
https://www.youtube.com/watch?v=2jf9xrnUjpI


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he background of Gross National Happiness

ture GNH Centre Bhutan The development philosophy Grosstional Happiness (GNH) is more important than Gross Domestic

oduct (GDP) was propounded by His Majesty Jigme Singyeangchuck, the Fourth King of Bhutan in the early 1970s.Helized that the existing development paradigm - GDP - did not

nsider the ultimate goal of every human being HAPPINESS.

r example, the King thought if the forest in Bhutan was loggedprofit, the GDP would increase; if Bhutanese citizens pickedmodern living habits investments in health care systems wouldmade and the GDP would increase; and if environmental

nsiderations were not taken into account, landslides, roadmages and flooding could occur and more investments would be

uired and the GDP would grow. Yet these actions wouldgatively affect the lives of the Bhutanese people.

the same time, GDP is not affected by volunteer work and theal unpaid work done in households. The precious free time thatneed to relax mentally and socialize is completely valuelessen only considering GDP. He further realized that GDP wasther an equitable nor a meaningful measurement for human

ppiness, thus the birth of the philosophy Gross Nationalppiness (GNH).

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From Business Basics to the Basics of Well-being(Final Edit)