Towards an Economics of Happiness – Part I

by Helena Norberg-Hodge

Originally published in the Summer 2012 RSF Quarterly

For most of human history our survival has depended on intimate and enduring bonds of interdependence with one another and with the Earth. We evolved in large extended families, with strong communities and a deep connection to the plants, the animals – the living world – around us.  But today: we’re isolated from one another, and the natural environment has ended up primarily a resource to sustain consumer lifestyles.

In order to shift direction from the destructive path we’re on, it’s essential that we look closely at the economy.  The way we organize the economy largely determines our interactions with other species, natural resources, and the wider environment, and has a profound impact on community – the mainstay of human well-being.

The very structure of today’s global economy is causing instability, artificial scarcity and competition, tearing apart the fabric of community, and causing ecological destruction on a massive scale. On the other hand, diverse, smaller-scale, locally-based economic structures tend to support community, thus furthering both ecological sustainability and quality of life.

Culture, community, environment

Like most Westerners, I grew up under the impression that economic growth meant progress, and that the environmental costs of growth were unfortunate but necessary. After the Second World War, the government of my native country, Sweden – as well as almost every other industrialized nation – dismantled smaller-scale, diversified food production in favor of large-scale agriculture and rapid urbanization.

As people found themselves living alone in high-rise urban apartments, the result was a weakening of the deep ties to family, community, and the natural world. Another result was diminished biological diversity on the land.  By the 1980s more than half of the dwellings in Stockholm were inhabited by one person living alone and, at the same time, the rates of depression, alcoholism and suicide were increasing.

I might not have seen these links between the economy, community and the environment had I not had the privilege, as a young woman, of living in relatively intact local economies in rural Spain, Bhutan, and Ladakh (or Little Tibet).

In Ladakh, I learned to speak the language fluently and lived among the indigenous population. At that time, the Ladakhis still lived in large, extended families.  I witnessed how they nurtured children in ways that led them to feel appreciated, seen and heard; this, in turn, led to a positive, relaxed sense of self. Intergenerational care and exchange was part of daily life, and there was much less fear of growing old than in the modern western world. Because of the intricate webs of mutual support there was also less strain on individual relationships; there was more peace and collaboration, less strife and conflict.

I also observed how the benefits of being able to depend on one another within a community dramatically increase when you have real economic interdependence. Economic exchanges provide a structural relationship of give-and-take that binds people together in ways that provide material, as well as, psychological security. We often use the term ‘self -reliance’, but what I witnessed was ‘community reliance’.

In Ladakh, as in other traditional cultures, people were not only linked to one another, but also to the land which they depended on for their basic needs – their food, clothing and shelter. Their interdependence with nature was deep and spiritual- something that contributed to an expanded sense of self.

The social and ecological costs of globalization

In the 35 years since I first arrived in Ladakh, I have seen the culture and environment eroded in a multitude of ways.  A range of serious problems have emerged that were virtually unknown in the traditional culture: unemployment, pollution, resource shortages, a widening gulf between rich and poor, and violent ethnic conflict.  What was the cause of these problems? They were clearly the result of outside economic pressures over which the Ladakhis had little or no control.

In the modern world today, it is now increasingly recognized that a global casino of banks and corporations is threatening the viability of whole nation states. But the structures behind this irrational system have gone largely unnoticed.

Our tax monies have been used to industrialize and corporatize production in ways that have concentrated profits in the hands of giant corporations like Coca Cola and Monsanto, and big banks like Morgan Stanley and Goldman Sachs.  To increase global trade, transport and energy infrastructures were built up to serve megacities and sprawling metropolises, while neglecting smaller cities, towns and rural areas.  At the same time, governments from both the right and left signed on to trade treaties that opened their economies to outside investment, while scrapping laws and regulations designed to protect national and local businesses, jobs, and resources. In the process, national sovereignty has been relinquished to giant transnational corporations and undemocratic supranational bodies like the World Trade Organization (WTO) and the Bank of International Settlements (BIS).  In the name of growth through increased trade and comparative advantage, governments have blindly hollowed out their own economies.

The connection between centralized power, industrial production, and urbanization needs to be examined if we want to turn away from the global system that today threatens all life on Earth. Whether it’s CO2 emissions, plastic islands in the Pacific, extinction of species, clear-cutting of rainforests, or the growth of poverty and social breakdown, the roots of our problems lie in the destruction of more diversified, community-reliant and productive local and national economies. The realization is dawning that we need fundamental change, and the growing localization movement is beginning to provide some solutions.

Stay tuned for Part II of this essay where Helena discusses the power of localization.

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