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Is Wellbeing Economics the only way to generate economic growth?
This is from a newsletter from Gordon MacIntyre-Kemp, called Reinventing Scotland. It explores the wellbeing economy. Sign up here to receive it every Tuesday at 7pm.
I WANT to dispel a huge myth about the Wellbeing Economic Approach and that is that it requires de-growth, that is the policy of reducing levels of production and consumption within an economy in order to improve social wellbeing and minimize environmental damage.
Frankly, that sort of thinking is for academics with no idea how the real world economy works or what could be achieved with a wellbeing reset in our socioeconomic thinking.
The thing is, there is no such thing as 'an economy' nor 'a society' in isolation. They're so deeply interconnected that you can't fix one without shaping the other. This is where traditional 'left vs. right' politics falls short, each side hyper-focused on only half the equation, treating society and the economy as a rivalry rather than a partnership.
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This approach can offer shorter term wins but long term pain as society and economy fail to operate in balance.
Real progress happens when we stop seeing them as opposites. A thriving economy needs a healthy society, just as a thriving society needs a healthy economy. Wellbeing fuels economic participation; strengthens economic security, enables social and environmental stability and reduces inequality and poverty - the building blocks of socioeconomic success.
When people have opportunities, they contribute more. When businesses operate responsibly, they create lasting value, not just short-term profits.
This is the path to good-growth, that is growth that lifts people up instead of leaving them behind, that strengthens communities without exploiting them, and that funds public services without bankrupting the future. It's not left or right. It's a higher purpose for economy and politics.
So yes, I am saying that socialism and capitalism are dying belief systems, the battle of left versus right is last century's economic paradigm. The world has moved on but the economic debate has not.
Governments and economists seem to be focused on simply mitigating socioeconomic decline in the face of climate change, robotisation and AI, as if there were no alternative to the broken neoclassical capitalist system. In UK politics, Reform and 'Your Party' (Corbyn/Sultana) are making waves but it's just more extreme versions of the old broken left v right disconnect fuelled by society's desperate need for change - any change.
The Wellbeing Economic Approach is the key to future prosperity, economic security. The first political party to realise this will be able to command majorities in both Holyrood and Westminster.
This is a huge opportunity for the SNP, by linking wellbeing to independence, they will be able to demonstrate that independence is the real and radical change that the people are clamouring for. That would undermine both Reform's negative change agenda and Corbyn's outdated socialist approach. Fail to do that and Holyrood 2026 will punish the SNP.
People instinctively understand that real wealth doesn't trickle-down from big corporations, investment funds and wealthy individuals. That real wealth is created when society offers equal access to opportunity and wellbeing to all. Insecurity is the emotion dominating in politics right now and no political party seems to have the answer, so extremes get a hearing. The Wellbeing Economic Approach is the answer. By providing security to all in society it will also increase trust in the party/government that can deliver that positive change narrative.
The Wellbeing economy delivers good-growth not bad-growth , its certainly not a de-growth approach.
Here are five reasons why the Wellbeing Economic Approach beats GDP Growth First strategies and creates more growth:
1. Wellbeing Prioritises Long-Term Socioeconomic Resilience
GDP Growth-first: Chasing GDP at all costs leads to boom-bust cycles, inequality, and climate degradation.
Wellbeing Economic Approach: Invests in a wellbeing (prevention not emergency treatment) focused healthcare and green infrastructure, boosting productivity and sustainability. Nordic nations combine high GDP with low inequality via strong social safety nets to keep a higher percentage of the population economically active.
2. Reduces Costly Negative Consequences
GDP Growth-first: Ignore hidden costs like pollution, employee burnout, or corporate welfare (taxpayers foot the bill later), wages are kept low to allow profits to be generated but the population is impoverished and are now rebelling (Trump/Reform etc).
Wellbeing Economic Approach: Taxes carbon, regulates monopolies, and values unpaid care work, preventing future crises (e.g., New Zealand's "Wellbeing Budget" targets mental health and child poverty which were being exacerbated by GDP Growth-first thinking).
3. Unlocks Innovation
GDP Growth-first: Rewards short-term profiteering and price gouging share buybacks, rent exploitation.
Wellbeing Economic Approach: Public-private initiatives which create markets and solve problems. (e.g., clean energy from Scotland's renewable wealth, vaccines, and close to market Research & Development tax credits investing for the future). Germany's renewable transition "Energiewende," created 300K plus jobs when Scotland's renewable energy potential is far greater per head than Germany's.
4. Strengthens Social Trust
GDP Growth-first: Inequality, destroys trust in society, slows social mobility and weakens consumer demand (e.g., wage stagnation, despite GDP growth and a new class called the working poor).
Wellbeing Economic Approach: Wellbeing wages and pensions and affordable housing increase consumer spending, fueling consumer demand and reducing crime.
5. Aligns with Planetary Boundaries
GDP Growth-first: Depletes resources. 1.5 Earths are needed for current consumption according to the Global Footprint Network.
Wellbeing Economic Approach: Circular economies and regenerative agriculture (e.g., Costa Rica's reforestation doubled its rainforests and through eco-tourism boosted the nation's GDP since 1990 whilst dramatically cutting emissions).
Imagine what the world will look like when our politicians finally realise that you can't generate economic growth anymore without first focusing on the wellbeing of the people, planet and economy as one?
Gordon MacIntyre-Kemp is an economist, the CEO of Business for Scotland, the founder of the Believe in Scotland campaign consisting of 143 local and national Yes Groups, and the author of Scotland the Brief.
