Estimating the Mental Wealth of nations: valuing social production and investment

Abstract

There is a growing global movement among economic, public policy and academic communities questioning the appropriateness of gross domestic product (GDP), and specifically its growth, as an indicator of progress. Despite the broad range of indices and dashboards that have been developed to challenge it, GDP remains entrenched as the essential indicator of national prosperity, despite its purpose being to measure the size and performance of the economy. The strength of GDP lies in its established centrality in policymaking as well as its rhetorical and conceptual simplicity; it is in essence the value of monetized tangible goods and services produced in a given period. Unlike well-being indicator dashboards, GDP provides a single measure against which governments, the media and the general community can track and compare national economic performance. And, while many composite indices offer monotonously stable findings, the weekly, quarterly and annual fluctuations of GDP prompt policymakers to act (that is, to assess reforms, identify constraints and shift policy levers to enhance its growth). By contrast, the Mental Wealth metric offers a new approach. Rather than joining the chorus of moving beyond GDP, the Mental Wealth Initiative first recognises the system of national accounts that underpins GDP as a significant human achievement. The initiative then seeks to refine, augment and improve GDP as a measure of social welfare by broadening the boundary of production to include the value of goods and services provided by populations that are not currently monetized but make genuine contributions to social prosperity and quality of life. Hence, the Mental Wealth metric provides a holistic measure of national prosperity, capturing the value of both economic and social production, and recognizing the fundamental importance of brain capital (mental capital, mental health and brain health) and collective cognitive and emotional health and well-being. This paper provides a simple, practical strategy for augmenting GDP by monetizing social production, thereby establishing a more accurate indicator of the wealth of nations. Occhipinti and co-authors argue in this Perspective that by contrast to gross domestic product, the Mental Wealth metric provides an improved indicator for assessing economic and social production, including brain capital, measuring mental health and capital and emotional health and well-being.