Sarkozy Wants Happiness Used as Economic Indicator

France plans to include happiness and well-being in its measurements of economic progress, French President Nicolas Sarkozy said Monday, beckoning other countries to join in a "revolution" in the way growth is tracked after the global economic crisis.

France will adapt its statistical toolbox as recommended by two Nobel economists whom Sarkozy commissioned 18 months ago to analyze new ways of measuring social progress, he said in a speech in Paris on the first anniversary of the collapse of Lehman Brothers.

France -- whose growth has lagged its peers in recent decades according to standard measures -- will also try to convince other governments to change their economic tracking, Sarkozy said

"A great revolution is waiting for us," he said. "For years, people said that finance was a formidable creator of wealth, only to discover one day that it accumulated so many risks that the world almost plunged into chaos."

"The crisis doesn't only make us free to imagine other models, another future, another world. It obliges us to do so," he said.

Measuring well-being would make France's economy, famous for its short workweek and generous social benefits, look more rosy.

"If leisure has no accounting value because it's essentially full of non-market activities like sport or culture, we put productivity below human fulfillment," Sarkozy said.

AP

Sarkozy asked U.S. economist Joseph Stiglitz, winner of the 2001 Nobel economics prize and a critic of free-market economists, and Armatya Sen of India, who won the 1998 Nobel prize for work on developing countries, to lead the analysis of growth tracking.

Sen helped create the U.N. Human Development Index, a yearly welfare indicator designed to gear international policy decisions to take account of health and living standards.

Their report, delivered to Sarkozy on Monday, recommends shifting the emphasis from gross domestic product, which measures economic production, to well-being and sustainability.

The report recommends looking at household income, consumption and wealth rather than production in the economy as a whole for a better reflection of material living standards. Non-market activities such as house cleaning should also be tracked, it says.

More prominence should be given to the distribution of income and wealth, as well as to access to education and health.

Attention should also be given to whether countries are over-consuming their economic wealth and damaging the environment, the report says.

In terms of GDP, the internationally recognized way of measuring an economy, French growth has lagged behind the U.S. throughout most of the past 30 years, although recent turmoil in financial markets has hit the U.S. economy harder.

France appears to be weathering the worst economic downturn since the Great Depression better than most, recording a small level of growth -- 0.3 percent -- in the second quarter this year.

But economists warn that the good news won't last.

"France seems to be resisting better on the downside but it is increasing less in the upside of the cycle which means it is collecting less wealth and it will be more difficult to rebound afterward," said Laurence Boone, an economist with Barclays Capital in Paris.