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“Value will change in the post-covid world. On one level, that’s obvious: valuations in global financial markets have imploded, with many suffering their sharpest declines in decades. More fundamentally, the traditional drivers of value have been shaken, new ones will gain prominence, and there’s a possibility that the gulf between what markets value and what people value will close.”
For those of us not on the front line of responding to the
crisis, the lockdown gives us more time to reflect. Some of that reflection is
likely to focus on what is really important to us. This reflection may well result
in different priorities, which could have economic consequences.
The answer to the question of what’s important will vary
between individuals, depending in part on the circumstances in which they find
themselves. But are there any general themes that can be found in the thoughts of
others that might provide some guide?
One of the best known models of this type is that developed
by Abraham Maslow in the 1940s and built on over the next forty years or so. It
identified the basic and psychological needs that need to be more or less
satisfied to provide the foundation upon which an individual can realise their
full potential. This model is summarised in the diagram below:
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| Source: https://www.simplypsychology.org/maslow.html |
Subsequent iterations of the model were developed further to
include cognitive needs (knowledge,
understanding, meaning etc.) and aesthetic needs (search for beauty etc.),
placed between esteem needs and self-actualisation. The focus of Maslow’s work
was on how people can realise their full potential through
‘self-actualisation’, he also went on to identify the main characteristics of
those who self-actualise and their behaviours likely to lead to
‘self-actualisation’.
In their book ‘How Much is Enough?’ Robert and Edward
Skidelski explore similar ground in trying to identify the ‘basic goods’ they
feel are the key contributors to a ‘good life’. The characteristics of their
basic goods are that they should be universal, final (not just means to other
goods), not part of other goods and indispensable. Using these criteria they
identify seven basic goods:
- Health – a full functioning of the body
- Security – undisturbed by war, crime or major social and economic upheaval
- Respect – regarding interests and views as worth of consideration
- Personality – autonomy, spontaneity, a private space to be oneself
- Harmony with nature
- Friendship – robust, affectionate relationships
- Leisure – activity in its own right without compulsion
Not surprising that there is quite a bit of overlap between
Maslow’s work and that of the Skidelskis.
Another way of beginning to answer the question of what is
important is by asking people. This was the approach taken by Oxfam in Scotland
in developing their ’Humankind Index’. In 2011 they worked with over 3000
people across arrange of communities in Scotland to identify what they needed
to live well. The results are summarised in the table below:
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Looking at these different approaches a picture begins to
emerge of what is important for a good life. It appears that the things that the basics that directly impact on
wellbeing are also essential foundations in realizing human potential. This has
significant implications for economic development. A wellbeing focused economy
is an end in itself, but in contributing to realizing the potential of the individuals
who live in a place, it will also be central to realizing a place’s economic
potential.
If the necessary foundations for a good life are not widely
available, then not only will individual wellbeing be compromised, there will
also be wider implications for society and it’s economy. As Sendhil
Mullainathan and Eldar Shafir pointed out in their book ‘Scarcity: Why having
too little means so much’, when
resources are scarce survival instincts come to the fore and longer term
considerations are likely to be crowded out. In other words when you are
struggling to survive from day to day, investing and innovating for a
sustainable future take a back seat.
Trying to reimagine and make sense of the possibilities that
could flow from any change in priorities will be critical to economic
development post Covid-19. Will we for instance take the opportunity to frame
the economy more as a way of organising production, exchange etc. in a
sustainable way to directly promote wellbeing? Or will we revert to the more
traditional frame of seeing the economy as a means of generating the resources
to pay for good things and clear up the bad things generated in the process?
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