Our obsession with GDP, globalisation and economic growth has failed to take into account the impact on health and the environment.
We need to recover from this collapse in a way which is good for people, planet and the economy. We need a Great Reset. Could "currencies" based on health and well-being be the answer to creating the thriving cities of tomorrow?
From GDP to health
GDP has come to dominate economics at the expense of many other things that make life worth living. GDP is powerful because money serves both as a day-to-day means of exchange understood by everyone and a unit of account at national and international levels. Money, therefore, links the worlds of micro-economics and macro-economics – of money in our wallet and national policies and politics.
However, GDP is not a good measure of progress. We propose now that health be the currency for the Great Reset. We are working to adapt the concept of "quality adjusted life year", or Qaly, to give us a measure of well-being that links individual health to global health – the new worlds of micro-health-economics and macro-health-economics.
There is nothing more important to us as individuals than our health, happiness and wellbeing. Happiness and wellbeing may be more elusive to define, but health has been defined by the World Health Organisation as ‘a state of complete physical, mental and social wellbeing and not merely the absence of disease or infirmity’. The word ‘health’ itself comes from the Old English for a state of wholeness.
Everything affects our health
Every action we take and every transaction we make can improve or reduce our own health or the health of others, either directly or indirectly. Some effects are obvious; eat more green vegetables and your chances of cancer are reduced. Smoke a cigarette and you can harm both your health and the health of those in your immediate vicinity. Some are less obvious; invest in education and you invest in better health outcomes. Buy local food and you reduce the risk of diseases spreading through a globalized economy. Things are more complex than this, of course, but you get the idea.
We have long recognised that social and economic factors affect our health. If you are well-educated and wealthy, generally your health is better. But the importance of environmental factors is becoming increasingly recognised. At a local level, air pollution affects respiratory health. At a global level, climate disruption is now considered by many public health professionals as the single biggest threat to health – far bigger than even the coronavirus. It will increase mortality and morbidity more than any other single factor. Likewise, we are recognising that loss of biodiversity (and other ‘planetary boundaries’) can have thresholds that, when exceeded, destabilize the biosphere, affect everything from water availability to crop yields and thus, in turn, impact on our health. Leading health institutions such as the Wellcome Trust now talk about Planetary Health.
We now have huge amounts of data on every conceivable part of our social, economic and environmental systems. Conceptually at least, we can track every transaction in our economy and link it to likely health outcomes. We know what is likely to increase health for the individual, the community and the planet. We can also see the possibility to steering our transactions in the direction of that elusive sweet spot where individual, community and planetary health are all maximised.
To implement our emerging knowledge of planetary health, we have two types of options: using information for down-top direction of our economies to generate health (eg through taxation or regulation), or bottom-up based on the information in transactions in a free-market type operation. The former might be considered easier and is in line with conventional socialist doctrine where the state corrects for externalities. The latter is a new form of market economy based on information embedded in each transaction. In practice, we should deploy both mechanisms for maximum benefit.
Quality-adjusted life years as a model
For a health-generating free market to work, we need to able to account for the health generated or destroyed by any transaction, so we can value transactions on their health-generating potential. Where for instance that organic fairtrade cup of coffee can be valued properly. This needs a new unit of account to go alongside money, implemented perhaps as a loyalty points system rewarding transactions which boost health by building social and natural capital. But what unit of account could possibly account for impacts as diverse as climate change and cancer caused by smoking a cigarette? And could any such unit of account remain sufficiently robust in the face of scientific scrutiny for it to useful for international governance?
We are working to adapt the ‘Quality Adjusted Life Year’ or Qaly to serve this function. One Qaly is one year in perfect health. It has been developed by the health profession to help decide, in a resource-constrained world, which medical treatments it can afford and which it can’t afford. Of course, it is not the only decision-making mechanism, but it is a useful tool – it gives us an indication of what will probably bring more health and what will bring less.
Conceptually, we can imagine calculating the impact on an individual’s Qalys from smoking a cigarette, or the impact on the health of the global population of carbon emissions resulting in climate disruption. Every transaction from buying a cigarette to buying a litre of gasoline or that fairtrade organic cup of coffee can be valued in terms of Qalys. In this way, health becomes the currency of the new economy. As data grows and knowledge improves, our estimates of Qalys improves too. Our economy gets better and better at generating health. Individual, national and global Qaly accounts link micro-economics to macro-economics, individual choice to government policy.
Rebuilding the world in the era of Covid-19
We live in the strangest of times. We have increasing data and knowledge, yet the future has never looked less secure. We have been tied to an economy which drove inequality, exposure to fast-spreading disease and environmental destruction to the extent of existential crisis. We have an unprecedented opportunity. We need the Great Reset. Imagine an economy where, alongside financial information, health information is carried too. Just as free operation of markets create financial efficiency, so being able to value and trade in health can create health efficiency.
Imagine then, a world where health is the currency.