Economics, happiness, and life-coherent societies


by Jeff Noonan

In a 2007 report on the environmental and economic impact of intensified exploitation of the Alberta Oil Sands, then Chief Economist of the Toronto Dominion Bank, Don Drummond, re-affirmed orthodox economics’ faith in Gross Domestic Product (GDP) as a measure of economic performance. “Gross Domestic Product,” he wrote, is the best available indicator of the overall health of the …economy, as it measures the market value of the goods and services produced.” [1]

I begin with this example because the oil sands, at current global oil prices, are both hugely profitable and massively environmentally destructive. [2]  GDP captures the money-value that production of crude from the oil sands generates, but cannot measure the life-value in spoiled habitats and poisoned watersheds it destroys.  If we assume that the purpose of an economy is to maximise the production of money-value, then economic health is synonymous with money-value growth.  If, along with orthodox economics, we make this assumption, then Drummond is correct, GDP is the best metric of economic health.

This orthodox understanding of the economy treats it as an infinitely expandable sui generis system of production and distribution abstracted from finite ecosystemic life-support systems.   Since economic systems that produce and distribute goods presuppose the existence of human beings, and these human beings depend upon natural life-support systems, the abstraction upon which orthodox metrics of economic health depends are materially irrational.  A material rational understanding of economic systems—one which properly understands their real conditions of existence and reproduction, must treat them as they really are:  susbsystems of the broader ecosystem. [3] Once we understand the dependence of economic systems on the broader ecosystem, then the fatal problem of GDP as a measure of economic health becomes clear:  GDP can rise as a consequence of life-destructive economic activities.  If all one focuses upon is money-value growth, seemingly “healthy” economies can destroy the natural life-support systems upon which our lives, and therefore the economy, really depend.


The Alienation of Orthodox Economic Metrics from Life-Value Systems

The disconnect between orthodox metrics of economic health and the health of wider natural systems of life-support is becoming more and more evident as environmental crises become more pronounced.  But it is not only at the level of natural life-support systems that crises are becoming evident.  Social institutions emerge out of natural systems of life-support as systems of life-development which allow our human capacities to flourish.  Here too GDP as the sole metric of economic health can miss life-crises caused by the erosion of public services and the consequent undermining of solidaristic, mutualistic, and reciprocal relationships upon which human life-development depends but which have no essential role in competitive capitalist markets.  But the crises generated by rising inequality, unemployment, and increasingly undemocratic tactics designed to suppress dissent and alternatives to austerity are now so extensive that they cannot be ignored, even by thinkers whose intellectual roots lie in orthodox economic science. In response to these growing life-crises, economists like Noble Prize winners Amartya Sen and Joseph Stiglitz, as well as social scientists, philosophers and politicians have begun to specify all those features of economic systems that are relevant to planetary and human life but which GDP cannot capture:  income distribution and the degree of inequality, the differential ability of different groups of people (women and men, for example) to convert income into valuable human experiences and activities, the meaningfulness of available work opportunities, the extent of free time, and the impact of economic growth on global life-support systems.[4]  Underlying this expanding criticism of GDP as a measure of economic health is a deep normative principle: money-value is at best an instrument of life-value; life-value, however, is not reducible to money-income.

Life-value is found in those resources, relationships and institutions that enable life to survive and develop, and those experiences and activities through which human sentient, cognitive-imaginative, and creative capacities are developed, expressed, and enjoyed.[5]  If we think of an economy as a system that produces and distributes life-value (using money-value as an instrument as appropriate), then a healthy economy is an economy that sustainably satisfies our real-life-requirements and enables the expression and enjoyment of human capacities in meaningful and life-affirmative ways.  Once we abandon the abstraction of the economy from the wider fields of natural life-support and social life-development, we must also abandon the abstract metric of economic health that governs orthodox economic science and normal capitalist practice.  We need new metrics of economic health that emerge out of concrete understanding of real human life-requirements and life-capacities.

Over the past three decades increasingly life-grounded metrics of economic health have emerged. Since 1990 the United Nations has published an annual Human Development Report.  The goal of these reports was to “go beyond income to assess the level of people’s long-term well-being.” [6] Since 2005, the government of Bhutan has applied the Gross National Happiness index to try to assess the well-being of its citizens. [7]. The pioneer of life-value philosophy, John McMurtry, has developed a Well-Being Index which attempts to capture the extent to which economic performance is producing instrumental and intrinsic life-value. [8]  In 2011 a major Canadian effort to develop a comprehensive measure of quality of life resulted in the Canadian Index of Well-Being. Contrary to the expectations of orthodox economics, it found that there was no strong correlation between income growth and Canadians’ sense of well-being, because income growth increased inequalities, generated new time pressures, and failed to strengthen community relations and democratic institutions.[9]  While the number of variables measured and the degree of complexity between these different indices varies, they are all efforts, Mark Anielski, author of The Economics of Happiness, argues, to remind orthodox economics that wealth really refers to  “the conditions of well-being,” and not money-income. [10]

In the most general terms, the conditions for human well-being must be derived from an understanding of human life-requirements.  Gross Domestic Product does not tell us anything about what human beings require to live, survive, reproduce, develop, and enjoy their lifetime, but only what the capitalist system requires in order for its exclusive measure of value – money to grow.  Gross Domestic Product is thus a metric of economic health which is alienated from the “life-ground of value,” while the various indicators of “genuine progress”  noted above are all striving to reconnect the measure of economic health to the life-ground of value.  The life-ground of value is  “the connection of life to life’s resources as a felt bond of being.” [11]

The life-ground embraces both the objective and subjective moments of Anielski’s ‘real wealth.’  Life’s conditions, both natural and social for human beings, are the objective content of real wealth.  They are comprised by the natural resources like healthy food and clean water and air, social relationships like caring and mutual concern, and social institutions like accessible public health care and education systems which all human beings anywhere require if they are to survive, live healthily, and freely unfold their life-capacities in meaningful and valuable ways. But the life-ground is not simply objective conditions in abstraction from subjective dispositions towards them.  It is a felt bond of being flowing from the subject to the objective conditions that sustain it.  In its subjective dimension the life-ground is experienced as the drive to appropriate life-goods for the sake of creating more life-value.  Instead of self-interested action whose aim is to produce more money returns for self, life-grounded action seeks to create more life-value: “life means organic movement, sentience, and thought … to reproduce life-value is to hold these capacities at their established scope.  To increase life-value is to widen or deepen them to a more comprehensive range.”[12] Hence, in an economic system that is life-grounded, both its system parameters and the motivating desires of the people whose action and interaction sustain it are oriented towards the growth of life-value.  Such a system would select against forms of enterprise which demonstrably impair or despoil the natural and social conditions of life and modes of collective and individual action which maintain or widen the scope of access to life-goods.

The idea of the life-ground of value is essential to the project of reconceptualising  the dominant measures of economic health in a way that captures their contribution to human happiness, because of the ambiguity of the idea of “happiness.”  While Aristotle, for example, links happiness to the realization of higher human capacities, reserving the term “happiness” for the experience of virtuous, or excellent, accomplishments, other traditions, most notably the traditions of classical utilitarianism which still inform orthodox economics, equate happiness with the transitory experience of pleasure, whatever the source of that pleasure might be. [13]  Thus, if people feel affirmed by driving an outsized, polluting automobile when they could use a well-developed public transit system or a bicycle to meet their transportation needs, orthodox economics accepts this subjective report and allows that driving such a vehicle is one form of happiness.  The cumulative damage such feelings of subjective happiness might cause to the natural life-support system are regarded as externalities that have no bearing on the quality of the  subjective feeling.  A life-grounded metric of happiness, by contrast, asks people to reflect upon the implications of their actions for the systems of life-support and life-development they  themselves depend upon along with everyone else.  They are not imperiously told what to feel happy about, they themselves discover the difference between transitory pleasures induced in them by the prevailing economic system and the deeper satisfactions that are afforded people through the contributions they make to the growth of life-value.  As McMurtry argues, in a life-grounded economy “the individual achieves individuality by expressing the social life-ground in some way particular to personal capacity and choice.” [14]  Happiness is the  feeling of achievement that arises in the individual when she become conscious of the life-value of the individual contribution she has made to the well-being of others.

As I noted above, the research for the Canadian Index of Well-Being revealed that the growth of money value is not strongly correlated with growth of happiness.  This reflection on the relationship between life-value and subjective happiness uncovers the deepest reason why there is no strong correlation.  Not only do the stresses of life in capitalist society, the difficulties it places in the way of  people accessing the natural and social conditions of life-support and life-development, conspire against happiness, so too does the paucity of opportunities to contribute meaningfully to social well-being through available forms of work.  Even a well-paying job (increasingly rare as working people are made to pay for the economic crisis with severe cuts to their wages and) can be unbearably boring if it is routinized and the worker subjected to authoritarian discipline.  Currently, work is not allocated according to ‘personal capacity and choice’ under a capitalist system, but according to whether or not and how labour can be profitably exploited.  There is no necessary identity between the profitable exploitation of labour and the objectively and subjectively life-valuable employment of labour.  If one only looks at labour from a money-value standpoint, these deeper problems do not appear.

However, these problems are not simply problems of measurement.  While it is true that one cannot find that which one does not have the proper tools to look for, it does not follow that the major social problems missed by metrics like GDP are caused by the informational poverty of the metric.  The major problems that GDP cannot disclose:  environmental crisis, unemployment, rising inequality, susbstantively undemocratic social systems, and the increasing moral and spiritual bankruptcy of our age, are problems caused by the class structure, growth dynamics, and legitimating value system of capitalism.  These problems can be disclosed by more life-grounded measures of well-being and genuine progress, but they are not solved by being disclosed to critical consciousness.  GDP is the preferred metric of orthodox economics because money-value is the life-blood of capitalism.  But this life-blood of capitalism is produced by draining life-support capacity  from the natural life-support system at unsustainable rates and exploiting the life-requirements and life-capacities of human beings by setting them in competition for ultimately meaningless system-rewards. The real value of life-grounded metrics of economic health is not that they provide new measures to evaluate capitalism, but rather that they can disclose the systemic barriers that capitalism puts in the way of building life-valuable economies.   The solution to this problem is not, as Anielski maintains, “virtuous action and genuine capitalism,” but a life-coherent alternative to capitalist life-destruction. [15]

Virtuous action in this context presumably means individual efforts to push existing institutions in the direction of prioritising the production of real wealth.  The problem is not with these efforts, but with the institutional dynamics and ruling value system within which they are undertaken.  “Genuine capitalism,” is defined by these institutional dynamics and ruling value system. Genuine capitalism is not a Platonic Form awaiting realization, but actual capitalist society as it has developed historically.  That society does produce genuine wealth, but not as its defining goal.  The defining goal of genuine capitalism is the realization of profit on investment and the reinvestment of that profit in order to realise even higher returns through the next cycle, and so on, ad infinitum.  Real capitalist wealth is thus distinct from real wealth in the life-value sense. Nevertheless, real capitalist wealth is real in capitalism, and the dynamics generated by pursuit of that goal generate the fundamental social problems disclosed by life-grounded metrics. If the goal of the metrics is not only to disclose the problems, but to solve them, they must become part of social struggles against capitalism, not for a genuine capitalism, since the goal of genuine capitalism is the cause of, not the solution to, the contemporary crisis of human and planetary well-being. Capitalism is in its governing dynamics and legitimating value-system life-incoherent. This life-incoherence must be solved at the institutional level if the real value of life-grounded metrics is to be realized.


Life-Incoherence and Life-Coherence: The Real Way Forward

To understand what “life-incoherence’ means in the context of capitalist growth dynamics, let  us consider more fully what Anielski means by “genuine capitalism.”  Anielski’s economics of happiness identifies five types of capital:  human, social, natural, built, and financial.  Genuine capitalism is achieved when “all five core capital assets are in harmony and in a resilient and flourishing state.”[16] There are two essential problems with this conception, each of which is a manifestation of life-incoherence.  First is the reduction of human, natural, and social reality to forms of ‘capital.’  Human beings, the natural world, and social relationships have intrinsic value which is foreign to the nature of capital.  No sort of capital is ever intrinsically valuable, but only valuable for the returns that it brings.  To treat human beings as human capital, for example, is to treat them as a factor of production, as mental or manual labour, as entrepreneurial risk taker, or as manager.  In all cases the human being is not valued as an unrepeatable bearer of life-value, but for whatever function they fulfil in the economic process.  If one wants to insist that to be in a “resilient” and “flourishing” state this intrinsic value must be recognised, one is no longer treating human beings as human capital. Movement away from the human capital model would indeed count as genuine progress towards a life-value economy, but it would also be a move away from genuine capitalism.

This conclusion leads straightaway to the second problem. Genuine capitalism is as Anielski argues a system that values everything as capital. But that means that to be in a “flourishing” state, everything must ultimately be productive of money-capital for private appropriation and reinvestment, for that is the very essence of capitalist economic dynamics. Natural capital, for example, would be judged in a flourishing state, from the capitalist perspective, when it is being profitably exploited.  Anielski would no doubt rejoin that his genuine capitalism rejects the unsustainable exploitation of natural capital.  Again, to reject the unsustainability is indeed genuine progress, but not towards genuine capitalism, but away from and beyond it.

Capital and capitalism are life-incoherent just because they are incapable of recognizing the intrinsic life-value of anything.  In other words, capitalism can only see things as actual or potential money-value.  Since money-value can in principle expand without limit, the capitalist believes that scarce resources can expand without limit as well, even though, as Nicolas Georgescu-Roegen, a forefather of ecological economics pointed out, to believe so is to ignore the second law of thermodynamics. [17]  It is this relentless drive of capital to transcend every material limit on money-value accumulation, even in the face of overwhelming evidence that life-support systems are finite, that makes capitalism materially irrational (destructive of its own conditions of existence)  and therefore life-incoherent. One might go so far as to say that the more genuine capitalism is, the more life-incoherent it becomes, because the more quickly it uses up scarce natural life-values: the more ruthlessly it exploits the intrinsic life-value of human beings.

Capitalism can proceed along this self-destructive path because people are dependent upon its growth dynamics for their livelihoods, even as those same growth dynamics undermine the natural and social conditions of their lives and well-being.  Capitalism is rooted in the private and exclusive control over universally required life-resources.  People who are deprived of need-based access to that which they require to live become dependent upon labour markets for their survival.  But labour markets are not governed in their operation by the goal of ensuring the survival of labourers, but the accumulation of money-capital through the profitable exploitation of labour. Official metrics of economic health like GDP report back to policy makers that the economy is healthy when money-value is expanding, but blind those same policy makers to the despoliation of natural life-support systems.  “The reigning system is governed by private money-sequence growth as determining good … [this] ruling principle of value gain cumulatively violates life-requirements at organic, civil, and environmental levels. [18] Recognition of this problem at the level of evaluative measurements is not sufficient to correct it, however, because people remain dependent on labour markets for their survival even when they can see the catastrophe looming on the horizon. Life-value metrics disclose the life-incoherence of capitalism, but they do not solve it on their own.  Only transformed social dynamics, relationships, and value systems can accomplish the necessary goal:  the construction of a life-coherent economic system.

The life-coherence principle is a general epistemic principle formulated by McMurtry in order to reconnect the scientific enterprise — which meant, in its origins, understanding of the universal systems within which humanity exists—to service the health of life-support systems. At present, science, like the ruling money-value system it typically serves, is alienated from the life-ground of value.  Its formalistic conceptions of scientific truth — consistency of conclusions with experimental evidence and logical coherence—exclude the most important criterion of all— coherence of conclusions with the health of life-support systems.  Hence, it may be ‘true’ in abstraction from broader considerations of life-support that steam at a certain temperature and pressure can separate oil from oil sands, but it is not ‘true’ to the deeper vocation of science to understand life’s conditions and requirements to put itself at the service of the oil industry, come what may for the environmental health of regions subjected to oil sands exploitation.

If science’s goal is to understand reality, it must grasp the real conditions of existence of the organic-social beings whose thinking carries out the enterprise of science.  To exclude the impact of science on life-support systems from its criterion of truth is to exclude from consideration the most essential aspect of reality for living beings, namely, those elements and processes within it that sustain life.  For science to contribute to processes whose cumulative impact is to undermine life-support systems is to contribute in a materially irrational way to the destruction of its own conditions of existence.  “The unseen flaw of scientific method is that it has no internal principle of consistency with universal life-support systems—to be in accord with reality in the deepest sense.  Partial science and rationality blinkers out the ultimate plane of coherence.  What most distinguishes scientific method—openness to disconfirming evidence and resolute attention to anomalous outcomes—has been abdicated where these standards reach furthest and cut most.  Science cannot be in accord with reality until it takes this excluded baseline into account.  More exactly, scientific conclusions are not rational until tested against common life-support standards.” [19] The truth and rationality of science thus depends upon consistency of scientific practices with maintenance of the real life-support systems that underlie its own continued existence as a human practice. Consistency with the ultimate vocation of science to comprehend and serve life-support systems means rejecting the seductions of money and power in favour of resolute commitment to objectivity in the understanding of the real conditions of life.

Gross Domestic Product is a paradigm instance of one-sided science becoming systematically blind to the life-conditions that sustain the people who practice it.  As we have seen, GDP cannot distinguish economic growth that increases the health of life-support systems by better enabling the development and expression of life-value, and economic growth that undermines life-support systems and diminishes life-value.  Despite this fatal weakness, orthodox economics, as Drummond’s report on the economics of the oil sand noted, regards GDP as the best overall measure of economic health.  This conclusion simply proves how life-blind orthodox economics has become.  This science, which often purports to be a science of rational choice under conditions of scarcity, cannot distinguish the most rational from the most irrational of choices:  choices which destroy the material conditions of the lives of the choosers from the material conditions that enable the lives of the choosers.  All the various metrics of genuine wealth, progress, and well-being discussed above are efforts to overcome this life-blindness with life-coherent standards of economic evaluation.

On their own, separated from social movements powerful enough to effect deep institutional and value-system change, they will be incapable of doing anything more than providing evidence of capitalism’s life-incoherence and material irrationality.  While the accumulation of evidence that exposes a systemic problem is itself a good, in so far as it can help to legitimate the social movements demanding solutions, it is not in itself a solution.  In addition to measuring the degree to which capitalism is not satisfying fundamental life-requirements and enabling the enjoyed expression of life-capacities, these metrics need a new object — new, life-grounded economic practices, relationships, institutions, and value-systems. The real value of life-grounded standards of measurement would be to provide positive evidence of the superiority of an economic system steered by the goal of maximising life-value and governed democratically by all citizens.  Such a system is not an abstract Idea awaiting perfect realization through pure force of political will; it exists in embryo and in tension with existing capitalist practices.  We can find its real structure wherever we find economic practices that sustainably and comprehensively satisfy the universal life-requirements of all.  When people’s life-requirements are comprehensively satisfied they are freed to express their vital life-capacities in ways which contribute to enhancing the health of the sustaining natural and social fields of life-support and development.

If we want concrete examples of life-coherent institutions, let us think of public institutions like hospitals and schools (where these are real public institutions)  which are open to all on the basis of need and interest, not ability to pay, and whose purpose is restoration and wider development of life-capacities.  The purpose of a hospital is not to make money for private owners, but to cure disease and restore full life-function.  The purpose of a school is not to extract maximum tuition from its students, but to develop their cognitive and imaginative capacities.  The public nature of these institutions means that they are open and available to any and all who need them, to the extent that their lives can benefit from them.  Their goal is not to return money-value to private investors but to increase the life-value of society as a whole, by ensuring the health and cultivating the intelligence of its individual members.

These public institutions serve as embryonic models of the global structure of a life-value economy.  In a life-value economy, money (or an analogous coordinating function) serves the higher purpose of ensuring the sustainable free development of life-capacities.  Since sustainability over an open-ended future is the regulating principle, a life-value economy is by definition life-coherent and materially rational.  That is, it does not exploit natural resources for the sake of maximizing profitable returns, regardless of the consequences for the life-support capacities of the globe, but ensures that comprehensive satisfaction of human life-requirements is compatible with the long term health of the sustaining environment.  It does not treat social institutions as servants and protectors of the private appropriation of money-value, but as cultivators and co-ordinators of human capacities and self-governing abilities. Within a life-economy people consciously govern their individual and collective life-activity in ways that ensure its long-term survival and open-ended development.


If a life-economy is by definition life-coherent and materially rational, then it follows that the means of struggle by which its principle is more widely and deeply embodied in actual institutions must also be life-coherent and materially rational.  Since a life-economy is not an abstraction or a blue print for a society to be created ex nihilo, but rooted in existing public institutions and sustainable economic practices, the means of struggling to extend its institutions cannot be vanguard revolutions, but patient, organic mass struggles that take the existing  level of development as a plateau from which to build higher.  The life-value metrics examined above should become vital conceptual tools of the struggle, providing evidence to social movements of the success (or failure) of new experiments in extending the institutions and practices of the life-value economy.  In this way the new metrics serve the interests of the construction of a better world.  This better world realises the vocation of humanity to make the world rational—i.e., not the outcome of blind mechanical forces, but the wisdom and intelligence of people guided by the unified goal of ensuring fairness and reciprocity in the achievement of universal well-being.

End Notes

[1] Drummond, Don. “The Cost of Bill C-288 to Canadian Families and Business.”  (Ottawa: Ministry of the Environment, 2007, p.2).

[2] Canada’s Toxic Tar Sands:  The Most Destructive Project on Earth, (Toronto: Environmental Defence), 2006. ( (accessed, Nov. 20th, 2008).

[3] Herman Daly, Beyond Growth, (Boston:  Beacon Press), 1996, p. 50.

[4] Joseph Stiglitz, Report by the Commision on the Measurement of Economic Performance and Social Progress, 2009, (accessed, January 23rd, 2012); Amartya Sen, Development as Freedom, (New York”  Knopf), 1999, Richard G. Wilkinson and Kate Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better, (London:  Allen Lane), 2009.

[5] John McMurtry, Value Wars, (London:  Pluto Press) 2002; John McMurtry, “What is Good, What is Bad: The Value of All Values Across Times, Places, and Theories.” Encyclopaedia of Life Support Systems (Oxford: EOLSS Publishers, 2010);  (accessed, January 18th, 2012);  John McMurtry  “Human Rights Versus Corporate Rights:  Understanding Life-Value, the Civil Commons, and Social Justice.”  Studies in Social Justice, Vol. 5, No. 1, Summer, 2011, pp. 11-61; Jeff Noonan, Materialist Ethics and Life-Value, (Montreal:  McGill-Queen’s University Press), 2012. 


[7] Government of Bhutan, Gross National Happiness Commission, (accessed, January 11th, 2012).

[8] John McMurtry  “Human Rights Versus Corporate Rights:  Understanding Life-Value, the Civil Commons, and Social Justice,” pp. 24-26, 32-36; Giorgio Baruchello and Rachel Lorna Johnstone, “Rights and Value:  Construing the International Covenant on Economic, Social, and Cultural Rights as Civil Commons,” Studies in Social Justice, Vol. 5, No. 1, Summer, 2011, p. 105.

[9] (accessed February 4th, 2012).

[10] Mark Anielski, “My Vision of Genuine Wealth for Canada:  Changing How We Measure Progress,” p.1, (accessed, February 4th, 2012); Mark Anielski, The Economics of Happiness, (Gabriola Island, BC:  New Society Publishers), 2007.

[11] John McMurtry, Unequal Freedoms, (Toronto:  Garamond), 1998, p. 23.

[12] Ibid., p. 298.

[13] Aristotle, “Nichomachean Ethics,” The Basic Works of Aristotle, Richard McKeon, ed., (New York:  Random House), 1941, p. 1103; Jeremy Bentham, Principles of Morals and Legislation, (New York:  MacMillan), 1948, p. 70.

[14] John McMurtry, The Cancer Stage of Capitalism, (London:  Pluto), 1999, p. 89.

[15] Mark Anielski, “My Vision of Genuine Wealth for Canada:  Changing How We Measure Progress,” p.7.

[16] Ibid.

[17] Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process, (Cambridge MA:  Harvard), 1971.

[18] John McMurtry,  “What is Good, What is Bad: The Value of All Values Across Times, Places, and Theories,” Ch. 12, “Reclaiming Rationality and Scientific Method:  The Life-Coherence Principle as Global System Imperative,” p.2.

[19] Ibid., p. 35.


[Thank you Jeff for contributing happily as always]

Jeff Noonan  is Professor of Philosophy at the University of Windsor, in Windsor, Ontario, Canada.  His most recent book is Materialist Ethics and Life-Value, (2012). More of his work can be found at his website:

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