Sustainability & Society
GDP is still king in global economics, but is it what really drives well-being? A call to consider social cohesion as core to future public policy.
The recent Nobel Prizes in Economics underscore a simple but enduring truth: growth remains at the center of economic thinking. Far from the debates on degrowth or post-growth paradigms, the message is clear—growth matters. It creates jobs and fosters prosperity. Without it, social progress is at risk. Yet this focus on growth also raises a question: Is GDP really the be-all and end-all of happiness? The issue receives relatively little attention in mainstream anglophone media. While preparing this column, I found it difficult to come across recent articles that take the time to discuss the importance of growth for overall well-being. One notable exception is a short yet insightful 2019 piece in The Economist, highlighting the Easterlin Paradox (1974) which shows how, in major countries like India, Japan, and the United States, well-being can evolve in the opposite direction to economic performance.
This year’s Nobel Prizes also highlight significant reflections that go beyond ‘pure’ economic thinking, with Joel Mokyr, one of the laureates, emphasizing the role of cultural and social factors in driving long-term development. I don’t think we can aggregate his work with that of Karl Polanyi, a heterodox economist from the 1940s. However, to me, both perspectives resonate with each other, as Polanyi argued that economic activity is always embedded within social and institutional contexts. Recognizing this embeddedness makes it evident that economic performance alone cannot fully capture a society’s progress or well-being—a realization that has led to the development of composite policy indicators since the late 20th century, including the Human Development Index (HDI), the Sustainable Development Goals (SDGs), and the Gross National Happiness index.
Do these measures really mark a break? In a sense, yes — they represent the first formal attempts to integrate social, human, and environmental dimensions into public policies. Moreover, since the early 2010s, other models have emerged, better suited to explicitly take human connection into account, such as the OECD’s Better Life Index and the UN’s World Happiness Report. According to the latter, the top predictor of happiness is social support, followed by GDP: this is providing grounds for conclusions, while also motivating further efforts to deepen understanding. In any case, relationship between economic growth and social cohesion seem to increasingly attract attention, even within institutional spheres, as illustrated by the work of Olivier De Schutter, the United Nations Special Rapporteur on extreme poverty.
Here is a selection of publications on the subject.
Idealist and/or materialist theories of economic growth
Tony Yates, The Financial Times, October 13, 2025
A Nobel prize shared between two approaches to economic growth: on one hand, the “idealist” theory, embodied by Mokyr, which emphasizes the role of beliefs, culture, and ideas in driving economic progress; and on the other hand, the “materialist” theories represented by Aghion and Howitt, which focus on institutions, competition, and the concrete material and institutional forces that sustain growth.
A Low-Growth World Is an Unequal, Unstable World
Kristalina Georgieva, IMF Blog, July 23, 2024
Periods of stagnation lasting four years or more tend to increase income inequality within countries by nearly 20% — a rise significantly greater than that observed during a simple recession.
Economic growth does not guarantee rising happiness
The Economist, March 21, 2019
An illustrated article about the Easterlin paradox, positioning 85 countries relatively to their GDP per person vs self-reported happiness.
Croissance, Inégalités et Méritocratie (in French)
Olivier de Schutter, Conference HEC Paris 2025
Drawing on thinkers like Fred Hirsch, Tibor Scitovsky, and Robert Putnam, Olivier de Schutter shows that beyond a certain point, additional growth does not increase well-being and can even harm mental health, distort time use, foster harmful social comparisons, and weaken social cohesion.
If Rachel Reeves wants growth, improved community cohesion could be essential
Heather Stewart, The Guardian, January 19, 2025
A new paper in UK (D. Halpern, A. Haldane) has found that social capital ‘is the cake, not the icing’ of a strong, well-functioning economy. Then, any successful recipe for growth must include fostering trust and collaboration within communities. The article shares concrete proposals.
How do we measure happiness? World Happiness Report 2023
Sustainable Development Solutions Network (SDSN/UN), March 16, 2023
Why are some countries happier than others? According to the UN World Happiness Report, the top predictor of happiness is social support, followed by GDP.
Well-being and beyond GDP
OECD
A good entry point for understanding the Better Life Index, its context, and the OECD’s efforts to explore the drivers of well-being beyond mere economic growth.
Exploring the Social Limits to Growth with Timothée Parrique
Brian Czech, The Steady Stater, January 11, 2021
Timothée Parrique, author of the "The Political Economy of Degrowth, explain his research, focusing on "growthism," social limits TO growth, and the social limits OF growth.
