Wellbeing economics 101: A transformative approach that centres people and planet
As traditional economic models deplete the environment and turn communities into competitors, how can we flip the script and make sure our economy serves people and the planet, instead of the other way around? Warwick Smith, the Program Director for Wellbeing Government from the Centre for Policy Development, explains the transformative concept of wellbeing economics, and how we can start applying it in Australia.
Do you know in Wales, your doctor can prescribe you a bike? And on top of that, all major new road projects were scrapped in 2023 to safeguard the climate and encourage more equitable, active and public forms of transport? It’s all part of the country’s Well-being of Future Generations Act, which requires public bodies in Wales to think about the long-term impact of their decisions on people and the planet.
This act and its outcomes are wellbeing economics in action, which aims to move us towards a more holistic and interconnected approach to ‘progress’, health, and, well, life.
As the last few hundred years have shown us, overarching ‘growth at all costs’ economic models invariably lead to environmental decline and social inequities. “Traditional economics tends to be extractive,” says Warwick, “depleting natural ecosystems to feed the economy, often without serving the needs of the people.”
As a result, our individual and collective wellbeing suffers. Under neoliberalism, it’s assumed that our wellbeing is tied to increasing our economic capacity and consumption choices – the more money we have, the more choices we have, the ‘better off’ we are….right? “The reality is, when we atomise ambition down to the individual or nuclear household level, we create winners and losers, privileging those with wealth and power,” Warwick says.
In contrast, wellbeing economics is a transformative approach that acknowledges our place within our ecosystem, and our duty to our community and to one another. “The catchphrase for wellbeing economics is an economy that works for people and planet,” Warwick explains. “It’s about turning the conversation around and asking how we can shape the economy so it benefits us and the environment.”
While the term 'wellbeing economics’ is relatively new, the concepts that guide it are anything but. “In First Nations framing, there’s no separation between people and Country,” Warwick says. “It’s about honouring that relationship and understanding that our activities are embedded within the environment.”
The four P’s of wellbeing economics
The wellbeing economy framework comprises four key components, or “P’s”:
Purpose: “We need to orient the economy according to our shared human values,” Warwick says. “And there really are a lot that cross the political spectrum. People want relationships, they want good places for their kids to grow up, they want connection. They want to be valued.”
Prevention: “One of the big ideas in wellbeing economics is preventing problems from arising in the first place,” Warwick explains. “That means treating the root cause of issues upstream, instead of just treating the symptoms. Taking a proactive, early-intervention approach has a long-term cost benefit analysis.”
Pre-distribution: This involves structuring the economy so that everyone has access to decent jobs and living conditions from the start, minimising the need for redistribution later through things like taxes. “It means better paying jobs, and people being assured they will have basic universal services and a roof over their heads,” Warwick says.
People-powered: “Being people-powered is about democratising the economy,” Warwick says. “People need a real voice in decisions that impact their lives, rather than just turning up at the ballot every four years.”
Learning from global and local examples
It’s not just Wales that is putting wellbeing economics into action. New Zealand and various Nordic nations have also adopted wellbeing frameworks, but these examples underscore the need for sustained commitment across changing governments. “When there’s a change in leadership, these initiatives can lose momentum,” Warwick says.
Wellbeing economics also draws many parallels with the concept of doughnut economics, a regenerative set of practices that we at Regen Melbourne have created a local version of to act as a map and compass for our city. “Both frameworks aim to create an economy that better serves people and the environment,” Warwick says. “Visual tools like the doughnut can effectively communicate complex ideas, making the conversation more accessible.”
The path forward for wellbeing economics in Australia
As the conversation around wellbeing economics gains momentum locally and abroad, Warwick and his colleagues at the Centre for Policy Development are taking steps to apply these concepts in Australia. “We’re advocating for a really broad national conversation,” Warwick says. “Actually having an in-depth conversation in the community about what Australians want their country to be like could be incredibly healing, especially after the Voice referendum.”
Above all, Warwick hopes that citizens will recognise their agency, not just within the economy, but in all of the human-made systems that govern our lives. “People need to feel they are not just passive participants in an inevitable system,” Warwick says. “They can have their voices heard. They can be part of driving change.”
Want to learn more? Read the Centre for Policy Development’s ‘The Wellbeing Economy in Brief’.
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