Just over a mile away from here
in Edinburgh's old town
is Panmure House.
Panmure House
was the home of the world-renowned
Scottish economist Adam Smith.
In his important work
"The Wealth of Nations,"
Adam Smith argued,
amongst many other things,
that the measurement of a country's wealth
was not just its gold and silver reserves.
It was the totality of the country's
production and commerce.
I guess it was one of the earliest
descriptions of what we now know today
as Gross Domestic Product, GDP.
Now, in the years since, of course,
that measurement
of production and commerce,
GDP, has become ever more important,
to the point that today,
and I don't believe that this
is what Adam Smith would have intended,
that it is often seen as
the most important measurement
of a country's overall success.
And my argument today
is that it is time for that to change.
You know, what we choose to measure
as a country matters.
It really matters, because
it drives political focus,
it drives at public activity,
and against that context,
I think the limitations of GDP
as a measurement of a country's success
is all too obvious.
You know, GDP measures
the output of all of our work,
but it says nothing about
the nature of that work,
about whether that work
is worthwhile or fulfilling.
It puts a value, for example,
on illegal drug consumption,
but not on unpaid care.
It values activity in the short term
that boosts the economy
even if that activity is hugely damaging
to the sustainability of our planet
in the longer term.
And when we reflect on the past decade
of political and economic upheaval,
of growing inequalities,
and when we look ahead to the challenges
of the climate emergency,
increasing automation,
an aging population,
then I think the argument for the case
for a much broader definition
of what it means to be successful
as a country, as a society,
is compelling, and increasingly so.
And that is why Scotland in 2018
took the lead, took the initiative
in establishing a new network
called the Wellbeing Economy
Governments group,
bringing together as founding members
the countries of Scotland, Iceland,
and New Zealand for obvious reasons.
We're sometimes called the SIN countries,
although our focus is very much
on the common good.
And the purpose of this group
is to challenge that focus
on the narrow measurement of GDP,
to say that, yes, economic growth matters.
It is important.
But it is not all that is important.
And growth in GDP should not be pursued
at any or all cost.
In fact, the argument of that group
is that the goal, the objective
of economic policy
should be collective wellbeing:
how happy and healthy a population is,
not just how wealthy a population is.
And I will touch on the policy
implications of that in a moment,
but I think particularly
in the world we live in today
it has a deeper resonance.
You know, when we focus on wellbeing,
we start a conversation
that provokes profound
and fundamental questions.
What really matters to us in our lives?
What do we value in
the communities we live in?
What kind of country,
what kind of society,
do we really want to be?
And when we engage people
in those questions,
in finding the answers to those questions,
then I believe that we have
a much better chance
of addressing the alienation
and disaffection from politics
that is so prevalent in so many countries
across the developed world today.
In policy terms, this journey
for Scotland started back in 2007
when we published what we call
our National Performance Framework,