If I were to ask you, “what are the economics of this country?”, you’d probably point to GDP, income, and productivity. If I were to ask you, “what are the economics of this company?”, you’d point me to unit revenues and costs per employee and so on. But if I were to ask you, “wait a minute. How is this country or company or town or city, this organization, reallydoing?are people’s lives really growing, developing, flourishing?”, then you’d probably frown, and draw a blank. The two aren’t the same, are they? Today we’re seeing that whole economies can “grow” — but somehow, human possibility, life as a quest for self-realization,doesn’t. The old paradigm — where organizations exist only for an economic purpose, maximizing income — isdeeply, badly broken.
So let’s change it.
Theeconomicsof a thing is about the speed and quantity of income a thing generates. But theeudaimonicsof a thingis about how muchlifea thing produces: howwell-being, possibility,andwealthis created. Life is a quest for self-realization. Yours, mine, our grandkids’, our planet’s. And eudaimonics asks: is that quest reaching fruition? Are lives flourishing, blossoming, transforming, realizing their fullest possibilities? In the same way that lottery winners end up paradoxically unhappier than before, so an organization’s financial success, whether that organization is a city, a company, or a country, is no sure guarantee that it’s creating better lives. Eudaimonics, in contrast to economics, is the art of creating genuinely good lives.
It has five newendsto optimize human organizations, whether cities, towns, countries, or corporations — in contrast to the old paradigm’s sole end of maximizing income — for the subtlety and complexity of lives genuinely well lived. You can think of them as basic components, building blocks. Please don’t think of them final, exhuastive, or even complete: they’re just a little tiny first step.
Omegais an organization’s immediate ability to create eudaimonia. Think of it as how much real human well being is created for every dollar, pound, or yen that an organization earns — whether it’s a company or a country. Technically, you can think of Omega as the ratio of well being to income, or the derivative of well being with respect to income. What it means is this: an economy is about “returns” of all kinds, not just financial returns. Organizations exist to “return” higher levels of meaning, purpose, trust, happiness, safety, creativity, and so on — all the aspects of well-being. Omega is a way to begin thinking about how much real human benefit is created for every increment of financial income. Here are two quick examples. Social media as it is makes us significantly more unhappy and mistrustful: it has negative effects on well-being — it’s made by low Omega companies, and it lowers the Omega of whole economies. The USA is a nominally rich country, but it has a notably low quality of life, marred by falling life expectancy, insecurity, stress, violence, and unhappiness: it’s a low Omega country.
Thetais an organization’s long-term ability to create eudaimonia. You can think of it intuitively as whether an organizations is a net positive actor or not. Technically, it’s defined as an organization’s wealth against it’s illth. “Illth”, a word coined by John Ruskin, the Victorian intellectual, is negative wealth: examples of illth are pollution, disease, discrimination, and misinformation. Just as there are many kinds of “capital”, or wealth, so there there are many kinds of illth — financial, human, social, intellectual. Hurricane cause huge damage to the real wealth — whether property, relationships, careers, or health — of millions. Yet cleaning up even the material damage is paradoxically counted as abenefitto GDP, because people will have to pay for it — while none of the damage itself is counted as a kind of illth to begin with at all. Stronger hurricanes are just one kind of illth that results from climate change — and the wrecked homes, cars, possessions, and relationships are wealth that suddenly became illth a as result. When Theta is falling, there’s more illth that people have to clean up just to attain the same level of eudaimonia.
Here are three more quick examples. In the same way, the earthquakes and pollution caused by fracking are illth that isn’t factored into GDP (though, perversely, the “benefits” of cleaning it up are), the profits of oil and gas companies, or local economies. Illth like climate change and earthquakes makes the cities and states affected by them lower Theta places — and the corporations helping to create such illth lower Theta companies. A new generation of news media traffic in misinformation, a less visible form of illth: they’re notably low Theta organizations. The rise of antibiotic resistance is another form of illth, negative natural capital, lowering the Theta of sectors of the economy.
Lambdais an organization’s ability to realize human possibility. It’s the ratio of realized well-being to the highest possible well-being. For example, Denmark has the highest global ranking on many indicators of well-being; comparatively speaking, the US lags far behind, whether on life expectancy, maternal mortality, trust, and so on — it’s a relativelylow Lambdasociety for a rich nation. We might ask the same question of social media: if Facebook users are unhappier, lonelier, and angrier than Twitter users, then it would have a lower Lambda. Lambda lets us see how far the boundaries of human possibility extend, and how much an organization is realizing them.
Kappais an organization’s net effect on well-being. There are many different dimensions of well-being — social, financial, intellectual, physical, and so on — and Kappa assesses whether an organization is creating one, many, or all. For example, Silicon Valley’s approach to apps today lifts our physical well-being, Ubers and Taskrabbits making our lives more convenient, but it has corrosive effects on democracy, jobs, cohesion, trust, and happiness — because it creates one kind of well-being only at the expense of others, it’s net eudaimonic effect is small: it has alow Kappa.
Epsilonis an organization’s equality of well-being. Here’s a simple contrasting example: the US has tremendous inequalities of well-being, the rich enjoying dramatically longer and easier lives than even the middle class, for whom life expectancy is falling — that’s dangerously low Epsilon. But the same isn’t true for the EU, which enjoys a high, well-rounded Epsilon.
Now let’s talk for a moment about the why. Why should you or I bother with all the new ideas above, instead of just going on maximizing income? I think the answer’s very simple.
Every bit of eudaimonia that we fail to create in time comes back to us as a cost we will have to pay.Whether by punishment, through legislation, or by losing our legitimacy. It took fifty years, but today Big Tobacco is going down the tubes because people are aware of it’s negative effects on well-being. The same is true across the board — it’s a long list of industries that are under attack these days, from finance to pharma to food — only the window closes faster, not in fifty years, but maybe ten. The world moves faster and faster to limit the effects of organizations that don’t create eudaimonia. Where today we use social media and know it’s bad for us, tomorrow, if those companies don’t get their acts together, they’re soon going to go just the way of Big Tobacco, suffering punishment by customers, steep legislation and taxation, and simply losing attractiveness in the eyes of the future. Eudaimonia is your best insurance policy in an uncertain world if you want to build an organization that matters, lasts, endures, and maybe, just maybe, is a little bit respected, treasured, and loved.
So. A few more words about the fundamentals. They’re not just there to be mathematical abstractions — but lenses. First, they’re there to help us see: to conceptualize, understand, and think about the world using a eudaimonic paradigm. Are we creating eudaimonia? What kinds? Are we net positive actors? Are we really creating any of the many kinds of wealth and not illth? To what extent are we evoking human potential? These are some of the questions they’re meant to help ask. The purpose of the lensesisn’tto spend a great deal of time in overly precise calculations and giant spreadsheets — it’s to gain a conceptual understanding of an organization’s true economics and so to be able to create genuinely better lives.
For us, here and now, perhaps it’s enough to be able just to see, speak, hear about ourselves — and our purpose in this world — in the broad, imprecise terms of a new paradigm: “We are a low Omega organization, and we must do better”; “We are a medium Lambda corporation, and we can improve”; “There’s too much illth in our city, town, investment ecosystem, and it’s bringing our Theta down”. And so on. If we can simply say that we are seeing and thinking in a more sophisticated way about genuinely good lives, that is a beginning, a step towards the future. Seeing with clarity and vision into the living heart of eudaimonia, not just calculating blindly without, is what the components are there for.
Why are we really here? What are we here to achieve, build, create, grow? These are the big questions. Of lives. Of moments. But most of all, I think, of turning points. And you and I are at one. The old paradigm is broken. In the truest sense — not broken is in “gone”, but broken as in failing to bring life itself to life. The only question is if you and I are clinging to it, or building a new paradigm, more beautiful, true, and enduring.