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The Economics Of Happiness

By Helena Norberg-Hodge

26 February, 2010

Thirty-three years ago, I watched as a culture that had been sealed off from the rest of the world was suddenly thrown open to economic development. Witnessing the impact of the modern world on an ancient culture gave me insights into how economic globalisation creates feelings of inadequacy and inferiority, particularly in the young, and how those psychological pressures are helping to spread the global consumer culture. Since that time I have been promoting the rebuilding of community and local economies as the foundation of an ‘Economics of Happiness’.

When I first arrived in Ladakh or “Little Tibet”, a region high on the Tibetan plateau, it was still largely unaffected by either colonialism or the global economy. For political reasons, the region had been isolated for many centuries, both geographically and culturally. During several years of living amongst the Ladakhis, I found them to be the most contented and happy people I had ever encountered. Their sense of self-worth was deep and solid; smiles and laughter were their constant companions. Then in 1975, the Indian government abruptly opened Ladakh to imported food and consumer goods, to tourism and the global media, to western education and other trappings of the ‘development’ process. Romanticised impressions of the West gleaned from media, advertising and fleeting encounters with tourists had an immediate and profound impact on the Ladakhis. The sanitised and glamorised images of the urban consumer culture created the illusion that people outside Ladakh enjoyed infinite wealth and leisure. By contrast, working in the fields and providing for one's own needs seemed backward and primitive. Suddenly, everything from their food and clothing to their houses and language seemed inferior. The young were particularly affected, quickly succumbing to a sense of insecurity and self-rejection. The use of a dangerous skin-lightening cream called "Fair and Lovely" became widespread, symbolising the newly-created need to imitate the distant role models – western, urban, blonde – provided by the media.

Over the past three decades, I have studied this process in numerous cultures around the world and discovered that we are all victims of these same psychological pressures. In virtually every industrialised country, including the US, UK, Australia, France and Japan, there is now what is described as an epidemic of depression. In Japan, it is estimated that one million youths refuse to leave their bedrooms – sometimes for decades – in a phenomenon known as “Hikikomori.” In the US, a growing proportion of young girls are so deeply insecure about their appearance they fall victim to anorexia and bulimia, or undergo expensive cosmetic surgery.

Why is this happening? Too often these signs of breakdown are seen as ‘normal’: we assume that depression is a universal affliction, that children are by nature insecure about their appearance, that greed, acquisitiveness, and competition are innate to the human condition. What we fail to consider are the billions of dollars spent by marketers targeting children as young as two, with a goal of instilling the belief that material possessions will ensure them the love and appreciation they crave.

As global media reaches into the most remote parts of the planet, the underlying message is: "if you want to be seen, heard, appreciated and loved you must have the right running shoes, the most fashionable jeans, the latest toys and gadgets”. But the reality is that consumption leads to greater competition and envy, leaving children more isolated, insecure, and unhappy, thereby fuelling still more frantic consumption in a vicious cycle. In this way, the global consumer culture taps into the fundamental human need for love and twists it into insatiable greed.

Today, more and more people are waking up to fact that, because of its environmental costs, an economic model based on endless consumption is simply unsustainable. But because there is far less understanding of the social and psychological costs of the consumer culture, most believe that making the changes necessary to save the environment will entail great sacrifice. Once we realise that oil-dependent global growth is not only responsible for climate change and other environmental crises, but also for increased stress, anxiety and social breakdown, then it becomes clear that the steps we need to take to heal the planet are the same as those needed to heal ourselves: both require reducing the scale of the economy – in other words localising rather than continuing to globalise economic activity. My sense from interviewing people in four continents is that this realisation is already growing, and has the potential to spread like wildfire.

Economic localisation means bringing economic activity closer to home – supporting local economies and communities rather than huge, distant corporations. Instead of a global economy based on sweatshop in the South, stressed-out two-earner families in the North, and a handful of billionaire elites in both, localisation means a smaller gap between rich and poor and closer contact between producers and consumers. This translates into greater social cohesion : a recent study found that shoppers at farmers’ markets had ten times more conversations than people in supermarkets.

And community is a key ingredient in happiness. Almost universally, research confirms that feeling connected to others is a fundamental human need. Local, community-based economies are also crucial for the well-being of our children, providing them with living role models and a healthy sense of identity. Recent childhood development research demonstrates the importance, in the early years of life, of learning about who we are in relation to parents, siblings, and the larger community. These are real role models, unlike the artificial stereotypes found in the media.

A deep connection with nature is similarly fundamental to our well-being. Author Richard Louv has even coined the expression ‘nature deficit disorder’ to describe what is happening to children deprived of contact with the living world. The therapeutic benefits of contact with nature, meanwhile, are becoming ever more clear. A recent UK study showed that 90 percent of people suffering from depression experience an increase in self-esteem after a walk in a park. After a visit to a shopping centre, on the other hand, 44 percent feel a decrease in self-esteem and 22 percent feel more depressed. Considering that over 31 million prescriptions for anti-depressants were handed out in the UK last year, this is a crucial finding.

Despite the enormity of the crises we face, turning towards the more community-based, localised economies represents a powerful solution multiplier. As Kali Wendorf, editor of Kindred magazine, says, “the way forward is actually quite simple: it’s more time with each other, more time in nature, more time in collective situations that give us a sense of community, like farmers’ markets, for example, or developing a relationship with the corner shop where you get your fruits and vegetables. It’s not going back to the Stone Age. It’s just getting back to that foundation of connection again.”

Efforts to localise economies are happening at the grassroots all over the world, and bringing with them a sense of well-being. A young man who started an urban garden in Detroit, one of America’s most blighted cities, told us, “I’ve lived in this community over 35 years and people I’d never met came up and talked to me when we started this project. We found that it reconnects us with the people around us, it makes community a reality”. Another young gardener in Detroit put it this way: “Everything just feels better to people when there is something growing.”

Global warming and the end of cheap oil demand a fundamental shift in the way that we live. The choice is ours. We can continue down the path of economic globalisation, which at the very least will create greater human suffering and environmental problems, and at worst, threatens our very survival. Or, through localisation, we can begin to rebuild our communities and local economies, the foundations of sustainability and happiness.


Helena Norberg-Hodge is an analyst of the impact of the global economy on cultures and agriculture worldwide and a pioneer of the localisation movement. She is the founder and director of the International Society for Ecology and Culture (ISEC). Based in the US and UK, with subsidiaries in Sweden, Germany, Australia, and Ladakh, ISEC's mission is to examine the root causes of our social and environmental crises, while promoting more sustainable and equitable patterns of living in both North and South. Its activities include The Ladakh Project, a Local Food program and Global to Local Outreach.She is the author of Ancient Futures: Learning from Ladakh, based on her first-hand experience of the effects of conventional development in Ladakh. Ancient Futures has been described as an "inspirational classic" by the London Times and together with a film of the same title, it has been translated into 42 languages. A new edition will be published in 2009 by Random House. She is also co-author of Bringing the Food Economy Home and From the Ground Up: Rethinking Industrial Agriculture. In 1986, she received the Right Livelihood Award, or the "Alternative Nobel Prize" as recognition for her work in Ladakh