Richer Than We Think

By Bernard F. Miller KC, ICD.D 

Nova Scotia recorded its best GDP growth on record in 2021 — by deliberately not focusing on GDP growth. Here is what that means for the way we measure, report, and govern economic success.

In March 1968, Robert F. Kennedy stood before a crowd at the University of Kansas and delivered one of the most enduring critiques of economic measurement ever put to a political audience. The Gross National Product, he said, “counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them.” But it does not allow for “the health of our children, the quality of their education, or the joy of their play.” It “measures everything, in short, except that which makes life worthwhile.”

Fifty-eight years later, we are still measuring GDP and using it as an indicator of social “success.”

That is not because no one has proposed an alternative. It is because the institutions, incentive structures, and intellectual frameworks that grew up around GDP have proven remarkably resistant to change; this is not because GDP is a good measure of what matters, but because it is a convenient one. Governments think they know how to grow it. Economists know how to report it. Policy analysts know how to analyze it. Media knows how to cover it. The financial industry knows how to price it.

Nova Scotia, in the span of a single pandemic, demonstrated something that should fundamentally challenge that convenience. By choosing social well-being as its governing policy framework, and by proving that good public health is good economics, this province gave us a working proof of concept for a different approach. The question now is whether we have the wisdom to build on it.

The Problem with the Measuring Stick

The story of GDP’s creation contains a warning that has been systematically ignored for ninety years.

In 1934, Congress asked Simon Kuznets, a University of Pennsylvania economist at the National Bureau of Economic Research, to develop a uniform set of national accounts to help government understand the economic catastrophe of the Great Depression. Kuznets delivered a tool of extraordinary analytical power. And then, in the same report, he warned Congress explicitly: “the welfare of a nation can scarcely be inferred from a measurement of national income.” He elaborated decades later: “distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term.”

“The welfare of a nation can scarcely be inferred from a measurement of national income.”

Simon Kuznets, inventor of GDP, to the US Congress, 1934

His warning was precise, prophetic, and almost entirely unheeded. By the time of the Bretton Woods conference in 1944, GDP had become the universal shorthand for national progress. By the 1970s, it had achieved the status of what one scholar has called a “fetish” — a proxy measure that had displaced the underlying value it was designed to track.

What GDP counts, and what it ignores, is not neutral. It counts the prison as economic activity, but not the sharing of economic value, community cohesion and restorative approaches that would have prevented the crime. It counts the emergency room visit, but not the steps under the social determinants of health that would have avoided it. It counts the business travel and commute, but not the time with family it consumed. It counts the disaster reconstruction, but not the resilience that would have reduced the damage. The BP oil spill of 2010, the largest in history, likely registered as a net gain in GDP, because the cleanup generated more measurable economic value than the fishing industry it destroyed.

More fundamentally: GDP counts aggregate output but tells us nothing about who benefits from that output, or at what human and environmental cost. A society in which ten people generate all the wealth and 990 live in precarity can have excellent GDP growth. It is not, by any standard, prospering.

What the Data Actually Shows

The gap between GDP growth and broadly shared well-being is no longer a theoretical concern. It is measurable, measured, and growing larger. It is the key contributor to political unrest and declines in trust in democracy.

In Canada, real GDP per capita has roughly doubled since 1980. Corporate profits are at historic highs. Productivity — though lagging by international comparison — has grown substantially. And yet over the same period:

GDP grew. But the things that actually make life livable, a home, a job, a friend, a community that you can rely on and hope for your children’s and grandchildren’s futures got harder for too many people.

This is not economic success. It is economic activity masquerading as success because we have chosen a measuring stick that cannot distinguish between the two.

What Nova Scotia Proved in Its Living Lab in 2020 and 2021

Between 2020 and 2021, Nova Scotia conducted what amounts to a real-world experiment in whether social well-being is good economics.

The province’s COVID response was built on a single governing premise: that good public health is good economics. Rather than accepting the conventional framing — that public health restrictions and economic activity exist in fundamental tension, that protecting lives requires sacrificing livelihoods — the province chose to treat community health as the foundation of economic resilience.

The results were noticed around the world. In November 2020, The New York Times described Nova Scotia as a “magical, virus-free world.” Der Spiegel and other major international publications followed, holding up the province as a case study in what coordinated, community-rooted public health could achieve. The international attention was not merely journalistic curiosity: epidemiologists, economists, and public administrators around the world were studying what Nova Scotia had done and asking whether it could be replicated.

What they found was that the province had achieved something extraordinary: it had controlled transmission more effectively than most jurisdictions while maintaining more economic and social activity than jurisdictions that had deprioritized public health. The trade-off that everyone assumed was fundamental — lives versus livelihoods — turned out to be largely a false choice. The better path was to put social well-being and healthy communities first.

6.2% Nova Scotia real GDP growth in 2021 — second-highest of any province in Canada, well above the national average of 5.0%.

Source: Statistics Canada, Provincial and Territorial Economic Accounts, 2021.

And then the GDP data arrived. Statistics Canada reported that Nova Scotia’s real GDP grew by 6.2% in 2021 — the second-highest rate of any province in the country, behind only Prince Edward Island, and well above the national average of 5.0%. By the most conventional of economic measures, the province that had chosen community solidarity outperformed provinces that had not and, for a period, outperformed the global economy.

The lesson is not complicated: the health of the community and the health of the economy are not in competition. They are expressions of the same underlying reality. Communities where people trust each other, where public institutions are competent and respected, where the social infrastructure of belonging and mutual aid remains intact — those communities are more economically resilient, more innovative, more attractive to investment and talent, and more capable of collective response to shared challenges.

Good public health is good economics.
Nova Scotia proved it.

The Next Proposition: Good Social Well-Being Is Good Economics

The pandemic was a specific and in some ways exceptional test. The challenge before us now is whether the same logic holds more broadly — whether the investment in social well- being that the pandemic showed to be economically valuable is also economically valuable in conditions of a new crisis, a rupture of the prior global order.

The evidence says yes. And the evidence is substantial.

The case is not that economic growth doesn’t matter. It is that the form of economic activity, the governance of firms, the distribution of ownership, and above all the strength of community institutions determine whether growth translates into the broadly shared well- being that is both intrinsically valuable and the foundation of sustainable economic performance.

Social well-being is not a constraint on economic growth. It is one of its most important preconditions.

A Constitutional Anchor

There is a dimension to this argument that has not received the attention it deserves: the constitutional one.

CONSTITUTION ACT, 1982 — SECTION 36(1)(A)

“Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to promoting equal opportunities for the well-being of Canadians.”

This language is not incidental or decorative. As I have argued at length elsewhere on PolicyWonks.ca, it is a genuine constitutional value: a deliberate inscription of a normative commitment to a substantive condition of human flourishing.

The word “well-being” appears nowhere else in the Constitution Act, 1982. Its use in section 36 signals a conscious choice by the drafters to describe something more than income, more than formal equality before the law, more than the provision of public services. It signals what philosophers call eudaimonia — the Aristotelian concept of a life that is genuinely flourishing, not merely surviving.

The provision is also explicitly egalitarian in its orientation. The commitment is not to the aggregate level of well-being but to equal opportunities for well-being — to ensuring that the benefits of a prosperous society are accessible to all Canadians, wherever they live and whatever their circumstances. It was included in the constitutional framework precisely because the drafters recognized that Canadians in different parts of the country, including Atlantic Canada, do not automatically enjoy equal access to the resources and conditions that support a flourishing life.

Courts have not treated section 36(1)(a) as directly justiciable. But this does not make it constitutionally inert. A provision can be non-justiciable and still constitute a genuine constitutional value — one that shapes the space within which governments and non-state actors operate, informs legislative discretion, and provides a legitimate constitutional basis for political and institutional initiative.

For those who believe that policy should be grounded in something more durable than political fashion or the preferences of the current government, section 36(1)(a) provides exactly that grounding. Equal opportunities for the well-being of Canadians is not a partisan aspiration. It is a constitutional commitment. A policy framework built around measuring and advancing well-being is not departing from Canadian constitutional values. It is finally beginning to honour them.

What a Well-Being Framework Would Measure

The objection that is usually raised at this point is practical: well-being is subjective, multidimensional, and hard to measure. GDP is at least a number. What replaces it?

The objection has less force than it once did. A substantial body of work — from the OECD’s Better Life Index (launched in 2011 and covering 11 dimensions of well-being across 38 member countries), to the UN Human Development Index, to the Genuine Progress Indicator used by Hawaii, Maryland, and Vermont, to New Zealand’s landmark Wellbeing Budget of 2019 — has demonstrated that well-being can be measured with rigour and that the resulting metrics are genuinely informative in ways that GDP is not.

New Zealand’s approach is worth pausing on. When Prime Minister Jacinda Ardern’s government introduced the Wellbeing Budget in 2019, it did not abolish GDP. It changed the question. Instead of asking “what will produce the most economic output?”, the budget asked “what will improve the well-being of New Zealanders, reduce inequality, and build the resilience of communities?” The five initial priorities — mental health, child well-being, support for Indigenous peoples, transition to a low-emissions economy, and thriving in a digital age — were selected not because they scored well on GDP metrics but because they addressed what the evidence identified as the most significant gaps in New Zealand’s actual well-being. The Public Finance (Wellbeing) Amendment Act 2020 embedded this approach in legislation. Interestingly, along with Nova Scotia, New Zealand also proved good public health is good economics.

A Nova Scotia well-being framework would not need to start from scratch. The building blocks are available. What it would require is a political and institutional commitment to measuring what matters, to reporting on it publicly, and to holding policy accountable against it. A well-being index for Nova Scotia might track, across regions and demographic groups:

Each of these dimensions is measurable. Each of them affects the capacity of people to live flourishing lives. Each of them, as the evidence reviewed above suggests, also affects economic performance in ways that GDP, focused only on aggregate output, systematically obscures or misses altogether. Nova Scotia, we are richer than we think.

Nova Scotia Can Lead the Way — Again

Management philosopher Peter Drucker predicted, in 1994, that the early decades of the twenty-first century would be a period of social transformation and challenge — that the institutions we had built to organize economic and social life were not adequate to the moment, and that new forms of organization, new measures of success, and new understanding of what communities are for would be required.

He was right. And Nova Scotia, improbably, is well-positioned to be part of the answer.

To understand why, it helps to understand what most of the developed world has lost. In his landmark 2019 book The Third Pillar, former Governor of the Reserve Bank of India and University of Chicago economist Raghuram Rajan argues that healthy societies rest on three mutually supporting pillars: the state, the market, and the community. The genius of the postwar liberal order was the balance among them. What the last half-century has delivered, through the twin forces of market globalization and expanding state bureaucracy, is the progressive hollowing out of the third pillar. Markets became too powerful and too disconnected from the places where they operate. The state expanded to compensate, providing services that communities once organized for themselves, but in doing so often crowded out the very institutions it was trying to support. The result, across most of the English-speaking world, is a society of atomized individuals, served by remote bureaucracies and disciplined by impersonal markets, with no proximate community standing between them and the forces that shape their lives.

A parallel diagnosis comes from a different political tradition. In Red Tory (2010), British philosopher Philip Blond argued that both the political left and right had, over the previous half-century, converged on a politics that simultaneously centralized power in the state and atomized social life through the market. The left gave us the bureaucratic welfare state; the right gave us financial deregulation and the dissolution of local ownership. Both destroyed the intermediate institutions — guilds, mutual aid societies, locally owned businesses, civic associations — that had historically stood between the individual and the large-scale forces of state and capital. What Rajan and Blond diagnose from different political traditions is the same underlying reality: the destruction of the social middle ground that makes communities genuinely resilient.

Here is the paradox that Nova Scotia’s history reveals: what was long treated as a liability may in fact be its most distinctive asset. Decades of slower GDP growth, of being labelled a “have not” province and receiving equalization payments, meant that Nova Scotia never fully underwent the social levelling that accompanied rapid industrialization and financialization elsewhere. The big-box retail consolidation, the disappearance of locally owned institutions, the replacement of community association with corporate amenity — these forces arrived here later, more slowly, and less completely than in central Canada or the American northeast. The cooperative tradition of the Antigonish Movement survived. The credit unions remained rooted. The volunteer networks stayed active. The habits of mutual aid, of knowing your neighbours, of showing up — these persisted in ways that wealthier, faster-growing jurisdictions had long since traded away for convenience and scale. Nova Scotia, in other words, retained Rajan’s third pillar when much of the developed world was letting it crumble. What economists recorded as underperformance was, in social terms, a form of preservation. And that preserved community capital, as the COVID living lab demonstrated beyond reasonable doubt, is now a genuine competitive advantage — one that no tax incentive can manufacture and no strategic plan can conjure from scratch.

The province retains something that more atomized, more mobile, more financialized societies have largely lost: genuine community capital, accumulated over generations in the cooperative tradition of the Antigonish Movement, in the mutual aid networks that mobilize in crisis, in the collective solidarity of the COVID response. That capital is not merely sentimental heritage. It is a real economic asset, more valuable than uranium, gold, oil, gas, or any other minerals. The real value is the kind of bridging social capital that the research literature identifies as a driver of growth, resilience, and innovation.

The province also has a statutory innovation that almost no other jurisdiction possesses: the Community Interest Companies Act of 2016, which created a corporate form that requires enterprises to serve a community purpose alongside generating returns. This makes Harvard’s strategy guru, Michael Porter’s concept of “shared value” legally enforceable. It is the kind of institutional tool that a well-being economy needs to move from aspiration to operation.

Nova Scotia has, in the work of the Halifax Chamber of Commerce during COVID, demonstrated a model of what collaborative, cross-sector direction-setting looks like when the stakes are clear and the commitment is genuine. The question more broadly before every institution in this province that cares about its future is whether we will seize this moment.

The COVID pandemic gave us one proof of concept: good public health is good economics. The next strategic chapter must prove the deeper proposition: that social well-being is good economics — that communities with stronger social cohesion, more equitable income distribution, better housing, and deeper belonging attract more talent, generate more innovation, sustain more resilient businesses, and produce more durable growth than communities organized solely around the pursuit of shareholder returns.

Nova Scotia proved the first proposition to the world. It has the history, the institutions, the constitutional grounding, and the community capital to prove the second.

The measuring stick is broken. It is time to build a better one. And it is time to start here.

Bernard F. Miller KC, ICD.D
Bernard was Nova Scotia’s Deputy Minister of Business between 2018 and 2021, the only time the province achieved 6.2% GDP growth. He is currently Executive Chair at Restorative Change Lab, which works on the institutional dimensions of community renewal and restorative communities.

---

FURTHER READING
Is Equal Opportunity for the Well-Being of Canadians a Constitutional Value? — PolicyWonks.ca
OECD Well-being Framework and Better Life Index — oecd.org
Statistics Canada: Provincial and Territorial Economic Accounts, 2021
Raghuram Rajan, The Third Pillar (2019)
Peter Drucker, “The Age of Social Transformation,” The Atlantic Monthly, May 1994