Addressing the University of Kansas in early 1968, Robert F. Kennedy notably proclaimed that "Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage ... yet does not allow [accounting] 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."
Quite evidently, the concept of measuring the "worth" of a socioeconomic system was already a struggle some 50 years ago, and given our world's advancing complexity and integration, including the broad movement of labor and goods, it certainly will not become easier anytime soon. In dealing with this reality, Simon Anholt, an independent policy advisor to global governments, has developed the Good Country Index, a "measure [of] what each country on earth contributes to the common good of humanity, and what it takes away."
The index, composed of a wide range of data from the U.N and other international organizations, does not measure what a country does "at home," normally expressed by its Gross National Product, but rather how governments balance their responsibility to their citizens and to the rest of the world.
In Anholt's version of the world, Ireland is ranked as the leading country, with the U.S. not even reaching the Top 10 (#21). From an investment perspective, the outcome is not so clear. A dollar invested 10 years ago in a broadly capitalized index of listed U.S. corporations (Russell 3000) would have returned nearly 125 percent, while money invested in the Irish Stock Market, over the same period, would have returned only 25 percent.
Reality is even more obvious when the two nations are measured by "ease of doing business," based on data compiled by The World Bank: the U.S. is ranked within the Top 10, but Ireland lags behind in 15th place.
There is a twist to our data. As Senator Kennedy pointed to "worthwhile life measures," it is unfortunate to know that the benefits of a multi-decade domestic economic boom have progressively reached fewer and fewer people in the U.S.
Although inequality is falling across the globe, the U.S. is excluded from this encouraging trend. The richest one percent of Americans is reaping the benefits of more than a fifth of our nation's income, and the top ten percent "earns" about half, more than in recent economic super cycles, such as the Roaring Twenties, when the "take home" was at about 45 percent.
Whereas the lack of equal distribution (real or perceived) is a "loaded topic" to begin with, income inequality has a profound impact on a nation's overall "well-being" and future development. Research has shown that rising income disparity will ultimately result in the formation of a less safe and less healthy society with more limited economic growth and misaligned savings, even contributing to global imbalances that fuel widespread economic and financial crises.
The debate about internal and external value creation, in real monetary unit terms or more philosophically, as expressed by the Good Country Index, is difficult; however, regardless of the preferred method of measure, it is an unconditionally important topic to consider.
The recent conflict between Russia and the Ukraine, and imposed economic sanctions against Russian interests by the rest of the world, gives evidence of how a "bad image" can lead to real negative economic limitations. Conversely, the idea that a "good country" will shape a more desirable future, including economic and socioeconomic outcomes, must be the logical counter-conclusion.