A Systems Approach: Calvert-Henderson Quality of Life Indicators

Association For Evolutionary Economics
Hilton Hotel
Atlanta, GA
January 6, 2002

Background on the Project

The Calvert-Henderson Quality of Life Indicators (C-HQLIsm) are the result of a partnership between the Calvert Group, Inc., Bethesda, MD and this author, for whom they represent the fulfillment of 25 years of effort, research and advocacy in the USA and worldwide for more comprehensive statistics beyond the traditional macroeconomic indicators, GNP/GDP based on the United Nations System of National Accounts (UNSNA). The proliferation of alternative measures of sustainable human development and quality-of-life attest to tremendous progress in the past decade. The UNDP’s first Human Development Index (HDI) in 1990 devised by my two respected colleagues, the late Mahbub ul Haq and UNDP’s current Director of Development Studies, Inge Kaul, gave all our efforts great impetus. In 1989, I contributed (along with Mahbub ul Haq, Lord Meghnad Desai, Dharam Ghai, Frank Bracho, Victor Anderson and other indicators experts) to The Caracas Report to the South Commission New Ways to Measure Development (Institute for Advanced Study, Caracas, Venezuela, 1989, English version 1990, Redefining Wealth and Progress, Toes Books, NY).After many years of presenting and debating such expanded approaches to national accounts with government and academic colleagues at venues worldwide, I found a “fit” with the research needs of a leading, innovative socially responsible investment firm located in the United States, The Calvert Group of Bethesda, MD, which has been in the mutual fund management business for 25 years and manages approximately $7.0 billion in assets in 27 screened and non-screened portfolios for over 220,000 shareholders. I have served since 1982 on the Calvert Social Investment Fund Advisory Council.Calvert’s responsible investment practices are based on the belief that caring for our natural environment and recognizing the importance of human dignity is essential to the long-term health and well being of our increasingly interdependent societies. In the early 1980s, Calvert pioneered the use of social investing on a broader scale than ever before. In 1982, the Calvert Social Investment Fund became the first mutual fund to oppose apartheid in South Africa. Fittingly, in 1994, following Nelson Mandela’s victory in the country’s first open elections, Calvert became one of the first mutual funds to re-invest in free South Africa. Calvert recognizes that investing in companies that are committed to meeting the challenges of the future with an expanded view of corporate responsibility is more than just a matter of “doing the right thing” – it also makes good business sense. Calvert embraces the concept that a primary objective of every corporation should be to enhance the wealth of all stakeholders, not just the company’s shareholders, but also its employees, customers, vendors, communities, and the natural environment. More than $2 trillion is invested today in the United States in a socially responsible manner, according to a study released in 2000 by the US nonprofit Social Investment Forum.The Calvert-Henderson Quality of Life Indicators project was launched in 1994 with Calvert’s Social Investment Research Department, directed by Jon Lickerman. Why does a private sector financial firm publish such a set of indicators of quality-of-life? I will quote directly from Calvert Group’s CEO, Barbara Krumsiek explains: “All over the country, citizens are demonstrating a desire to engage in serious discussions about how to measure quality of life and livable communities in the United States. For the past five years, Calvert Group has been preparing for this exciting debate: The Calvert-Henderson Quality of Life Indicators, the first national, comprehensive assessment of the quality of life in the United States using a systems approach. The deep insights, illuminating findings, and bold explorations into historical and contemporary environmental, economic and social conditions of the country are our contributions to this important debate. We hope its messages and many lessons will empower people from all walks of life who are equally concerned about our future together on this planet.”Beyond this social mission of educating investors and the general public, Jon Lickerman, the project’s co-director, adds: “Over the course of Calvert’s practice in socially responsible investing, it became evident that there were no broad indicators by which to guide our unique investment strategy. Asset managers had traditional economic indicators to help guide their financial investment decisions. Routine releases of the Consumer Price Index, housing starts, consumer credit, manufacturing orders and capacity utilization, job vacancies, growth in average earnings, productivity, and unit labor costs all provide information to navigate the direction of economic cycles and investment strategies. As a leading practitioner in the field of socially responsible investing, Calvert analysts did not have tools similar to those available to traditional investment professionals. We understood the need for a broader array of socio-economic indicators. We also began to understand that there was little information available to understand the relationships between economic forces and societal or environmental impacts. This dilemma led Calvert into the field of quality of life indicators. How was it that we could analyze the environmental impact of a major chemical company, yet we could not ascertain the overall quality of the environment in which it operates? In the fast food industry, analysts had no indicators that would elucidate how further investments in an inherently low wage industry might impact broader socio-economic trends. What were the trends in national income distribution? What were the demographics of this traditionally low wage segment of the workforce? Was this growth industry contributing to increased national income disparities or simply providing a low rung step in the ladder of economic development for workers?”

Indeed, Calvert Group frequently finds it necessary to undertake such broader, quality-of-life research on issues of emerging concerns to their shareholders and society, for example, privacy, biotechnology and genetic engineering, impacts of commercialism and mass media on children. Similarly, the screening process (both positive and negative) of corporations for inclusion in Calvert’s mutual fund portfolios is constantly refined. For example, Calvert does not invest in companies that are involved in weapons production, nuclear energy, or out of compliance with environmental regulations, core labor standards or those involved in human rights violations or disputes with indigenous people. Calvert’s “positive screens” seek innovative companies that create social benefits, environmental remediation and are geared toward sustainable use of energy and resources. Indeed, as Calvert’s Social Research Department has broadened its research since Calvert Group’s founding 25-years ago, this huge knowledge base is increasingly sought after by outside entities including traditional financial firms, and increasingly, academia, government agencies, public officials and Civic Society Organizations (CSOs).


The Calvert-Henderson Quality of Life Indicators measure conditions and trends in 12 key socioeconomic sectors of the U.S.A. (See Figure 1) based on my Country Futures Indicators (CFI) model (Henderson, 1991, 1995), co-created by this author and the Calvert Group, Inc., Bethesda, MD. These Indicators were developed over five years under the guidance of Hazel Henderson, Jon Lickerman and Patrice Flynn, President, Flynn Research, Harpers Ferry, WV, www.flynnresearch.com and a team of experts in each of the 12 Indicator domains: Education, Jill Dianne Swenson; Employment, Patrice Flynn; Energy, John A. “Skip” Laitner; Environment, Kenneth P. Scott; Health, Constance Battle and Mary Jenifer; Human Rights, Alya Kayal; Income, Lawrence Mishel; Infrastructure, Will Mallett; National Security, Colonel Daniel M. Smith; Public Safety, Trudy A. Karlson; Re-Creation, Richard Peterson and Carrie Lee; Shelter, Patrick Simmons (biographies on www.calvert-henderson.com). US population/demographic data crosscuts through all 12 Indicators. Population increases show, by most forecasts, a rise of between 8 and 10 billion people on our planet early in this new millennium. However, the huge global gap between rich and poor still shows that per capita consumption of energy and resources in the US is some fifty times greater than that of some 2 billion of the world’s poor and undernourished. Thus, the most potent threat to the environment is waste and over consumption, with the US as the world’s chief polluter. The other Indicators show the potential for redesigning infrastructures, production methods using better information and how “greener technologies” can also benefit the world’s climate and ecology—as well as quality-of-life. Since 9/11/2001 there has been much interest in the National Security Indicator, which was predictive of the terrorist threat, as well as the Energy Indicator as the debate widened over the need for greater independence from OPEC oil, conservation and renewable alternatives.The 12 indicators were selected using many sources. Firstly, they are major areas of public concern as reflected in public opinion polls, the media, political campaigns, and debates over decades. Secondly, these domains are most often covered in many of the existing sets of local state, national, and international statistics we reviewed. Each one of our indicators allows revealing insights often invisible in highly averaged indices. In two separate polls on governmental reform by the highly respected Americans Talk Issues Foundation, Americans were asked if they approved or disapproved of the following proposal:”In the same way we’ve developed and used the Gross National Product to measure the growth of the economy, [we should] develop and use a scorecard of new indicators for holding politicians responsible for progress toward other national goals, like improving education, extending health care, preserving the environment, and making the military meet today’s needs.”In these two surveys in March of 1993, 72 percent of the American people agree that such quality-of-life indicators were needed. These results were verified in a debate format where an opposing view was offered in the second survey in January of 1994:”Opponents say that eventually economists will be able to calculate a single indicator of progress, a kind of enlarged GNP, that bundles into this money-based statistic our progress in all major areas including the economy, health, education, the environment, and so forth. This single number would be easier for everyone to use to rank ourselves against other nations and to judge the performance of our political leaders.”Only 22 percent of respondents found this opposing view to be convincing, and when the original question was asked again, support went up to 79 percent (Kay 1998).The Calvert-Henderson model presents the first systems approach to measuring quality-of-life (see Kenneth C. Land, SINET News, Feb-May 2000). The Indicators are unbundled for full transparency and public education, but are conceptually linked and interfaced in the overall model. Each Indicator domain is mapped by a sub-system model describing the relationships between institutional structures and how decisions flow through the sector to create outcomes (measured by the most reliable, official and academic statistics). (For example, see Figure 2, Calvert-Henderson National Security Model, and Figure 3, Calvert-Henderson Shelter model.) Each Indicator domain uses appropriate metrics and disciplines for its data-streams. Baseline evaluations of existing statistics and methods identify their changing relevance to each evolving socioeconomic sector and highlight statistical “blind spots.”The use of macroeconomic aggregation and weighting formulae is deliberately avoided, so as to minimize distortion and opacity. This systems methodology serves both the purposes of public education and the needs of asset managers in constructing socially-responsible portfolios according to social criteria and performance of companies in all of the 12 Indicator domains. Currently, all major data-streams are being updated, and are online at www.calvert-henderson.com. An important goal is to help improve the quality and breadth of existing national statistics.The Calvert-Henderson Quality of Life Indicators provide “the rest of the story” on the USA, its rapidly-evolving economy and technological sectors. Statisticians are reformulating GNP to reflect these new realities in re-categorizing software and many other services, which together now represent the largest sector of our “Information Age” economy. All the world’s industrializing societies are undergoing similar changes and restructuring, as they move from the earlier to the later stages of the Industrial Revolution. Part of this great transition is toward information-based economies. Here, knowledge, intellectual capital and the more intangible human and social assets replace manual labor and some of the tangible capital earlier economic textbooks called the “factors of production.”In today’s information age, most countries study the USA and are keenly interested in our changing economy and society – even more so in the aftermath of the terrorist attacks of September 11, 2001. Some see all these changes accelerating the “New Economy.” Others warn that this current era of globalization will bog down in a now-likely global recession. Much of the debate concerns appropriate methods for measuring productivity and inflation. For example, some analysts point to the high US growth rate in the late 1990s as the effect of cheap oil. Since then, oil prices tripled and then fell back due to the global slowdown. Business Week and other financial journals frequently editorialized that technological productivity and globalization could continue to deliver low inflation and full employment with budget surpluses and lower interest rates as well. Others were more cautious and predicted the bursting of the dot com bubble and the current recession. U.S. Federal Reserve Board Chairman Alan Greenspan became a believer in the increased productivity that information technology can deliver. Most forecasts expect low interest rates to bring the US economy back into positive territory by mid-2002. Yet Business Week editorialized (Dec. 10, 2001) that continued productivity growth, could actually undermine consumer spending by driving up unemployment (currently 5.7%) and holding down wage gains.This transition to information-based production and services is often accompanied by a deeper knowledge of natural processes and ecological assets and the services nature provides. Thus, many economies have also evolved toward more efficient use of energy and materials—and a shift away from fossil fuels and nuclear power (which create pollution and safety hazards). As we learn more about our living planet and nature’s productivity and design genius, our technologies change. They slowly reflect this new knowledge in biotechnologies and the harnessing of clean, inexhaustible sources of energy (from sun, wind, oceans, and biomass). With appropriate full-cost prices and regulations, societies slowly shift to recycling industrial materials in closed-loop production, waste reduction, re-manufacturing and reuse. An industrial design revolution is quietly under way toward more “weightless,” dematerialized economies.It is well recognized that macroeconomic statistics fell behind in mapping these fundamental shifts. A large part of the problem is that conventional economics and accounting still considers air, water, and nature’s purifying cycles “free.” Thus, only recently have textbooks begun to embrace full-cost prices. Only in the past decade have we seen the rise of environmental and ecological economics, full-cost accounting, and life-cycle costing for investment purposes. All this, together with the rise of social and environmental auditing, accounting for “intangibles” and intellectual property—and the many attempts to overhaul GNP and GDP—represents the greatest revolution in accounting and statistics since the invention of double-entry bookkeeping. Calvert and this author support the Global Reporting Initiative (GRI) to extend company auditing to measure a triple-bottom-line. (See Figure 6, CERES Reporting Initiative).As you are aware, economists K. W. Kapp, Kenneth Boulding, Barbara Ward, E. J. Mishan, and E. F. Schumacher, in Europe, spearheaded these new approaches, as well as Nicholas Georgescu-Roegen and his student Herman Daly, Richard Estes, and others in the US, including this author. On the conceptual foundations of these early economics innovators, a host of new efforts to redefine human development, wealth, and progress emerged in the 1980s and 1990s. David Morris of the Institute for Local Self-Reliance produced the Physical Quality-of-Life Index (PQLI) for the Overseas Development Council; this author promulgated the Country Futures Indicators (CFI) approach in 1986. Herman Daly and John Cobb created the Index of Sustainable Economic Welfare (ISEW) with Clifford Cobb in 1989. This index deducts from GNP many environmental and social costs, arriving at a significantly lower “net GNP.” This index has been adapted widely in Europe, Australia, and the US as the Genuine Progress Index (GPI) since 1995. Other approaches include the Fordham University Index of Social Health devised by Marque Luisa and Marc Miringoff, and The Wellbeing of Nations by Robert Prescott-Allen.The Clinton Administration attempted to “green” the US GDP by means of an Integrated Environmental and Economic Satellite Account (IEESA) developed by the Bureau of Economic Analysis (BEA) of the US Commerce Department in 1994—to mixed reviews. The Congress directed the BEA to halt this work, and charged the National Research Council to review the entire issue. In late 1999, the Council issued its report, Nature’s Numbers, urging that the BEA be funded to restart this effort. The World Bank in 1995 issued its own Wealth Index, which redefined “the wealth of nations” in significant ways. The Bank now defines 60% of this wealth of nations as “human capital” (social organization and human skills and knowledge), 20% as environmental capital (nature’s contribution), and 20% as “built capital” (factories, finance capital). A revolution has begun in the mainstream economics profession, with many of its best minds—Joseph Stiglitz, formerly the Bank’s chief economist, Harvard’s Jeffrey Sachs and Paul Krugman—embracing pieces of the new thinking. The most influential, widely used and quoted new formula is the United Nations Human Development Index (HDI), which has spawned many national versions.

The most pressing methodological debate over such new measures of wealth progress and human development has concerned the extent to which such broad new areas of concern as human rights, health, education, environmental and overall quality of life can be captured using money coefficients and macroeconomic models. Such methods currently weight all data from different economic sectors into one index. Many, including this author, believe that such high levels of aggregating all these “apples and oranges” into one index is inappropriate and often confusing. Another issue concerns the use of “satellite accounts” for environmental and social data. This designation indicates lesser value for such data. Such diverse areas of quality-of-life deserve their own metrics—those most appropriate within the diverse disciplines that study such fields. For example, money coefficients cannot quantify human rights, air and water quality, recreational satisfaction, education, health, public safety, or national security. Money measures and percentages of national budgets can give clues—but are often simply input data—rather than measuring outcomes and results. Some approaches employ subjective opinion surveys of individual “satisfaction”. However, since many citizens are not fully aware of environmental threats, toxic wastes or the extent of other threats to public health and safety, such survey methods may be unreliable.

The systems approach used in the C–HQLI requires multiple metrics to cover the 12 aspects of US society. In each area, a model links all major factors and processes, providing a roadmap of how decisions flow through various institutional structures to create outcomes. Such systemic models help identify why in each area, the US has succeeded or fallen short in achieving its stated policy goals. Many Indicator areas show how throwing money at ill-defined problems such as “crime” or “national security” or at specific diseases, has led to wasted or misdirected resources, both public and private. These Indicators show how each sector of the US economy contributed to, or in some cases, diminished overall quality-of-life. The “holes” in the statistical pictures and where data-gathering needs new focus are identified. These 12 “unbundled” Indicators with the use of visual models come together as a broader pattern. This systems approach allows display of this wealth of diverse data rigorously—without the loss of detail which plagues any single Index approach. This systems and visual approach will be emphasized in the forthcoming website, which will allow easy access to the underlying data in each Indicator model. Each Indicator is summarized below.


The field of US employment and work changed immensely during the 1990s. From a recession in the early 1990s, the US in 2000 had the lowest (4.2%) unemployment recorded since the 1950s. In October, 2001, the NBER declared officially that the US had been in a recession since March. The September 11th terrorist attacks further shocked the economy and by November added 1.2 million layoffs, bringing unemployment back up to 5.7%. Yet the low unemployment of the late 1990s caused a rethink of the NAIRU used by the Federal Reserve Board in setting interest rates. A NAIRU under 5.5% was thought to be inflationary. Today, the US economy is still experiences low inflation—due, many say, to the “New Economy” factors. While the economic stimulus of tax cuts and additional spending on homeland security will boost employment, lag times will delay these effects in various sectors. In spite of the bursting of the bubble on Wall Street, the Internet and information technology, arguably has raised overall US productivity. The Employment Indicator model also shows that a large but not well-measured percentage of productive work is unpaid. This unpaid work in caring for elders, the sick and children—in home or volunteer organization settings—is unaccounted for in the GNP. Many organizations in the nonprofit, civic sector of US society now call for full recognition of the value of this caring work. Some call for housework and parenting to be paid, through statutory pension benefits or in marriage contracts. This area of concern will likely grow as both parents in families are in the paid workforce. The “family values” debate encodes many new dilemmas faced by parents as they juggle two jobs, child and elder care as U.S. population ages. Worldwide, the United Nations HDI in 1995 estimated that unpaid work by the world’s women was worth US$11 trillion and that by men another US$5 trillion. This US$16 trillion total was simply missing from the 1995 world GDP of US$24 trillion. In addition, this Indicator tracks the growing ranks of the self-employed, part-timers and the composition by gender, ethnicity, and age of the US workforce. The promise of the Industrial Age for more leisure—as machines and automation took over production tasks—did not materialize. Today, Americans work longer hours than their counterparts in Europe and Japan. Yet, there is much debate over the statistics on work and leisure, as cross-referenced in the Indicator on Re-Creation.


This Indicator dissects conventional macrostatistics to reveal important information concealed by the averages. Although US incomes at the low end have been essentially flat for over a decade, there were signs of increase due to the “New Economy” phenomenon in 2000. The 2001 bear market on Wall Street and softening US economy resulted in little increase in unemployment until the September 11th attacks. Yet the gap between rich and poor Americans is still historically high—an issue that does not bode well for any democracy. Other measurement issues include the extent to which technology and globalization are squeezing the incomes of less skilled Americans and are related to the Employment and Education Indicators. A 1995 national survey by the Merck Foundation and the Harwood Group found 28% of Americans had opted for lower incomes and moved to rural communities in order to improve their quality of life. Clearly, values are changing and new trade-offs are being made between more money income vis-à-vis more time, tranquil and less-polluted environments—all made possible by home computers and the Internet. As official statistical cameras are re-focused, the Income Indicator will add new data-streams.


This Indicator dissects US macroeconomic data to reveal a “good news, bad news” picture. The American Dream of home ownership has never been so fulfilled—with a record 66.3% now owning homes. A majority of Americans are well housed with over two-thirds in affordable, physically adequate, uncrowded housing. The bad news is that shelter deprivation still exists in the US. Some 5.3 million low-income renters are in distress and an additional half to three-quarters of a million Americans are homeless at any given time. The US savings rate hovers at zero – but this statistic is also under challenge. Mortgage debt stands at a record $5.4 trillion, but with interest rates at record lows, many homeowners are re-financing – often to consolidate their overall debts. The current rock bottom interest rates make mortgages more accessible, but consumer confidence and job losses also make prospective homeowners wary. These statistics seem to be a reflection of the national poverty gap—shown in the Income Indicator. The state of shelter in the US also affects opportunities for social mobility and education and thus is related to many other Indicators, including those on Employment, Health, and Environment.


This Indicator unpacks macrostatistics to reveal an ongoing debate: to what extent the US has been overlooking the vital role its infrastructure plays in undergirding its economy. Historically, infrastructure referred to highways, railroads, harbors, bridges, aqueducts, public buildings, dams, and the like. Industrial societies evolved airports, communications systems, energy supplies, water, and other utilities. Today, infrastructure includes education, research and development, computerized “backbone” systems, and all taxpayer-supported systems used in commerce and on which large sectors of any economy rely. A recent trend since September 11 has been the revival of Congressional spending on homeland security, which may lead to a re-vamping of railroads and added spending on securing bridges, dams and other infrastructure. Another trend picked up by this Indicator is that of the privatization of growing areas of formerly publicly-owned infrastructure, including electric utilities, phone, water, and other services. After the 2001 electricity blackouts in California, and the collapse of Enron’s energy-trading systems and its impending bankruptcy, a re-evaluation of deregulation of such vital infrastructure is underway. Publicly funded infrastructure investments used to be “expensed” items in GDP accounts. As of 1996, a more realistic asset budget in GNP now accounts for such investments as “assets”—since they often have a useful lifetime of 50–100 years or more. This accounting change contributed much to the US budget surplus. Canada changed its GNP to include such public investments as assets in 1999, thereby reducing its deficit by Can$50 billion. Japan could much improve its prospects by adopting such budgeting reforms—as could European Union countries. This Indicator is related to most other Indicators, as infrastructure is the key to energy efficiency, whether cities sprawl over virgin lands and farms or whether older or vacant land in our cities is infilled. These factors in turn relate to environmental protection, pollution, housing, education, public health and safety.


This Indicator is a key to the overall efficiency of an economy. US GNP has been growing with less energy input in the past 25 years, since the first Organization of Oil Exporting Countries (OPEC) oil embargo in 1973. But the US still lags behind Japan and Europe—using almost twice the energy they use per unit of GNP. This keeps the US vulnerable to the Middle East and OPEC which supplies some 50% of our oil and keeps us in an uncompetitive position even as the Internet-based “New Economy” grows. US reliance on low-fuel-efficiency cars and fossil fuels decreases national flexibility. Entrenched sectors of the older industrial economy oppose the shift to new energy sources, cleaner fuel cell or electric cars. All these issues of restructuring the US economy came to a head in the debate over climate change. The fossil fuel industry lobbied hard and spent millions on advertising campaigns to oppose the 1997 Kyoto Agreements to reduce fossil fuel carbon emissions. President George W. Bush has not yet offered his promised alternatives to the Kyoto Protocols he refused to implement in early 2001. His National Academy of Sciences study confirms the role of humans in increasing CO2 levels in the atmosphere and their effect on global warming. The scientific evidence now overwhelmingly points to the need to reduce such emissions. Many analysts and dozens of new solar and renewable energy companies now believe that the fossil-industrial transition to the Information Age will usher in a prosperous, profitable economy based on renewable resource use and deeper knowledge. Energy efficiency means less waste, higher, cleaner profits, more comfortable homes, communities and travel with less pollution. The transition from here to there can be followed in this Indicator, as traditional economic models of “efficiency” move into alignment with physical realities of thermodynamic efficiency.National SecurityThe new war on terrorism has changed the focus to so-called “asymmetrical” threats: where suicidal individuals armed with box cutters can turn passenger planes into explosive missiles. Thus, 21st century threats include bioterrorism, suitcase bombs and cyber-warfare. All this calls for even more fundamental changes in national security policy. The US public’s view of “national security” has been changing for over a decade, as revealed, for example, in Americans Talk Issues Foundation surveys and those from the University of Maryland’s Center on Public Policy Attitudes. Even before the end of the Cold War, the US public was identifying global economic competitiveness and environmental pollution as issues of national security—beyond traditional military views of “defense.” The National Security Indicator model reveals how Americans, the Congress, the Administration, and a host of institutional players actually shape our current national security policy. This identifies other potential lags in the military view of national security exemplified by the debate over missile defense and its feasibility or relevance in a world of asymmetrical threats. These relate to prevention of threats and conflicts. These must be addressed via intelligence, diplomacy, treaty-making, surveillance, and verification—most often involving allies and multilateral agencies including the United Nations (the only global organization of countries that can convene all the parties). Short-changing such anticipatory, preventive policies inevitably leads to more drastic, expensive military interventions—such as those that might have been prevented in Bosnia, Kosovo, East Timor, and other trouble spots. Yet the Indicator shows a growing imbalance between military strategies and programs vis-à-vis an alarming drop-off in preventive activities—including deteriorating US Embassy facilities, cuts to State Department diplomatic activities previous pull-backs from international peacekeeping and surveillance operations with US allies. These policies have been revised since 9/11. The United Nations was paid $580 million of the US arrears in paying UN dues. The public debate about “isolationism,” “unilateralism” and the changing meaning of “national sovereignty” as well as globalization will continue for years to come. The national security is fundamentally linked to all other areas and Indicators of any nation’s quality of life.Health

The Health Indicator begins by exploring why the US provides more health-care services at higher costs per capita than any other country in the world. Yet, after the anthrax attacks, the US public health services were revealed as woefully under-funded and wholly inadequate to their new tasks in an age of bioterrorism. Some funding increases have passed the Congress, but are still viewed by health professionals as a fraction of what is required. The enormous health sector of our economy is also becoming a top focus of national concern since it delivers only modest improvements in health status in some areas and none in others. Of growing concern are the over 40 million Americans who have no health insurance. Meanwhile, the National Bureau of Economic Research (NBER) released a working paper, which finds that better health boosts a country’s GNP. Authors David Bloom and JP Sevilla analyzed data from 104 countries and found that a one-year improvement in a country’s life expectancy contributes a 4% increase in its economic output. (Dec 3, 2001). This enormous sector of the economy is becoming a top focus of national concern—since it delivers only modest improvements in health status in some areas and none in others. Many Americans demand a “patient’s Bill of Rights” to hold health maintenance organizations (HMOs) and insurance companies more accountable for decisions over patient treatment – supported by both presidential candidates in 2000. Newer worries concern the need for public health clinics nationwide, where uninsured people who may have been exposed to pathogens can be quickly tested and evaluated so as to limit epidemics. The Indicator offers a model of the current US healthcare system, which helps to clarify a systemic set of issues. Health is being redefined beyond the medical intervention model. Today, Americans are focusing on prevention, stress-reduction, and lifestyle choices. Beyond terrorism, tobacco and alcohol use, and even the availability of guns, are issues entering the public health debate. More Americans now consult “complementary” and “alternative” health providers than visit conventional medical doctors and facilities. This is a paradigm shift, which is restructuring the entire medical–industrial complex and its technocratic, bureaucratic approach, which represents some 14% of US GNP. New statistics are needed as the US integrates these two very different approaches to health. An October 1999 study in the Federal Reserve Bank of New York’s Economic Policy Review cites the effects of urban poverty. Fifteen-year-old black and white males’ life expectancy rates were compared in several cities. In poor black areas of New York City only 37% were expected to live to age 65. In Detroit, the figure was 50%. Poor white 15-year-olds in poverty areas of Detroit and Cleveland did a little better. In Detroit, 60% were found likely to live to age 65 with 64% likely in Cleveland. Average life expectancy for all US whites is 77 years and for US blacks 62 years. The Indicator shows such gaps, which also relate to similar data in the Income, Shelter, Safety, Education, and Human Rights Indicators.


The Education Indicator model gives an overview of US issues over structural educational reform, school vouchers, “charter” schools, home schooling, and those concerning the shift to today’s globalized information-based economy. Since 9/11/01 there have been many calls to “globalize” the curriculum to prepare students for a globally-interdependent, multicultural world. Knowledge is now widely recognized as a key factor of production. The World Bank and other multilateral institutions now agree that investments in education (particularly at preschool and kindergarten through 12 levels) are the new key, along with investments in health, to economic development. Statistics, particularly in macroeconomic indices, are lagging far behind this new paradigm of economic and human development. Nothing is changing US business and academic institutions faster than the new definitions of capital—as human and intellectual capital. As many new Internet-based e-commerce businesses know, a company cannot “own” the part of its knowledge base that resides in the heads of its employees. The rise of stock options, partnerships, and employee stock ownership plans (ESOPs) are all related to this new evaluation of intellectual capital—on which all technical and social innovation is based. Today, more than ever, education is a basic human right—in many other countries as well as in the US. Furthermore, levels of education will drive all the world’s economies toward development—depending how they structure and invest in educating humanity’s most precious resource: the world’s children.

Public Safety

This Indicator maps a rapid evolution in the US debate about this aspect of quality-of-life. In October, 2001, the US instituted a cabinet-level Office of Homeland Security. This will elevate the public’s awareness about all aspects of public safety and alter the nature of law enforcement. Information-age crimes, from money-laundering, Internet fraud to terrorists and global mafia, now affect domestic public safety – a new challenge for statisticians. The view that safety was a personal affair and that risk-taking was a private choice has evolved as society became more complex. While individuals are still largely responsible for their behavior, today we live in an interdependent world. Many risks of daily life (for example, exposure to toxic wastes, gun violence in schools, car and highway design, risks in foods and other products) are involuntary and often unavoidable. Thus the Indicator also captures these new concerns in public safety—and links today’s risks to health, education, and cultural factors. Crime statistics in the model and the tragedies of US gun violence are seen in this larger setting. This systemic view provides insights for individual and corporate risk-reduction and may help rethink views on improving public safety, and its measurements.

Human Rights

This Indicator views the state of human rights in the US in broad areas: fundamental rights to the security of person; the US Bill of Rights and Amendments to the Constitution (including freedom of expression, religious freedom, right of assembly; voting rights). Beyond these basic rights, the model embraces an evolving international view embodied in the Universal Declaration of Human Rights, which the US signed along with many other countries over fifty years ago. After the terrorist attacks, legislation was signed giving law enforcement officials sweeping new powers – many of which are opposed by human and civil liberties groups, thus creating new coalitions across the US political spectrum. The Indicator covers US incarceration data (among the highest in the world), the death penalty, prison labor, racial/gender discrimination, mistreatment of prisoners and aliens, as well as voting rights, participation in politics and the growing influence of money and special interests. Today, human rights have become a keystone of US foreign policy—largely due to the efforts of former President Jimmy Carter. A crucial issue is to what extent the sovereignty of a nation is no longer absolute in cases where despotic dictators violate the human rights of their own citizens – an issue being debated anew in the global war on terrorism. Such clashes were evident in the cases of Bosnia, Kosovo, Rwanda, and more recently in the breakaway Russian province of Chechnya and in Afghanistan. These and other human rights issues are also of great concern in other countries. In Europe, Japan, Canada and many other countries, economic, cultural, and social rights (to education, social participation, health care and leisure time and to social security) are included. Another evolution concerns the embracing of women and children in the definition of human rights—now widely recognized—if not fully achieved. This Indicator is crucial to quality-of-life in the US and worldwide.


This Indicator seeks to embrace the interactions between human society, economic processes, and humanity’s life support systems: the natural world, its resources and other species. Naturally, such a task is too enormous to do more than find within the model some key “surrogate” indicators as proxies for such a vast area. The burgeoning field of environmental indicators and sustainability criteria area drawn upon, including data on planetary ecosystems, the crucial role of biodiversity, human effects on the ozone layer and climate. The Environment Indicator model recognizes these broad concerns, but pays attention to indicators closest to the lives of most US citizens. Air and water quality and attainment of EPA standards are the initial focus, since people cannot survive without acceptable quality air and water. The National Research Council’s 1999 report, Nature’s Numbers, also notes that “Greater emphasis should be placed on measuring actual human exposures to air and water pollution” (Recommendations 4.3 and 5.9). Through these lenses one can understand better the causes of their degradation and pollution—and the many steps needed to reverse these threats. The systems approach reveals that many other domains of quality-of-life, infrastructure design, energy use, shelter, health, employment, public safety, and national security all impinge on the environment and life support systems—for better or worse.


This Indicator goes beyond the material aspects of the US and focuses on how Americans re-create themselves. Many attest to how the terrorist attacks caused them to reflect deeply on their lives, their meaning and purpose. The Indicator maps extraordinarily diverse forms of recreation in the US—from volunteering in community projects to helping preserve wildlife and serving the poor, to attending concerts, museums, or enjoying bowling, hunting, and fishing. The model traces how the US organizes and spends private and public resources on such recreational activities. The Indicator embraces self-improving experience (from religious, spiritual pursuits to other forms of self-development), patronizing the arts, physical sports and fitness; do-it-yourself crafts, gardening, home-improvement, hobbies, vicarious experience (TV, video games, Internet), socializing and home entertaining, travel and tourism (now the world’s biggest industry) to games of chance, betting, and chemical escape (alcohol, tobacco, and drugs). This Indicator offers a panorama of these evolving activities of US inhabitants, which together form the largest and fastest-growing sector of the US’s services-dominated economy. Statistical and methodological debates abound on the size and shape of this emerging “Attention Economy” (Henderson, 1996) and its implications concerning work and leisure time. The rapid evolution of the entire field of self-development and re-creation augurs additional social and political change. Today’s drive for self-development—an essentially spiritual need—is now spilling over into US material lives—in the growth of socially responsible investments, and in communities opting to honor their local past and culture by building museums and art galleries. Over 80 million Americans volunteer at least 5 hours a week to their communities and the nonprofit, voluntary sector now stands at 7% of GNP. A poll cited in Business Week (November 1, 1999) found that 78% of Americans say that they feel the need in their lives to experience spiritual growth—up from 20% in 1994. The Re-creation Indicator will track such changes. As more governments and research groups in the private and civic sectors promulgate such reforms in national accounts and macroeconomic statistics, corporations and national policies can be steered toward protecting life support systems and more equitable, transparent, and sustainable societies.

The C-HQLI will be continually reviewed, updated and reformulated as US society restructures and evolves. We hope to benefit from expert feedback from the academic community, government agencies and statisticians’ new measurements in all of our 12 Indicator domains. The initial responses from all sectors have been favorable and the many comments suggest that the C-HQLI is being used widely as a public information and policy tool – particularly at state and local levels. Our decision not to release any regular media-friendly single number analogs to GDP releases was taken to prevent distortion and maintain a systemic, holistic view. Meanwhile, we continue to present C-HQLI at numerous professional and academic conferences in the USA, Europe, Latin America and Asia, as well as in UNESCO’s forthcoming Encyclopedia of Life Support Systems. The C-HQLI is now online at www.calvert-henderson.com and its Advisory Board includes many of the distinguished social scientists, experts and practitioners in the fields of quality-of-life and sustainability indicators, including Lester Brown, Chair, Worldwatch Institute; Kenneth Land, Duke University; Jeffrey Madrick, editor Challenge and Indicators, New York; William McDonough, architect, Charlottsville, VA; Richard Ottinger, Dean Emeritus, Pace University, New York; David Swain, Jacksonville Quality Indicators for Progress, Florida; Mathis Wackernagel, author Ecological Footprint Analysis, Margaret Wheatley, author Leadership and the New Science and Sandra Zagon, Manager Quality-of-Life Indicators, Canadian Policy Research Institute.


List of Figures
Figure 1: Calvert-Henderson front cover
Figure 2: Calvert-Henderson National Security Model
Figure 3: Calvert-Henderson Shelter Model
Figure 4: Post navigation