Governments and other public institutions should look at the value of people rather than economic productivity when measuring social progress, President Michael Higgins (pictured) has said.

Speaking at Dublin City University last night, Mr Higgins said he strongly believed that a new approach, not focused on the markets and their values, was needed when looking at how society should be measured, the Irish Times reports.

His comments come days after the UN released its second annual World Happiness Report, which showed that Ireland had slipped from 10th happiest country in the world to 18th.  

The report uses six measures to calculate happiness; life expectancy, perceived national corruption, freedom to make life choices, generosity of fellow citizens, having someone to rely on in times of trouble and GDP per capita.

The report showed that Ireland did well on the generosity measure, and on the measure of having someone to rely on.

The report said that there was now “a rising worldwide demand that policy be more closely aligned with what really matters to people as they themselves characterise their lives”.  

“More and more world leaders including German Chancellor Angela Merkel, South Korean President Park Geun-hye and British Prime Minister David Cameron, are talking about the importance of well-being as a guide for their nations and the world,” it said.  

Mr Higgins said that, at the end of the day, people were not the “dependent human variables of something we do not understand”.

“It is not an exaggeration to say that we live in times where economic worth is primarily seen as a matter of productive capacity,” he said.

“This is reflected in the use of measures for growth as the principal measure of economic health, even if that growth does not impact on the levels of unemployment, poverty and inequality.”

He said it was important to make sure that “all institutions allow for truly democratic deliberations on economic policy choices, that no particular sector gets preferential treatment in the name of a narrow conception of wealth, and that our media do not foreclose political debate on economic matters.”

During a speech entitled “Toward an Ethical Economy”, Mr Higgins said the developments in the world in the last few years showed that economics should not be regarded as a definite science, but rather a craft.

He criticised auditors who followed the rules and protocols set down for them ahead of the economic collapse as if they were always correct rather than speaking out about the issues they saw that ultimately bankrupted the country.

Mr Higgins said that when he looked across self-regulated professions in society, he saw that the trust placed in them by the people they were supposed to be supporting was “broken”.

The President said the best protocols, procedures and codes of conduct were derived from an understanding of the basis of ethics.

In order to better this understanding, he suggested philosophy be taught in schools, as it “could facilitate the fostering of an ethical consciousness in our fellow citizens”.

As Europe faces into elections next year, Mr Higgins said he hoped politicians engaged with issues that are widespread across the continent such as unemployment, inequality and poverty.