The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [15]
What this discussion highlights is that thinking about how to improve social welfare isn’t a matter of choosing between increasing economic growth or increasing well-being, in which case only selfish or philistine materialists would choose to focus on money rather than happiness. Economists don’t believe that social welfare only depends on money incomes or economic growth. It would be equally restrictive and narrow to believe that social welfare depends only on happiness. So the first premise of those urging governments to focus on happiness is flawed. Growth alone is not enough for a good society—but neither is happiness alone.
DOES GROWTH INCREASE HAPPINESS?
The second step in the argument of the “happiness” advocates is that happiness is not increased by economic growth. That too is incorrect.
There has been a lively economic debate about claims that there are no links between growth and happiness.12 Some of the claims in this literature are supported by good evidence; others, contrary to popular opinion, are not proven by the available data. On the contrary, there is good evidence that growth and happiness are linked. There is also a growing body of psychological evidence about what “happiness” can sensibly be taken to mean when it comes to drawing up economic and other policies. After all, there are (and surely ought to be) limits to the scope for governments to affect our deepest emotions such as falling in love or experiencing religious joy—or even being happy. Like precision about the links between economic growth and happiness, being specific about what kind of “happiness” we mean also sharpens the focus when it comes to policies.
But first, let’s look at that widely believed but empirically doubtful claim that we’re no happier for all the growth in GDP there has been in modern times.
Economic growth has had such a huge impact on everyday life that on the face of it it’s strange that anyone should doubt its benefits, especially when you think about the changes it has brought about over a period of decades rather than years. Yet despite the amazing increases in prosperity delivered by capitalism, and the benefits economic growth brings for people’s health and well-being, there is as we’ve seen a long and deep-rooted cultural heritage of suspicion about money, or the desire to amass money. This suspicion is shared by most religious traditions. Consequently the ownership of great wealth is almost always believed to bring great responsibilities. We applaud the very rich who, like Bill Gates or Ted Turner, give away large amounts of their wealth through charitable foundations. In some societies the “big man” is expected to help out his extended family or social group and display lavish hospitality. Few are the businessmen in literature or drama, and those there are tend to be, like Trollope’s Melmotte or Fitzgerald’s Gatsby, either flawed characters or outright villains.13
Yet, of course, there always have been some individuals who get rich, and we admire that, or aspire to it, too. Almost everyone can think of something they could buy or do if they had more money. The rich fascinate us, and we pore over them in magazines or on TV or online, part of the cult of celebrity. Sports and pop stars are rated by their earning power. The praises of entrepreneurship and wealth creation are loudly sung, and so widely accepted as desirable that there are popular TV shows about making money in business or getting rich via the stock market. Above all, politicians the world over boast about delivering economic growth when they can, or blame others when they can’t, because a strong economy wins votes.
Figure 2. Consumer dreams.
There would certainly be wide agreement that more than 4 billion of the world’s 7