The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [24]
SHOULD GOVERNMENTS TRY TO INCREASE HAPPINESS?
As just discussed, the balance of the evidence is that monetary incomes and material goods do increase happiness; and there is no strong empirical evidence that rich Western societies have reached a point where people are sated. Happiness seems more directly related to many noneconomic variables, although having a job is key as well. Being married, holding religious beliefs, being in good health, and enjoying political liberties are strongly correlated with being happy—something in that list, perhaps, for those of both liberal and conservative political views.
Significantly, there is good evidence that both freedom and social cohesion make an important contribution to happiness.55 Much of the “happiness” advocacy concentrates on the empirical evidence regarding levels of income, and consequently on policies to force people out of the rat race. But this emphasis flies in the face of the full breadth of the evidence, and to the extent that it ignores individual freedom is dangerously paternalistic. What equips expert economists and psychologists to manipulate other people’s work and spending patterns, and what legitimacy do they have in trying to do so? This concern is increasingly being flagged by some of the economists working in this area.56
As we’ve seen, the psychological research shows that each individual has a genetically gifted baseline level of happiness; that we adapt reasonably quickly to most kinds of changes in circumstances, but not all; that happiness is the product of a process, of engagement in an absorbing and satisfying activity; and that this sense of “flow” needs to be informed by the meaning or purpose we as individuals find in life, rather than anything we have to do because others tell us to. Our individual happiness depends on others. As social animals, our individual sense of purpose will almost always lie in the wider society. It also seems we are happier if our community or society has a purpose too. The pioneers of positive psychology seem to agree that this is lacking now in the rich Western societies. They identify signs of disillusion or “anomie,” which is consistent with rising rates of depression and suicide. Although happiness is rising as economies continue to grow, some indicators of distress are on the increase too.
There is a clear conclusion: economic growth contributes to happiness, and GDP growth should remain a policy target. Governments should make a special effort to ensure that growth delivers jobs, to keep unemployment low, and to ensure people are not left unemployed for years—as all too many have been due to the transition from traditional industries to services and higher-tech industries. Many governments pay lip service to ensuring employment is high without taking the measures needed to deliver on their promises. Sometimes particular beliefs about the jobs market get in the way—for example, the view that young people should not have a lower minimum wage than older and more productive people, or that unions should concentrate on delivering higher pay for their members rather than creating new jobs for nonmembers. Sometimes governments do not want to commit the effort and resources needed to find people jobs and prepare them for the work; it can be achieved but it’s a long and slow haul that doesn’t fit well into political timetables.
The immense effort that has gone in to measures to replace GDP is irrelevant, resting as it does on the incorrect conclusion that there is no link over time between an economy getting richer and getting happier. There’s no doubt that in a number of ways GDP is a flawed statistic as a measure of welfare. But any replacement would be flawed too, not to mention much harder for many countries to collect and measure; at least with the familiar GDP statistics we know what we’re getting.
At the same