PROSPECT by wulinqing

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									PROSPECT
Issue 133, April 2007


Against Happiness
With governments struggling to deliver on existing commitments is it sensible to
make them responsible for something as complex as personal happiness?
Moreover, much of the happiness data is faulty and where it isn't it points to
conservative measures.

Paul Ormerod
Helen Johns

Over the past 40 years, GDP per head has risen sharply in western countries; but the average level
of happiness reported by individuals has shown little or no increase. This apparent failure of
economic growth to make people feel happier is one of the central claims in contemporary
political debate.

From this premise, prominent happiness advocates, such as Richard Layard in his book
Happiness: Lessons from a New Science, argue for big policy changes. One is that taxation should
be made more progressive to reduce income inequality because, it is claimed, it is relative rather
than absolute levels of income that affect happiness. Further, it is proposed that the nation's
happiness should be measured regularly, just as GDP is, and used to guide policymaking.

We take issue with the validity of much of the happiness research on which such
recommendations are based. We do not argue that the wider objectives espoused by happiness
advocates (who are mainly on the centre left of politics), such as reducing inequality, are in
themselves invalid—rather that happiness research offers no basis for such propositions.

There are aspects of happiness research that have secure scientific foundations. These, however,
imply policies that are usually thought of as traditional rather than liberal. In particular, there is
strong evidence that marriage and the nuclear family are important determinants of individual
happiness.

There is now a large amount of academic material on happiness (a term often used
interchangeably with "life satisfaction" or "wellbeing"). The 1990s saw a big increase in research
into the concept, with over 4,000 articles published by the year 2000. Since then, the stream has
become a torrent.

Nor is the topic being neglected by the government. Its Sustainable Development Commission is
promoting research on "how policies might change with an explicit wellbeing focus." And a cross-
government wellbeing indicators group is developing a set of wellbeing measures for informing
policy (to be unveiled this summer).

The idea of focusing policy explicitly on happiness is clearly touching a chord. This stems from a
reasonable assessment that welfare is derived from a great deal more than material goods: from
the quality of one's personal relationships, from feelings of common cause and shared experience
with others, from enjoyment of nature and from good governance, among other things. However,
it is one thing to value happiness; quite another to expect the happiness of society as a whole to be
measurable or to respond to policy intervention in understandable ways.

The seminal article in happiness research was published by Richard Easterlin of the University of
Southern California in 1974. He claimed to show that average happiness in the US had remained
at the same level over the period 1946-70, even though income per head had doubled. (The lack of
any marked increase in average happiness as incomes rise seems not to be confined to the high-
income countries of the west. A sample of 15,000 individuals interviewed by Gallup in China
shows no increase in reported life satisfaction between 1994 and 2005, despite an increase in real
income per head of some 150 per cent.)

These results are partly a function of methodology. Happiness is often measured using a three-
point scale, where (3) equates to "very happy." Average happiness can only increase when there is
a net flow of people from lower to higher categories in the scale, and higher levels than (3) are not
allowed. Given that the average score in such surveys tends to be around 2.2, many respondents
must be answering (3). So even if they were reaching higher happiness levels over time, the survey
could not track this. Furthermore, small improvements in welfare would not be enough for most
people to swap "fairly happy" for "very happy." So the tendency for such surveys to record only
weak increases in reported happiness over time is partly an artefact of measurement.

But there are much more fundamental doubts about what happiness data means. In policy
discussion, the devotees of happiness research focus on the lack of correlation between happiness
over time and GDP, or income, per head. Yet there is a long list of other variables that might be
thought to contribute to human wellbeing but that are also not related to happiness over time—
for example, public spending. After allowing for inflation, public spending in the US almost
doubled between 1973 and 2004. In Britain, it rose by 60 per cent. Yet in both countries, recorded
happiness increased by a mere 2 per cent. If we were to rely on happiness data as a basis for
policy, what is the point, one might reasonably ask, of all those schools and hospitals?

Leisure time, certainly in Europe, has increased. Between 1979 and 2002, the OECD shows that
average annual working hours in Britain fell by 6 per cent. In west Germany the fall was 16 per
cent; yet happiness fell by 5 per cent over this period. Crime in European countries is much
higher than it was 30 or 40 years ago, yet this has had no discernible negative effect on happiness.
And since the early 1990s, crime has fallen noticeably in both the US and Britain, after the sharp
rises over the previous decades, yet these swings also do not register in the happiness data.

In the US, life expectancy for white Americans rose from 72.0 years in 1972 to 78.0 in 2003. For
African-Americans, the increase was even greater, from 64.6 to 72.7, representing not merely an
absolute rise, but a narrowing of the gap with whites. Gender inequality, as measured by the
median earnings of women compared to men, has fallen sharply. In the US in 1972, women's
earnings were 58 per cent those of men, a figure that rose to 75 per cent by 2003. But the
happiness time series is unmoved by these dramatic and desirable social changes.

There is also no connection with the level of income inequality, a factor that Layard and others
argue strongly affects happiness. The US has seen the biggest increase in inequality in recent
decades, yet if it is affecting the wellbeing of individuals, it is certainly not being registered by the
happiness data. Using the standard measure of income inequality, the Gini coefficient, the data
shows that inequality has increased throughout the period, while happiness has both risen and
fallen.

So if measured happiness shows that decades of economic growth have made no difference to the
welfare of western citizens, the same could equally be said of political labours of all descriptions.
Public expenditure, leisure time, crime, gender inequality, income inequality—none of these are
in any way correlated with measures of happiness over time. And although measured depression
has risen in the postwar period, this is also not reflected by a downward trend in the happiness
index. So one could conclude either that the attempt to improve the human lot by social and
economic policy is futile or the data is not telling us anything of value.

Why may the data be telling us little of value? Stepping aside from economics for a moment,
consider the closing scene of George Orwell's 1984. Winston Smith, the central character, finally
achieves happiness. He loves Big Brother. The years of attention devoted to his mental health by
O'Brien have paid off. Smith is finally content and reconciled with the society in which he lives.

Of course, this is fiction, but things almost as strange have actually happened. The death of Stalin
in 1953 created mass grief throughout the Soviet Union. Contemporary accounts make it clear
that this was a genuinely spontaneous outpouring of emotion. The fictional happiness of Winston
Smith and the apparently genuine happiness of many of the citizens of the Soviet Union under
Stalin suggest that happiness cannot be separated from its social context. People adapt to their
circumstances, and it is possible to be happy in very different contexts.

This view is confirmed by some of the more serious research within happiness economics.
Easterlin himself, the doyen of happiness research, recently provided evidence that there is
complete adaptation to levels of income over time. In other words, although an increase in income
does usually lead to a rise in happiness, the feeling is only temporary, and people adapt rapidly to
their new income. In social psychology, Philip Brickman and colleagues showed almost 30 years
ago that not only did lottery winners report comparable life satisfaction levels to non-winners,
people who had become paraplegic within the previous year had only slightly lower levels of life
satisfaction than healthy individuals. A much more recent study has found that although the
average life satisfaction of people who sustain a moderate disability initially falls, within two years
it recovers completely. So it appears that reported happiness over time can adjust rapidly to
changes in economic or other circumstances, which explains why there is no trend of increase
over time.

Despite these serious shortcomings, happiness advocates are pressing for a set of "national
wellbeing accounts" to supplement the more traditional national economic accounts that measure
GDP, or national income. One of the main criticisms of GDP as a measure of welfare is that it
increases even when economic activity produces things which detract from our welfare, such as
pollution and congestion. GDP has long been acknowledged to be an imperfect measure of the
wellbeing of a society, but it does contain information of real value. GDP growth is known to be
correlated with increases in non-material benefits, such as longevity, reductions in infant
mortality, environmental protection (once a certain point has been reached)—even indices of
political liberty. Wellbeing is referred to by the Sustainable Development Research Network as
accounting for "elements of life satisfaction which cannot be defined, explained or primarily
influenced by economic growth." Given the correlations between GDP growth and many benefits,
wellbeing seems to omit rather a lot.

From a policy perspective, attempting to maximise almost any numerical measure—whether GDP
or "gross national happiness"—will have perverse consequences. Increasing a measure is not the
same as increasing whatever it is supposed to be measuring; the more complex the concept, the
more this is the case. Witness, for example, the massive grade inflation and devaluing of
standards that has taken place in education. Centralised systems of maximising indicators and
setting targets increase the remoteness of those making decisions from those affected by them,
reducing feedback and making decisions more vulnerable to partial or inaccurate information. An
alternative approach is to apply the principle of subsidiarity—to make decisions at the lowest
appropriate level, and forgo the central gathering of information wherever practicable.

When government intervention is required—and there are many situations when isolated
decisions by individuals may not produce the best outcomes—it should be based on indicators
that reduce the vulnerability of the policy process to information failure. Numbers and statistics
can take on lives of their own, so it is vital that they contain real information which is easy to
interpret. At least GDP, for all its faults, exhibits these properties.

Many people assume that happiness-based policy would advance causes which they already
champion, such as environmental protection or social justice. But what would environmental
policy based on happiness evidence look like? It is unlikely that a meaningful inverse statistical
relationship would be found between overall life satisfaction and, say, nutrient pollution, which
causes overgrowth of plant life in water bodies, thereby starving the water of oxygen. Yet surely
most people walking by a stream would rather see fish, ducklings and dragonflies than uniform
green scum. As it happens, conventional cost-benefit analysis has been taking such environmental
preferences into account for some time, and would be much more likely than happiness data to
make a good case for reducing nutrient pollution.

Further, many of the more soundly based findings of the literature on what contributes to
happiness could broadly be described as "conservative paternalism." Stable family life, being
married, and having faith contribute to happiness, while divorce detracts from it. Yet the
proponents of happiness policy are rarely heard promoting marriage and religious faith. Andrew
Oswald of the University of Warwick is probably the leading original researcher on happiness in
Britain. In a recent survey, he considers 95 academic papers on happiness and marriage. The
literature shows that compared to the unmarried, people who are married are far less likely to
suffer psychological illness, live much longer and are healthier and happier. The benefits are
confined to those who are married rather than cohabiting—and they are large. In terms of health,
the longevity effect of marriage may even offset the consequences of smoking.

Much of the research on happiness points to social models which are not attractive to modern
liberals. For example, many studies on happiness and income inequality imply that a society in
which social classes are static, where people only befriend those in a similar income bracket and
where nobody tries to improve status or wealth relative to his peers may be less prone to "status
anxiety" and discontent than a more socially fluid, meritocratic model.

And there is a country where happiness arguments have already produced morally questionable
outcomes. The kingdom of Bhutan is cited approvingly by leading happiness advocates for being
the first country to use the concept of gross national happiness as the basis for policy. In this
fortunate nation, national dress is compulsory and, until 1999, television was banned. Bhutan
wants to protect and maintain its culture, so in the 1980s and 1990s the government effectively
expelled many of the minority ethnic Nepalese population, who fled to camps in Nepal.

Bhutan highlights the fact that it will always be a political and moral judgement as to what kind of
happiness-increasing measures are acceptable; there is no objective measure. Instead, we should
presume individuals to be arbiters of what does and doesn't make them happy and suppose them
to have some ability to convey this to their fellow citizens. That is the democratic way. The
resulting compromises may be slow to emerge and may have some negative side-effects. For
example, the "status anxiety" produced by meritocracy is as much an outcome of social and
political choice as it is of liberal economic policy; yet people have conveyed that they prefer
meritocracy (however imperfect) to the alternatives—static social classes or enforced equality.

It is entirely reasonable to want to live in a society not totally dominated by commercial or
material concerns. It is entirely reasonable to want a feeling of shared values with one's fellow
citizens, and to feel that both you and they are not entirely driven by individual self-interest. The
attention that happiness research has attracted is a manifestation of these aspirations. However,
there are very many developments that both happiness research and common sense would expect
to have affected (for good or ill) the contentment of citizens in western societies over the past 60
years. That they appear not to have done so suggests either that trying to increase the sum total of
human happiness is futile, or that there are real problems with measuring happiness.

Certainly, to claim that only one particular change—increased material living standards—makes
no difference whatsoever to happiness seems a case of choosing one's evidence to fit one's
argument. We would have expected the huge increase in public spending in the second half of the
20th century, or the increase in leisure time, to have had an impact on the happiness time series.
They didn't.

Giving unhappy people the message that they are entitled to be happy without any effort on their
own part will not make them happy. Moreover, if the state struggles to be held to democratic
account for its current responsibilities, the last thing it should do is ambitiously expand them. In
1944, Friedrich Hayek predicted that as the state expanded its responsibilities, it would become
sclerotic and exceed its capacity to respond to people's demands and aspirations. As a result, they
would become disillusioned with democracy and calls would be made for decisions to be "taken
out of politics" and placed in the hands of experts. The aspiration that governments should
promote something as complex as happiness is likely to provide a further twist to this
disillusionment.

								
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