Happiness: the hippies were right all along

Warwick's Andrew Oswald writes in tomorrow's Financial Times that The hippies were right all along about happiness (subscribers only). Oswald maintains that happiness, not economic growth, "ought to be the next and more sensible target for the next and more sensible generation":

Politicians mistakenly believe that economic growth makes a nation happier. “Britain is today experiencing the longest period of sustained economic growth since the year 1701 – and we are ­determined to maintain it,” began Gordon Brown, the chancellor of the exchequer, in his 2005 Budget speech. Western politicians think this way because they were taught to do so. But today there is much statistical and laboratory ­evidence in favour of a heresy: once a country has filled its larders there is no point in that nation becoming richer.

The hippies, the Greens, the road protesters, the downshifters, the slow-food movement – all are having their quiet revenge. Routinely derided, the ideas of these down-to-earth philosophers are being confirmed by new statistical work by psychologists and economists.

First, surveys show that the indus­trialised nations have not become happier over time. Random samples of UK citizens today report the same degree of psychological well-being and satisfaction with their lives as did their (poorer) parents and grandparents. In the US, happiness has fallen over time. White American females are markedly less happy than were their mothers.

Second, using more formal measures of mental health, rates of depression in countries such as the UK have increased. Third, measured levels of stress at work have gone up.

Fourth, suicide statistics paint a picture that is often consistent with such patterns. In the US, even though real income levels have risen six­fold, the per-capita ­suicide rate is the same as in the year 1900. In the UK, more encouragingly, the suicide rate has fallen in the last century, although among young men it is far greater than decades ago.

Fifth, global warming means that growth has long-term consequences few could have imagined in their undergraduate ­tutorials.

None of these points is immune from counter-argument. But most commentators who argue against such evidence appear to do so out of intellectual habit or an unshakeable faith in conventional thinking.

Some of the world’s most innovative academics have come up with strong evidence about why growth does not work. One reason is that humans are creatures of comparison. Research last year showed that happiness levels depend inversely on the earnings levels of a person’s neighbours. Prosperity next door makes you dissatisfied. It is relative income that matters: when everyone in a society gets wealthier, average well-being stays the same.

A further reason is habituation. Experiences wear off. ...Those who become disabled recover 80 per cent of their happiness by three years after an accident. Yet economics textbooks still ignore adaptation.

A final reason is that human beings are bad at forecasting what will make them happy. In laboratory settings, people systematically choose the wrong things for themselves.

Yet surely, it might be argued, what about power showers, televised football, titanium wristwatches, car travel for all – are these not compelling evidence for the long arm of growth? Yes they are, but we need these because Mr and Mrs Jones have them, not because they make an intrinsic difference.

Economists’ faith in the value of growth is diminishing. That is a good thing and will slowly make its way into the minds of tomorrow’s politicians. Led by the distinguished psychologist Edward Diener of the University of Illinois, a practical intellectual manifesto signed by many of the world’s researchers, entitled Guidelines for National Indicators of Subjective Well-Being and Ill-Being, has just begun to circulate on the internet. That document calls for national measures of ­separate facets of well-being and ill-being, including moods and emotions, perceived mental and physical health, satisfaction with particular activities and domains, and the subjective ­experience of time allocation and ­pressure.

Happiness, not economic growth, ought to be the next and more sensible target for the next and more sensible generation.

Comments

[Gabriel Mihalache]

Let me air another crazy thought... why not just let people free--stop trying to manage other people's lives--and see who decides to allocate his time for work and who decides to allocate her time for leisure?

The idea that there's one aim for the entire nation, the pet secret assumption of most macro work, seems to me to be out of Stalinist Russia or worse. "You must sacrifice yourself, comrade, for the happiness of our nation! Give up your income so little Timmy can get +3 units of happiness."

As for the envy nullifies growth's advantages point, let's just see how much nullified it is when the "growth" of an AIDS cure will save your life... will you care that Mr. Jones next door got one too?

On the other hand if competing with Mr. Jones is the major aim of one's life, how should we expect for people to stop caring about that? It's like saying that people think too much about sex and they should try to use their minds differently. We can't prevent people from trying to show off.

[Lord]

If growth doesn't make you happy, just try decay.

[mso]

Unhappily the report which details the change in happiness in the U.S. costs $950, so I can't comment on the details. But it would be interesting to see if the decline in happiness correlates with the increase in income disparity over the last few decades.

See:
http://www.tcf.org/Publications/EconomicsInequality/wasow_yachtrc.pdf

The US government does focus on increasing the happiness of its citizens. Not all of them, just the ones in the top income quintile. But of course they're the ones who make campaign contributions.

A recent piece I read indicated that the best thing that many of us could do is to make our commute to work as short as possible. Government policy in terms of land-use, fuel taxes, highway building, and access to public transportation play a huge role in determining urban densities. So perhaps it is the our automobile love affair which is responsible for the drop in american happiness.

http://mitpress.mit.edu/catalog/item/default.asp?ttype=6&tid=14403

Whatever the case, I think policies should be considered in the light of how they maximize the total well-being of the total populace in social, economic, health and even happiness terms. Just looking at the total population would be an improvement over the current situation.

[Arthur Eckart]

Maximizing utility is maximizing satisfaction, which by definition maximizes happiness (I wonder if people were just as happy during the Great Depression). There's a tradeoff between labor and leisure. If you like your work, money is not important. If you dislike your work, money may offset that somewhat. Economics is far more about aggregate and individual living standards than a narrow generalization of the production side.

[Self Help]

Very informative post.