… and the Pursuit of Happiness - Institute of Economic Affairs

… and the pursuit of happiness
introduction
of liberty – towards meeting that goal. During normal times, this
approach is not appropriate. Indeed, if it is agreed that society has
only one goal – that of maximising wellbeing – then the process
of government becomes an operational research problem: how to
best govern society to maximise measured wellbeing.
The reader may consider that this is knocking down a straw
man and that nobody seriously believes that societies should be
centrally planned to maximise happiness, just as nobody really
believes these days in centrally planning an economy to maximise
wealth. Many of the utilitarians in the happiness debate, however,
do believe in strong government intervention to achieve their
goals. Furthermore, if the complete planning of society is not
possible because planners cannot have all the information
that would be necessary to achieve their objective, then partial
planning is surely impossible too. Even the most benign wellbeing
advocates desire policy interventions because they believe that
those interventions will increase the happiness of some members
of society more than they will decrease the happiness of others.
Indeed, if the wellbeing advocates in central government do
not believe that central government policy decisions can lead to
greater aggregate happiness, then why are they even collecting the
relevant data?
Schwartz’s attack on other aspects of Layard’s agenda is also
important. Layard regards leisure as a form of public good – or,
at least, as having positive externalities. He therefore wants work
to be heavily taxed. Furthermore, when we earn more money we
not only make ourselves happier but make our neighbours less
happy as they fall behind in relative terms. Schwartz responds:
‘My conclusion is that the happiness economics that Lord Layard
has built on utilitarian foundations elevates envy to the category
of a public virtue, endangers political liberty and shackles social
progress.’ Schwartz further argues that, even if leisure does carry
positive externalities, the rationale for government intervention,
given what Coase and also public choice economics have taught
us, is very limited.
Schwartz’s final criticism invokes Hayek; it is subtle but
im portant. In the small group, as part of the process of evolution,
we have learned to respond to pleasure and pain. The
Great Society (to use Hayek’s term) has evolved in that context.
This does not create, however, in any way, a case for the Great
Society adopting the maximisation of pleasure (net of pain) as
its governing principle. What sort of actions might maximise the
pleasure of people within a given country? Possibly they would be
cruel punishments for criminals, strict immigration controls, the
protection of local businesses … and so on. In the small group, we
might be suspicious of outsiders at first – that is how networks of
trusting people often develop – but, if that translates into a ‘wellbeing’
policy to keep outsiders out of the country because the
Office for National Statistics finds that this increases measured
happiness, then the Great Society will be jeopardised. Indeed,
Schwartz concludes largely as Boettke and Coyne conclude – the
policy approach must be one of creating the overarching framework
of personal freedom so that we can – as individuals and
groups – freely pursue our wellbeing.
In conclusion, it is to be hoped that, when the Office for
National Statistics concludes its studies, it will set great store
by Bjørnskov’s empirical conclusions – backed up in less direct
ways by the authors of other chapters in this monograph. Countries
that inhibit the freedom of their citizens to a lesser degree
have happier citizens. Paradoxically, therefore, wellbeing may
34 35