… and the Pursuit of Happiness - Institute of Economic Affairs

… and the pursuit of happiness
the folly of wellbeing in public policy
will be essentially illusory, whatever statistical validation tests are
applied to the sample data, and will break down and cease to be
valid. This is not merely a theoretical point. It is the entire experience
of the history of macroeconomic modelling.
Indeed, government attempts to increase measured happiness,
rather than making life better for us, may well actually do
the opposite. They will create arbitrary objectives which divert
civil service energies from core responsibilities; give many people
the message that happiness emanates from national policy rather
than from our own efforts; and they will create pressure for
government to appear to increase an indicator which has never
before shifted systematically in response to any policy or socioeconomic
change.
These are exactly the mistakes of the target-driven mentality
which has come to pervade the British public sector more generally.
We should learn from these mistakes rather than replicate
them.
More sinisterly, the happiness view of the world has tendencies
which are inherently anti-democratic. The expert with his or
her clipboard and regressions knows better than ordinary people
themselves what makes them happy. By this presumption of
knowledge, local democratic or individual decisions can be overridden
with a clean conscience. Not all decisions are made at the
Department for Motherhood and Apple Pie, so a happiness objective
glosses over the very real ‘tough choices’ which policymaking
entails.
GDP is not an all-encompassing measure of welfare; it
simply measures the size of the economy. There are many
things im portant to our wellbeing which are not captured by it.
Those things need to be sustained by a strong civil society and a
democratically accountable, well-run government. If we cannot
make convincing cases for them without ‘scientific proof’ that
they make people happy, we are totally morally adrift. Government
does not fail because it does not measure happiness; it fails
when its energies are misdirected on the basis either of poorquality
information or of the false presumption of knowledge by
would-be central planners.
References
Deaton, A. (2008), ‘Income, health and wellbeing around the
world: evidence from the Gallup world poll’, Journal of
Economic Perspectives, 22(2): 53–72.
Griffith, T. D. (2004), ‘Progressive taxation and happiness’,
Boston College Law Review, 45(5): 1363–1398.
Johns, H. and P. Ormerod (2008), ‘The unhappy thing about
happiness economics’, Real-World Economics Review, 46:
139–46.
Kahneman, D. and A. Deaton (2010), ‘High income improves
evaluation of life but not emotional well-being’, PNAS,
107(38): 16489–16493
Klein, L. R. (1946), ‘A post-mortem on transition predictions of
national product’, Journal of Political Economy, LIV: 289–307.
Klein, L. R. (1947), ‘The use of econometric models as a guide to
economic policy’, Econometrica, 15: 111–151.
Layard, R. (2005), Happiness: Lessons from a new science,
Harmondsworth: Penguin.
Nordhaus, W. D. and J. Tobin (1971), ‘Is growth obsolete?’,
Cowles Foundation Discussion Papers 319, Cowles
Foundation for Research in Economics, Yale University.
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