Tuesday, June 06, 2006

The dismal science gets happy

A couple of interviews from the Guardian with people working on the economics of happiness. With opportunistic politicos like David Cameron calling for measures of wellbeing and personal fulfillment to be included alongside GDP and all the other macro indicators, it seems an idea of the moment. But will there be any lasting impact?

From today's Education section, a profile of Andrew Oswald of the University of Warwick -
Oswald's long-held view that advanced western economies should concentrate less on growth and more on the wellbeing of their citizens has captured the zeitgeist.
"Why else would the BBC be putting out programmes like that in more or less prime time?" he asks. "Hardly a day passes when I don't get a call from a journalist somewhere in the world."
The Tory leader, David Cameron, has been saying recently that it is time we concentrated not just on GDP (gross domestic product), but on GWB (general wellbeing). So is Oswald beginning to take calls from politicians as well as journalists? He shuffles his feet around, looking rather embarrassed, before confirming that he does. "I'd prefer not to go into names," he says. And before I ask, no, he says, he has not been approached by Cameron.

The defining variables are, as might be expected, relative rather than absolute -
"Before we can tell how happy we are, we have to keep comparing ourselves with the neighbours. To keep up with the Joneses, we spend a vast proportion of our income on things we don't need. It's the way human beings are. But, collectively, we can't all be ahead of the average. That's the key factor in why the continued emphasis on economic growth doesn't work for the whole of society."

Last week, John Sutherland had a similarly-themed chat with Richard Reeves of thunktank the Intelligence Agency -
Is happiness, then, something that society should be aiming at as an end in itself?
"I think it is. Happiness is one of the things that we really should be directing ourselves to, as a society. There's a lovely quote from John Maynard Keynes, writing in the 1930s about 'the economic prospects for our grandchildren'. Keynes predicted that 'there will come a time when we've solved the economic problems - at which point we shall be faced with the permanent problem of mankind: how to live wisely, agreeably and well. It will be those societies which cultivate the arts of life who will best be able to enjoy the abundance when it comes.'
"In my view, Keynes was entirely right in his prediction. And it's fascinating that an economist should concede that economics is only useful until it reaches its own point of diminishing returns. We are at that point now. So the Keynesian question is, 'Are we enjoying the fruits of our abundance?', 'Are we living wisely, agreeably, and well?' My answer would be, 'Not as much as we could do'."
"I don't think it would make electoral sense for Blair, Cameron or Campbell to say, 'We're the happiness party, and we're going to make you happy.' None the less, I firmly believe that politicians should take seriously people's sense of their own wellbeing, and of the wellbeing of society generally, and see that as an important policy goal. It should not be something that is giggled out of court".



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