1. In spite of general reductions in government spending, the prime minister has found room in the government’s budget to spend money on a major survey of what makes the British people happy. This will be used, in the prime minister’s own words, to guide government policy towards improvements in general wellbeing rather than improvements in national income.
2. However, it is it really true that government policy has always been orientated towards maximising GDP? Is it true that wellbeing does not increase as income increases? Is it true that more equal societies are happier societies? Can we really improve wellbeing through workplace legislation? Is it right to orientate government policy towards the single aim of increasing aggregate wellbeing across society as a whole?
3. These questions and many more are tackled by some of the leading intellectuals in the field. Overall, this monograph provides a substantial challenge to those who want to put the explicit pursuit of wellbeing at the heart of government policy.
4. Explicit attempts by government to control GDP, or rapidly increase GDP growth, have normally failed. Such a target driven mentality is part of the conceit of central planning. Attempts to centrally direct policy towards improving general wellbeing will also fail.
5. Contrary to popular perception, new statistical work suggests that happiness is related to income. This relationship holds between countries, within countries and over time. The relationship is robust and also holds at higher levels of income as well as at lower levels of income. This calls into question the assertion that people are on a ‘hedonic treadmill’ that prevents them becoming happier as their income rises beyond a certain level of income.
6. This new work, using a data set of 126 countries, shows that the correlation between life satisfaction and the log of permanent income within a given country lies between 0.3 and 0.5. There is a similar correlation between growth in life satisfaction and growth in income.
7. There is no evidence that equality is related to happiness. Indeed, the proponents of greater income equality admit that they are unable to cite such evidence and instead rely on very unsatisfactory forms of indirect inference. The clearest determinants of wellbeing would seem to be employment, marriage, religious belief and avoiding poverty. None of these is obviously correlated with income equality.
8. The government is under pressure to bring in further legislation to promote ‘wellbeing at work’. This includes, for example, legislation on parental leave. The theoretical and empirical case for such legislation is weak.
9. There is no relationship between objective measures of wellbeing at work and the extent of employment protection legislation, unionisation, and so on. Given the relationship between wellbeing and employment, any form of employment protection legislation that led to more temporary employment or reduced employment would be detrimental to wellbeing.
10. A comparison across 74 countries finds that government final consumption negatively affects happiness levels and that the negative influence occurs regardless of how effective government bureaucracy is or how democratic the country is. Increasing government spending by about a third would cause a direct reduction in happiness of about 5 to 6 per cent. Centralising government decision-making is likely to lead to more intrusive government and lower wellbeing.
11. If people wish to maximise their wellbeing and are the best judges of their own wellbeing they will take decisions about how to use their economic resources to pursue their own goals. We should allow people’s preferences for wellbeing to be revealed by their own actions rather than through surveys of what people say they prefer.
12. Happiness measures are short-term, transient and shallow measures of people’s genuine wellbeing.
13. Those who wish to use happiness economics in public policy have no effective way of determining whether an increase in wellbeing should be traded against justice, moral values or a decrease in freedom. It is a utilitarian philosophy which applies a principle that many might use in their own lives to the organisation of society as a whole. Applying such an overarching principle to the organisation of society as a whole is very dangerous.
14. 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 be maximised if the government does not consciously try to pursue that objective specifically.
15. This should not be surprising. The wellbeing policy activists accuse economists of focusing too much on the maximisation of national income as a government policy objective. This is a false accusation, but a lesson can be drawn from attempts by government to increase national income.
16. It also happens to be the case that economic growth is higher when governments do not specifically plan for that end. In other words, the central planning of a society to achieve a particular desired end is likely to fail to meet that end, as well as changing completely the nature of the society.
17. This is not to say that some useful policy advice cannot be found from the empirical work on happiness economics. It can tell us, for example – though we probably knew already – that policies that impede employment seriously affect wellbeing. Those authors whose chapters deal with the normative issues, however, make a very strong case in this monograph that government policy should not promote wellbeing explicitly.
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