Since then economists have become increasingly interested in defining and measuring happiness and in determining what conditions and policies might bring it about. By one account more than 10,000 academic papers have been written on the subject, and Western governments have conducted regular surveys on the levels of happiness reported by individuals. Happiness, in short, has become a deadly serious business. And no discussion of the subject can begin without Jeremy Bentham.
Bentham was a British philosopher and social critic born in 1748 in Houndsditch, London. The son of a wealthy lawyer, he was a child prodigy. By the age of three he was said to be learning Latin declensions and he attended Oxford University at twelve. Graduating with a master’s degree at the ripe old age of eighteen, he quickly gave up the practice of law, which he detested, and devoted his life to writing and pressing for social change.
Bentham was an eccentric. Just in case the story about his mummified head hasn’t convinced you of that, he once wrote to the Home Office to suggest that its various departments be linked by a web of “conversation tubes” to aid communication. You could call him the father of the Internet. He also drew up plans for a panopticon prison, which would allow a single guard to observe every prisoner simultaneously. Bentham was a social reformer, who wrote in trenchant prose about everything from equality of the sexes to state punishment. The “fundamental axiom” of his philosophy was the principle that “it is the greatest happiness of the greatest number that is the measure of right and wrong.”
That sounds enormously progressive for a man writing 200 years ago, but in the story of economics, at least as told by me, Bentham can appear as both hero and villain. Bentham is usually regarded as the founder of a doctrine called utilitarianism, which states that an action is right if it promotes overall happiness. Writing about the concept, Bentham said, “nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do.”3
Bentham’s ideas are governed by the idea of utility, by which he means not what is useful but rather “that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness.” His ideas can be summed up as happiness maximization, and he expressly stated that the goal of society should be to maximize total happiness, not just happiness for a particular individual.
Bentham’s notion of utility, later taken up by John Stuart Mill, has become foundational in modern economics. It is predicated on the idea that economics is an almost mechanical science in which utility-maximizing agents—people to you and me—pursue their own rational interests. If markets are functioning properly, this benefits not only themselves but also society at large. This interpretation borrows heavily from the physical sciences. The victory of mechanism over moralism, it takes as a starting point the notion that markets function best when individuals are left alone. In this Bentham’s utility merges with Adam Smith’s invisible hand to form a view of the world in which rational actors produce the best possible outcome under given constraints. “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner,” wrote Smith, “but from their regard to their own interest.”
Bentham’s utility is the mechanism by which individual decisions add up to a greater whole. Neoliberals argue that the market is “a vast sensory device, capturing millions of individual desires, opinions and values, and converting these into prices.”4 Bentham was an enemy of abstract philosophical concepts such as goodness, duty, wrong, and right. They were all right for the likes of Plato and Aristotle, but what did such terms really mean? Far better, thought Bentham, to reject such “fictitious” concepts and to root one’s inquiry in things we know to be real, such as pleasure and pain.
His can be a very Gradgrindian view of the world. Indeed Charles Dickens’s Thomas Gradgrind, the school superintendent and industrialist in Hard Times, was modeled after the Victorian utilitarians of his day. Gradgrind was, Dickens wrote, “a man of facts and calculations. A man who proceeds upon the principle that two and two are four, and nothing over…With a rule and a pair of scales, and the multiplication table always in his pocket, sir, ready to weigh and measure any parcel of human nature, and tell you exactly what it comes to.”
This may be a caricature of Bentham’s thinking, but the notion that utility can be measured—usually in terms of price—has come to dominate modern economics. Rational-choice theory says that if everyone is left to their own devices they produce the best possible outcome for the maximum number of people. That is the origin of Homo economicus, “a somewhat miserable vision of a human being who is constantly calculating, putting prices on things, neurotically pursuing his own personal interests at every turn.”5 That makes Bentham “the inventor of what has since come to be known as ‘evidence-based policymaking,’ the idea that government interventions can be cleansed of any moral or ideological principles, and be guided purely by facts and figures. Whenever a policy is evaluated for its measurable outcomes, or assessed for its efficiency using cost-benefit analysis, Bentham’s influence is present.”6
It also makes Bentham an important figure in the business of measuring economic growth, which seeks to attach a single number to the sum of human activity. The adoption of Bentham’s thinking can be seen as sending the whole discipline of economics off track about 150 years ago. Bentham’s narrow definition of happiness—the experience of pleasure and the absence of pain—put economics on a Gradgrindian path of weights and measures. In this view of the world there is no room for the broader, more uplifting Aristotelian concept of happiness—eudaemonia—which centers on virtue, friendship, and the formation of character. All these were unmeasurable fictions of little use to the Great Utilitarian.7
By this account, Bentham’s ideas are a forerunner of the bloodless, utility-maximizing version of humanity that today we call economics, but there is another, kinder, version of Bentham lurking in his writing. A happier version, as it were. To discover that, we need to go to the London School of Economics, where “happiness economics” has found one of its greatest prophets.
* * *
—
For a lord, Peter Richard Grenville Layard is an unassuming type. The man who comes to greet me in the nondescript hall of the university building is silver-haired and quietly spoken. He has none of the pomposity of some successful people, rather the air of someone comfortable in his own skin. There’s a twinkle in his eye and, at eighty-two, a spring in his soft-footed step. He’s been a member of the House of Lords since he was made a life peer in 2000, but he remains every inch the rumpled academic in casual trousers and comfortable shoes. One small detail stands out. On his jacket lapel is a round white badge bearing the words ACTION FOR HAPPINESS.
For more than forty years Layard has championed the cause of well-being. Originally a labor economist whose research focused on unemployment and inequality, in the 1970s he became curious about the emerging discipline of happiness. As well as happiness itself, Layard developed a strong interest in mental health and mental suffering. A disciple of Bentham, he believes that the logic of happiness maximization is not calculating mean-spiritedness at all. Rather, it promotes a caring, progressive society, he says, in which it is more important to relieve the suffering of those who are unhappy than to add a bit of extra happiness to those who are already content. For Layard, a true interpretation of Bentham carries a profoundly humanistic message, pointing us toward a society in which cooperation is as important as competition. The goal of society, he says, should be to “create as much happiness as you can in the world. The mark of a civilized society is that people are enjoying their lives.”
Layard has bought sandwiches for our lunch. Brown paper bag in hand, he ushers me into his tiny office. At various stages of the conversation he springs up from his seat to take down a book from a shelf, opening it to a table on comparative happiness across countries or to data showing an i
ndividual’s level of happiness during a particular day. According to one table, which awarded a numerical score to favored activities, researchers had discovered that people very much enjoy sex and very much dislike commuting. I could have told you that, I thought to myself, for half the funding.
Layard takes a slightly narrower view of happiness than your average Greek philosopher. “Aristotle didn’t get it quite right, but Bentham got it pretty much right,” he says. Like Bentham, he regards happiness as a real thing that can be measured. Like him too, he believes that the goal of any society should be the maximum happiness of the maximum number of people. “The amount of unhappiness is extraordinary at the moment,” he says, shaking his head at the perceived misery all around him, the result of such diverse phenomena as family breakup, chronic pain, long-term unemployment, and what he sees as the often-pointless pursuit of money and material possessions.
He uses the terms “well-being” and “life satisfaction” interchangeably, though he clearly has a soft spot for the more intuitive “happiness.” But policymakers are uncomfortable with the idea of happiness even though it is a concept to which they attach great importance in their daily lives. “Probably an awful lot of them make key decisions based on whether they think it will make them happy. Who to marry or what job to do? Is your child happy at school? There could hardly be a more important question,” he says with the frustration of someone who has been banging the same drum for decades. “But it doesn’t seem to them something the state should be doing. When they talk about happiness, they think, Oh, it’s ridiculous. Happiness is a fleeting thing.”
He has adapted his terminology. “What could you say to get policymakers to take you seriously? That has always been my approach. And most policymakers have very little difficulty with ‘life satisfaction.’ They’re used to asking people, ‘Are you satisfied with your garbage collection or with your hospital?’ ” From there it’s not such a leap to ask them whether they are satisfied with their lives.
For politicians there may be expedient reasons to pay attention to life satisfaction. Bill Clinton’s conviction that the state of the economy always determines the result of an election turns out to be questionable. In fact, politicians who tracked happiness would have a better grasp of their re-election prospects. One paper written at the London School of Economics compared data from a twice-yearly Eurobarometer survey conducted since 1973 against election results across Europe. In the survey, which covers a random sample of more than one million respondents, people are asked, “On the whole, are you i) very satisfied, ii) fairly satisfied, iii) not very satisfied or iv) not at all satisfied with the life you lead?” The paper found that answers to that question were a “robust predictor of election results” and a better guide to voting intention than any other measure including GDP.8 To Bill Clinton, Layard says, “It’s happiness, stupid.”
In the new “science” of happiness there are several ways of measuring what researchers call “subjective well-being.” One is to rely on fast-advancing neuroscience. Richard Davidson at the University of Wisconsin has developed ways to measure people’s mood by attaching electrodes to the scalp. When people are shown an amusing video clip, the left side of their brain—associated with happiness—becomes more active. A frightening sequence provokes the opposite reaction. Left-siders, the left side of whose brains is naturally more active, are generally happier. Right-siders tend to smile less and are assessed by their friends as less happy. For Layard, the science confirms the basic premise that happiness is real and measurable and that “there is a direct connection between brain activity and mood.”
Most of the work in happiness economics, however, rests on the same basic technique as those used to compile growth statistics: collecting survey data. Numerous methods have been developed for assessing people’s happiness by asking them how they feel. Here one must distinguish between different types of happiness. Some surveys concentrate on what might be called mood—asking people how they feel right now or how they felt at various times on the previous day. The UK’s Office for National Statistics asks, “Overall, how happy did you feel yesterday?”
The surveys that tend to be favored by economists seeking to capture national well-being concentrate more on what might be called life satisfaction. In the most comprehensive, which covers 150 countries, people are asked to evaluate the quality of their lives on an eleven-point scale known as the Cantril Ladder. They are asked to imagine a ladder and to place their life satisfaction on the appropriate rung, with the best possible life for them being 10 and the worst 0. Another question, in the European Social Survey, asks, “Taking all things together, how happy would you say you are?” with answers ranked from 0 to 10. Yet another—the World Values Survey—poses a similar question but orders answers on a scale of 0 to 3. “Taking all things together, would you say you are: Very happy, Quite happy, Not very happy, or Not at all happy?” These types of questions are the ones that Layard says produce the most useful results.
The good news for happiness economics is that the results of different surveys tend to match. Happiness as measured by asking people how they feel and by testing them are broadly similar, as are results of surveys using different types of questions with different scales. Layard argues that happiness measures are robust enough to make public policy decisions based on their findings. In his book—no prizes for guessing that the title is Happiness—he states his case in commendably straightforward language. “Happiness should become the goal of policy and the progress of national happiness should be measured and analyzed as closely as the growth” of the economy. To me he says, “GDP isn’t going to tell us anything that we want to know about welfare.”
I can’t resist asking him if he would call himself happy. His work presumably gives him a sense of purpose, one of the keys to satisfaction. His eyes flicker at the mischievousness (and doubtless predictability) of the question and he responds with what I assume is a joke. “If you think about your happiness too much you become miserable.” The only way of knowing if he means it would be to strap electrodes to his head.
* * *
—
What, you might ask, are they putting in the water in northern Europe? In each of the years since the World Happiness Report first came out in 2012 Nordic countries have dominated the list of the happiest countries on earth.9 The 2016 report was no exception, with all five Nordic countries in the top ten. That’s not bad for a group of nations associated with darkness—quite literally during the winter months, when the sun rarely surfaces. Think Nordic noir, the ludicrously bleak drama of August Strindberg, and the troubling art of Edvard Munch, who painted the face of a screaming figure set against a shifting orange sky. And that’s not to mention some of the highest taxes on the planet. Hardly a recipe for happiness, you might think. Yet the Scandinavians are among the most contented people you can meet. If you add the Netherlands and Switzerland, as well as Canada, which probably qualifies as the Scandinavia of the Americas, it is virtually a clean sweep. The other two countries to make up the top ten are Australia and New Zealand, henceforth to be known as the Nordic antipodes.
These are the rankings for the top and bottom countries in the world, according to the Cantril Ladder, which scores from 0 to 10.10 There is a large four-point gap between the top-ranked countries and the bottom ones, which are mostly in sub-Saharan Africa, a result replicated in other surveys. Denmark is the happiest country on earth, Burundi the saddest.
Figure 4
The happy countries are all rich and the unhappy ones are all poor. Higher income does bring happiness then, at least up to a certain point. The results support the conviction that happiness is a measure of something real. If you thought happiness was purely a matter of a person’s mood or personality, you might expect people to adapt to whatever conditions they lived in and to exhibit similar levels of happiness around the world. That is decidedly not the case. In countries where conditi
ons are objectively bleak, people assess themselves as unhappy.
But the differences cannot be explained by income alone. In fact, of the top ten countries by per-capita GDP, only Norway and Switzerland make the list of the ten happiest.11 Eight of the top ten countries by income—including the likes of Luxembourg, Qatar, and Singapore—do not make the super-happy cut. If a certain amount of material comfort brings happiness, there is also strong evidence that happiness is about more than income alone. One of the happiest countries in the world (coming in at number 14) is Costa Rica. That’s despite the fact that it is only the 77th wealthiest, with a per-capita income of $15,000.12
Three other middle-income countries in Latin America—Brazil (17th happiest), Mexico (21st), and Chile (24th)—all come high relative to much richer countries. Latin countries are better at converting modest levels of income into happiness. The UK, which is ranked 23rd, virtually ties with Chile, even though its average income is nearly twice as high. France, in 32nd place, and Italy, in 50th, do worse still. The Italians—noticeably miserable relative to their income—rank below several far poorer countries, including Algeria, Guatemala, and Thailand. So much for la dolce vita.
The US ranks 13th, roughly in line with its income per head, but probably below where many Americans would expect it to be. The Declaration of Independence, after all, enshrines the pursuit of happiness as one of its citizens’ inalienable rights. Israel ranks surprisingly high at 11th, despite its near-permanent state of high alert, versus the Palestinian Territories, which is more predictably at an unhappy 108th. China, for all its economic strides, is only 83rd in the world merriment rankings.
In the bottom ten are Syria and Afghanistan, which have both suffered terrible civil wars. The others are all in sub-Saharan Africa. One that sticks out is Rwanda, a darling of development agencies because of its progress in tackling poverty under Paul Kagame, its formidable president. But Rwanda is also authoritarian and still living with the memories of a 1994 genocide in which some one million people were butchered in one hundred days. It is perhaps understandable that Rwanda is not as happy a place as its recent material advances might suggest.
The Growth Delusion Page 18
