The British conservative leader David Cameron once told the BBC that: «Politicians should be saying to themselves, ‘how are we going to try and make sure that we don’t just make people better off but we make people happier, we make communities more stable, we make society more cohesive.’» This theory comes straight from the “happiness economics” sponsored by Lord Richard Layard, who directs the Well-Being Program at the London School of Economics. Here are some concepts from his speech at the World Forum in Busan.
The British conservative leader David Cameron once told the BBC that: «Politicians should be saying to themselves, ‘how are we going to try and make sure that we don’t just make people better off but we make people happier, we make communities more stable, we make society more cohesive.’» This theory comes straight from the “happiness economics” sponsored by Lord Richard Layard, who directs the Well-Being Program at the London School of Economics. Here are some concepts from his speech at the World Forum in Busan. For the American writer Henry Louis Mencken, «Puritanism is the dreadful fear that someone, somewhere may be happy.» I want to argue that a proper measure of progress is indeed the extension of happiness and misery in the population. I want to go a lot further than the Stiglitz Commission, but I saw that John Stiglitz said something very import yesterday: if you measure the wrong thing you will do the wrong thing. So if you really think that what matters is the quality of life, that is what you should measure. But this is not what he said, this is the conclusion I reach: that patching up the measure of GDP is not really going to be enough, to reflect the things that really concern us, because if you think for example to the quality of health which we experience, the quality of social relationship, the quality of government, how could we reflect these crucial dimensions of our quality of life into the GDP? I think we have to move radically from the metric of money to the metric of well being when we think about progress. Of course it’s nothing new in thinking this way. In the 18th and 19th century the most respectable view in the West about public policy was that it had to envision the happiness of the population and reduce the margins of misery. Unfortunately in the 20th century we had philosophical skepticism, then psychological behaviorism and then we had the economists also attacking the idea that we could know how happy people are. That created a void that was filled by the crass materialism of the GDP. Fortunately science has moved on, especially psychology. We now do know a great deal about how to measure happiness and misery, and we know that when people report their feelings their reports are highly correlated with what their friends thought the person felt; even more important, we now have located the areas in the brain where the electrical activity is highly correlated with what people say about their happiness and misery. So I think we can finally assert with confidence that happiness and misery are objective phenomena, quite as objective as the GDP. I want to argue, first of all, that we do need a single measure of progress. This is not fashionable, but I think that it is a very important point. Of course it is very interesting to know how we are doing over different objectives that we are after, but we need something more than that because we are trying to help the high level policy maker to think about how he is doing and how he could do better. And of course the main problem facing a government is how to keep the right balance between objectives. And the relative importance of the difference objectives can only be resolved by knowing how they contribute to the overall objective from which they derive their importance. So we have to go beyond what for example Amartya Sen recommends, that we need a way of knowing how we are doing in the different capabilities; we need a way of weighting the capabilities. We do have an overall objective today and that is the GDP. The question now is what should the objective be if it is not the GDP. I think it should be the extent of happiness and misery in the population, viewed as a single continuum running from despair to extreme happiness. Why do I think that happiness and misery is the criteria for measuring progress? There are many goods: liberty, health, income and so on. But then we should ask: why are they good? Because the lack of them makes people feel miserable. But we cannot ask “why is it important that people don’t feel miserable?” because it is so self-evident. I argue that this is our overarching good. So we can get away from the need of any policy maker to give a weight to the importance of the different objectives, because the weight will be based on the experience of the population. This will give to the policy makers a good framework of national policy to promote a good pattern of life. Ithink that at each government level this indicator can be used in three different ways: first, to monitor the trends, looking at how it is related to satisfaction in the different domains; second we are interested in the dispersion of life satisfaction across the population, because in particular we want to see which groups have the lowest quality of life; third, we can use these data to think which kind of policies we think might be useful and how they would affect the satisfaction of the population. Today we have a default metric, that is money, If we keep using it adjusting GDP, we will not incorporate the most important features of the quality of life and will always be driven back to the metric of money. If we don’t institutionalize an alternative metric, that is subjective well being, we will end up by doing many of the things that we are already doing. I think this should be the main new direction: only if we go for something different there is every chance that in 25 years we will be making our policies not in terms of GDP but of subjective well being, producing a much better world.