May 12, 2010

Happiness, prosperity and government policies

Does money bring happiness?
It has long been assumed that economic prosperity brings happiness. However, the evidence is to the contrary. Economic growth in developed countries has gone hand-in-hand with a rise in mental and behavioural disorders, family breakdown, social exclusion and diminished social trust. In China, for example, a 2009 study by German sociologists showed that the lifting of hundreds of millions of people out of poverty in the 1990s has been accompanied by an alarming decrease in life satisfaction at every level of income, in both rural and urban areas.

[I]t is time to rethink the goal of politics: to promote well-being rather than wealth.
In her Nature review of The Politics of Happiness: What Government Can Learn from the New Research on Well-Being, by Derek Bok, Felicia Huppert argues that "most people are unaware of and need education about what will give them lasting satisfaction." If people only knew about the "increasingly solid body of evidence about the causes of happiness" they would vote for policies that would "promote well-being rather than wealth." I think that people actually vote for policies that hamper wealth. I am also skeptical that prosperity makes people unhappy. But let me examine Huppert's arguments under her own assumptions.

Huppert says that giving money to someone else makes people happy. No wonder, given that she thinks that having money makes people unhappy. The problem of her argument is that the happiness of giving money comes at the cost of bringing unhappiness to those receiving it.
[Bok] proposes the provision of universal health insurance and measures to strengthen marriages, such as premarital education and incentives to persuade low-income couples to marry.
I know of no "solid body of evidence" that universal health insurance makes people happier. Huppert's own evidence that poor people, who tend to lack health insurance, are happier than rich people, who tend to have insurance, suggests the opposite. I wonder what kind of incentives would be useful to persuade low-income couples to marry. You should not give them money because it makes them unhappy.

Huppert ends with more bad news for her own argument:
[H]appiness and social well-being are likely to bring economic prosperity.
Given that she thinks that prosperity brings unhappiness, what are we to do?

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