Should our politicians be serious about happiness? pt. 1

There has been a quiet revolution building up in the developed world in the last decade. People from different academic disciplines, walks of life and parts of the world have started to come together and talk seriously about happiness. The fields are diverse and include economists, think-tankers, pyschologists, theologians and statisticians. Even Britain's Prime Minister David Cameron has got in on the act. However, as with all good ideas, the serious political discourse has lagged behind, with political posturing, complacency and lazy media cynicism taking centre stage. But why? Why would a "serious" politician lose credibility if they unashamedly make happiness the cornerstone of their political beliefs? Isn't it self evident that our leaders should look out for our most obvious desire?

I will look at this in due course, but before continuing, we need to consider the definition of happiness. Much of the confusion arises from the use of the word, whether happiness is inherently difficult to define and whether it is different for every individual.

Researchers of happiness and individuals will agree that whilst there may be many causes of happiness, they are easily generalisable. In short we have two types of happiness:

(i) Moment-by-moment, instinctual, physical happiness, sometimes referred to as being hedonistic. This is the delight, joy, pleasure we might feel from a food treat, laughter, social interaction, sex, an exhilarating act, release of stress, cessation of pain / hunger or memory of any of the above. This is a well-documented scientific phenomenon, loosely linked to our balance of neurotransmitters.

(ii) Reflective, consciousness-driven, life-satisfaction based happiness, sometimes referred to as being eudaimonic. This comes from the moments in our lives when we reflect and think about our lives holistically. This type of happiness will be linked to meaning, purpose, freedom, achievement, respect, love and self-actualisation. This comes from the fact that we as humans have consciousness and are able to reflect our lives in the context of a wider, infinite world and our limited experience of it.

There is no magic formula to decide which of the two is more desirable. However, it is clear from self-examination that the absence of either is not desirable. A hedonistic lifestyle in search of all of life's pleasures but without any meaning, sense of achievement, love or reflection would be miserable. An overly harsh life without simple pleasures would be at odds with our physical desires, causing lifelong conflict.

It is also clear that the pursuit of both types of happiness needs to sustainable. This is most clear with economic resources - in a market system we need to trade our services in order to get those goods and services which satisfy our needs or give us pleasure. Over burdening ourselves with debt for immediate pleasure would not be sustainable; nor would running our planetary resources down to zero. It also needs to be sustainable in terms of not being overly addictive. This is most obvious with hedonistic happiness. Consuming a good at higher and higher rates with no discernible increase in our enjoyment of that good is not sustainable.

This I hope is a conflict free definition of happiness and its nature. It is pretty straight forward, self-evident, measurable (see ONS, OECD, Stiglitz-Sen and Nef) and probably easy to improve given enough time. Yet there have not been any material increases in our happiness in the west for over 50 years. It is clear we have not been taking it seriously - but why haven't our politicians?

In my next blog I will explore some of the myths that stop politicians from discussing and using such concepts in their policy making. Many activists have good arguments for happiness to be taken seriously - The Action for Happiness looks at this issue on their website, as does the New Economics Foundation. My exploration will look in detail as to why it is that our politicians are so at odds with happiness.

Is your income based on you, or your power?

Look through the literature of social sciences and you see two broad theories on how people's income are determined. The first, borrowed from classical economics, says that in a functioning, market economy people are generally paid according to their “marginal product”. In simple terms, this means you are paid according to how good you are at your job, and in particular how much extra profit you make for your company.

The second, encompassing a broad school from marxist and industrial relations theorists, politics and sociology, say that ultimately it is power and power relations that determine your income. Historically, this would have manifested itself in many ways. Early tribes would conquer other tribe, individuals would rise to prominence within tribes and they would get others to work for them. In these societies power and subsequently income would be obtained by force. This power would be maintained over time by building kingdoms and armies. Power would be conferred by ancestory as long as you had the wits to maintain it. Over time power held by the few has been diminished and challenged. Aristocracy has been challenged by democratic government, imperialism and slavery have faced revolt, landowners have faced challenge from industrialists, industrialists in turn from labour movements, and labour movement in turn from markets.

All in all we have moved to a society (at least in western, industrialised democracies) where the goods an individual receives roughly correlates with the value of the goods and services he is able to provide - with relative values determined by the preferences of society. This is inherently a good thing and a principle we can all adhere to. Any individual, regardless of their background can learn a skill, trade it and receive something in return. What he gets in return (post-taxes) is dependent on whether his skill is useful and how much he has honed his skill.

On the downside, if many others are better than him at this skill he must face a choice as whether to improve his skill, accept lower returns or provide a different skill to which he may be better suited. If his skill is no longer required he may be redundant in the short term. These are tough features of a market economy, however, much better than a world where you must fight (risk death) to gain rights to income or are born into an unequal world where you produce many more goods that others give back to you.

However, despite improvements we are not in the happiest world we can be. We have not moved to a world where "wage = marginal product" (if indeed this is where we should go – but I won’t go over that here).  

Power in a modern, post-industrial society still rears its ugly head and determines all our incomes. This is not the power of kings or early scrupulous industrialists, but more subtle and complex. Today it largely manifests itself in many ways, and I would highlight the following (i) inheritance of wealth (ii) gender (but not class, race or sexuality) (iii) networks and (iv) monopolies of information, knowledge and uncertainty. It should be also noted that these tools of power may themselves change over time. 

Much of these have discussed at length by others, so I won’t go into great detail. In short they work in the following ways:

(i)         Inheritance of wealth – everyone wants the best for their kids, but no-one person should start their life at a disadvantage. This article by nef outlines how privileges conferred across generations still have profound impacts on life outcomes in the UK. What’s more with inherited wealth there is an increased likelihood that the original wealth was captured by force and abuse of power (think of the aristocracy).

(ii)        Gender – the history of man has been exactly that and today there is still a pay gap between men and women - which is not explained by women taking mid-career breaks to have children. What’s more historic division of roles, means that a lot of women’s work is unpaid (e.g. domestic economy, care for the young and elderly) and gets worse in times of austerity

(iii)      Networks – internships for mates' children and the old boys networks are well trodden media areas. Even more worrying recently are claims the remuneration committees for our highest paid are closed shops with therich deciding on what the rich should be paid

(iv)       Information, knowledge and uncertainty  - this is one of the toughest to spot, indeed some great minds missed it during the growth of the banking sector in recent decades. Post-crisis the issues apparent in banking are now better understood. These sectors were meant to take people’s savings, pensions, insurance proceeds and invest them in long-term productive uses, whilst earning a return. However, the sector tended to self-serve using unequal distribution of information and knowledge to speculate and benefit the minority in the know (fee creaming by traders and asset managers, excessive securitisation, PFI profiteers, mis-selling of PPI, Goldman Sachs’ conflicts of interest, Madoff, excessive bonus culture). Such issues could exists in other sectors e.g healthcare, where our doctors know a lot more than us – but luckily a nationalised service combats such an effect.

These are factors everyone should be empowered to examine in their homes, communities and political structures. Ideally, you will go away, look at your surroundings and ask the questiondoes society roughly give back what I put in. If not, ask (i) whether someone is unfairly abusing their power, (ii) whether that someone is you and (iii) whether in some instances this submission or application of power may itself be useful (we give power to our parents, but ulitimately for our own protection).

Above all look around your own workplace. Be critical, ask for transparency and dispel the taboo that income should not be discussed.

On my part I have asked my company to consider seriously the 12 recommendations of the High Pay Commission. I will keep you updated on how I get on.

What a left-wing hamster should stand for..

Over the coming weeks and months I hope to share my views on british politics, economics, finance, social justice, the environment and culture. But before I do this I should probably let you know what this particular left leaning hamster believes in. The points below highlight my key poltical beliefs, which whilst not set in stone, are the ideals I apply in interpreting the world around us.

1. Happiness - the ultimate aim of any society is happiness that is universal (for all) and sustainable (both over one lifetime and generations)

2. The role of the left - The key concern of the left should be the inequality of happiness, and not any other intermediate measure. To be of the left is to believe (i) as a society we are judged by out unhappiest individuals and (ii) should seek collective solutions where any individual is forced into unhappiness by external shocks

3. Transition - developed economies need a gradual transition to more sustainable, happier economies - which only strong state action can deliver

4. We are who we are - individuals and society as a whole arrive into this world with baggage (history, culture, identities, religions, genetics) - we should not try to deny these when we seek change

5. A limited world - we face hard resources constraints (our lifetimes, the planet) - any system of organisation needs to take this into account and ensure resources are allocated efficiently

6. Our kids - we have a duty to future generations

7. Wages - wages should be linked to productivity and not power (however that manifests itself in the modern world)

8. Absolute needs - We have two broad categories of needs: (i) base / instinctual / material - these are food, shelter, security, health, respect/power/vanity, hedonism and sex and (ii) higher / consciousness driven /non-material - these are education, employment, political freedom, achievement, feeling part of a community / family / friendship group and self-actualisation. An indulgence of (i) that does not lead to or is derived from (ii) does not in general lead to happiness or a "good life". Examples include achieving food and shelter without employment or being a workaholic who rejects community and friends in order to consume high levels of food and hedonism.

9. Our evidence base - In deciding how we should organise in order to deliver goods and services, we should use an evidence-based critical approach i.e. only scaling up solutions that have been shown to be effective. Our evidence base should be scientific and critical, but ultimately have a sense check via anecdotal, philosophical and spiritual lenses.

10. Think long term - Life satisfaction and happiness outcomes have a lot more to do with long term planning, investment and good feedback systems than it has to do with short-term stimuli, nudges and trends.

11. Political reform -  The best political system is the most accountable, local and transparent. However, a social contract needs to be in place, in particular people should accept that certain freedoms need to be restricted by the state in order for the best long-term decisions to be made.

12. Our economy faces challenges - the modern British economy faces five major challenges (i) a mass redundancy of low-skilled workers (ii) skills shortages of higher skilled workers (iii) market failures - issues of entrenched monopolistic rent capture (landlords) and financial intermediation information asymmetries (greedy bankers) and (iv) high expectations - a generation has grown up on a debt-fuelled consumer boom, low prices on the back of low fuel prices and low developing country wages and a mirage of full employment. There will be growing discontentment as this is rolled back and (v) constrained ability to borrow to invest until lower levels of consumer, industry and government leverage have been achieved.