Should our politicians be serious about happiness? pt. 2

In my last blog, I set the context in which a "new" science and philosophy of happiness was gaining traction amongst a wide range of individuals and schools of thoughts. The blog ended with the question of why it was our politicians seemed to be the last group willing to talk seriously about the issue. This blog will explore some of these reason for this reluctance, and suggest some practical reasons why it does not need to be so:

(1) Happiness is a vague, subjective, fuzzy term - it doesn't deal with real issues faced by real people

This complaint seems to confuse means with ends. Why is it that we seek to prevent unemployment, poverty, crime and poor health? It is not enough that these are inherently bad things, it is the fact they adversely impact individuals: how they feel and how satisfied they are with their lives as a whole. In these cases it is not the objective, intermediate measure (unemployment, a low wage, facing a crime, a disease) that is the bad, but the interaction between these facts and the subjective impact that they have on an individual (psychological burden, hunger / stress, pain, feeling awful) that matters. 


This distinction may feel a bit futile, however targeting happiness not only deals with the real issues, but it has the potential to do so in a more targeted way that brings about more effective change. Point 2 looks at this in more detail.

(2) Everyone, including politicians, is already trying to promote happiness. Instead of wasting their time on a "happiness agenda", politicians should spend their time on the detail and nuts of bolts of making sure government is run efficiently, intelligently and fairly.

It is true that in the developed world. political and economic policy over the last few centuries has improved well-being - we can look at agricultural policy, welfare, universal health and education provision. However, more recently (post-war period) policy has been pre-occupied with these intermediate goals rather than more direct ones. No amount of technocratic competency will get you to where you're going if you have no target destination.  


Take unemployment. In traditional macroeconomics, unemployment is a trade-off we face with inflation and productivity. We tend to focus on systems that have a healthy balance of all three items, arguing that low inflation (less of the "squeezed middle") and productivity (potential income growth) are also desired by people and hence we tolerate some unemployment. This is true under a  neo-classic economic framework where higher consumption over time is equated with better life outcomes. This is where subjective happiness really comes into its own. The Easterlin paradox remains true as it ever was. Increases in income over time in developed countries have negligible impacts on happiness. Any effects that do exist tend to tail off at higher levels of income. What's more, people with materialistic values tend to be unhappier. 


A happiness agenda is not what currently drives our politicians. A more efficient, intelligent and fair thing to do would be to take it seriously.

(3) Aren't some of the recommendations anti economic growth? Doesn't happiness now mean misery tomorrow?

Yes they are. Some of the stylised facts of well-being research (see nef publication) - lower hours, more time with friends and family, higher utilisation of labour, more equal wages, lower levels of leverage, a more rounded education all have very serious anti-growth implications. But we do not need to worry about these. The neo-classical theory of income and consumption as a measure of well-being simply falls short. GDP as a measure of society's progress is out-of-date and potentially harmful. Unemployment, on the other hand, is a real happiness issue and we should think of ways to ensure full employment in a low / no growth environment. 


This is no easy task, but some interesting ideas have come from a happiness school of thought. For instance, how about sharing work hours? Is it not strange that we live in a world where our parts of our workforce are simultaneously over-worked and under-worked. 

(4) There is not enough good quality, reliable data for this to be a serious policy tool. 

This is not true - surveys with large samples sizes have been probing people about their subjective levels of well-being since the 1970's and 80's for instance the US General Social Survey, the European Values Survey and the British Household Panel Survey. These have produced useful academic insights - see here for a review of studies to date. What's exciting is that new surveys are being commissioned by large national and international bodies, such as the UK's Office for National Statistics, the OECD and a new body commissioned by FrenchPresident Nicolas Sarkozy and headed by economist heavyweights Jospeh Stiglitz and Amartya Sen. Subjective well-being measures are bound to make a bigger impact on policy making in years to come. 

(5) The state should have nothing to do with people's happiness. People are happier when state is not involved in their personal choices.

People are unhappy where their freedom is restricted and a nanny state is in place - just look at the failure of societies that have tried to organise themselves for the greater good e.g. Soviet Russia. But this is precisely the point - any state that seriously cared about happiness and the happiness of their population would not advocate such restrictions of freedom. The evidence to date displays two stylised facts: (i) trust in key public institutions – for example, government, the police and the legal system – is associated with higher life satisfaction and (ii) there is a positive association between democracy and life satisfaction. 


A trusted, well-functioning and representative government tends to make people happier. But this does not mean the state should not do anything else. The government not only needs to ensure that it governs institutions that people can trust and defend democratic principles, but also has the duty to pursue collectivist actions that undoubtedly makes us happier. Policies exist today, but can be improved, whether they be economic policy that delivers full employment, state backed healthcare or welfare expenditure. The evidence suggests that higher public spending and benefit entitlements appear to be associated with higher well-being at the national level (although these do need to be sustainable).


Of course, the balance of government intervention and individual freedom is something that has been discussed for several millennia and it is not the place to discuss here. However, simply stating that politicians should not at least think about happiness seems odd when the state has the potential to significantly improve our happiness.

(6) This is all a bit woolly - what does it mean in reality for policy?

Policy is a minefield, with lots of vested interests (often driven by power) pulling the strings at any one time. However, with a strong evidence base, happiness has the ability to really drive policy that improves all our lot. The data so far points out (I select a few excerpts):

• Unemployment has a detrimental impact on a person's happiness that outweighs the loss of income

• The relationship between income and happiness over time in developing countries is non-existent or at best weak. 

• People are however, concerned about relative income (comparing themselves to their peer group)

• Good health is strongly related to happiness

• Divorce or separation strongly negatively impacts on happiness

• Whether the level of inequality in a society affects individuals' happiness is mixed, however higher welfare spend is associated with higher happiness

• The relationship between happiness and hours worked is u-shaped (people are initially happier when working longer hours, but this tails off at a certain point)

• Having debt is a bad, unless it is for investment or mortgages

• Commuting time is strongly linked to unhappiness

• Spending on child services and family support is strongly linked to happiness

• Job security can be as important as levels of pay

• Social trust, time for social activities, volunteering and giving are all associated with higher well-being

• Subjective health, physical activity and good sleep are 
all associated with higher well-being

• Residential areas which feature multi-dwelling buildings, high levels of deprivation, high rise architecture and have high crime levels and poor walkability is bad

• Levels of education have little impact on happiness (once income effects are stripped out)

• Genetic impacts are accountable for c. 50% of differences in happiness

• The age and happiness relationship is u-shaped dipping between 35 to 50 (we are happier when we are young or old, but not middle-aged)

• Those with materialist views or driven by extrinsic values tend to be less happy

Now a lot of this just seems obvious - but our lives simply do not reflect these facts, because people do not take happiness seriously. 

In my view if we really believed in happiness: full employment and not growth, inflation and productivity would be the goal of economic policy; work hours would be distributed better amongst the population; preventative health measures would be given a big priority (e.g. giving time off work for unhealthy people to exercise, banning certain foods and food manufacturing processes); welfare spending on families and child care would be at Scandinavian levels; good sleep and cutting the need for commuting would be policy objectives; working long hours would be cracked down (e.g no opt-out of 48 hour working week); unsecured credit would be heavily regulated and the materialistic lifestyle discouraged (e.g. advertising bans, progressive consumption taxes); education would be more holistic not only giving people the skills to earn a living but also giving children the tools to understand happiness including their own genetic dispositions; life would be more oriented on cheaper social activity, spending time within the community and giving or volunteering; finally residential areas would represent a mix of the rich and poor to avoid "ghettoisation" and the incredible stupidity of high rise estates.

(7) Can we expect our politicians to expel the virtues of happiness, when they themselves are unhappy?

This is a big factor that should not be underestimated. Politicians may find it hard to campaign for fewer hours, more distribution, more time socialising, less materialism when they themselves do not exhibit these characteristics. The back lash against David Cameron for "not working hard enough" is case and point. It is true that for our politicians to spread happiness, they need to be happy and we should encourage them to be so.

Hopefully, I have shown that politicians can and more importantly should take happiness seriously. I have argued that happiness is not a fuzzy term, but the ultimate aim of policy; that being anti GDP growth is not bad economics; there is data out there to support policy and this is improving; there is a good case for the state to be involved; the evidence already points to clear areas of policy reform; but that we need our politicians to be happier in order to distribute happiness.

I for one believe that taking happiness seriously can be a real catalyst for change. Politicians need to be bold and can start by (i) defining happiness in simple terms (ii) giving it voice and (ii) make sure it is at the absolute core of all government policy.

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.