Policy has an article in this month’s issue by Johan Norberg (who has a blog). I have posted earlier about Layard’s theories and other theories about how to maximise happiness in society. Layard (baldly summarised) believes money over a certain level doesn’t make you happy so progressive taxation is useful as are social policies like pushing for full employment – even if that is economically inefficient – because employment stability is very important in determining happiness (and since highly stratified incomes produce envy and the perceived need to match your neighbors which produces unhappiness).

Norberg correctly identifies that in societies where individuals have little hope of bettering themselves they tend to be unhappy and uses the example of communist states, and of states where there is low or no growth (Ireland in the 70s and 80s). It is true that low growth and high unemployment lead to unhappiness, but this is not inconsistent with Layard’s thesis – welfare states can have growth and low unemployment as well (though granted it seems to be more difficult).

He does have his finger on something when he says that, “the fact that growth has continued that makes it possible for us to continue to believe in the future”. But this I believe is something we need to work on educating people out of, both in schools and through the media. Unless we can find a way to ‘grow smart’ we will end up running into natural limits sooner or later – especially if developing countries take the same course. It may be true as Norberg says that the increase in wealth in developing countries continues to raise our overall levels of happiness, but it is also true that the rate of increase in happiness is slowing almost to a halt while the cost to our environment of the rise in wealth is increasing.

He also suggests, provocatively, that the welfare state reduces happiness because it takes away the challenges that we need to be happy. But the psychological research he cites refers to the benefits of challenges that are hard but within our power to tackle. The danger of states with inadequate safety nets are that many people living there are faced with challenges that are simply insurmountable – the challenge of getting your kids into university when the fees are not subsidised and the only jobs you can get don’t pay a living wage for example. And those challenges are not, I would suggest, conducive to happiness.

In the footnotes to his article I found the World Database of Happiness which has various interesting indices and lots of links to related papers.

An aside: I have become so used to being able to comment on blog postings or messageboards/comment boxes on media websites that it was irritating to find neither Johan’s blog nor Policy magazine (subheads ironically “ideas, debate, opinion”) have a means of instant
feedback (though at least they offer email addresses for private comment).