Economics has been regarded as a "dismal" science. While this is more or less a misnomer that stuck to the said field of study (for the origins of economics being referred to as a "dismal science," check this link), economists hope to understand more about the human psyche in order for them to incorporate the concept of "happiness" to their economic policies.
And recently, things seemed more... "blissful."
A recent article at The Economist documented the apparent successes of the economists' circle in bridging the gap between the colorful world of happiness and the cold science of economics.
No longer the dismal science?
One of the more surprising growth industries to have taken off during the current period of economic downturn and austerity has been “the happiness industry”—the increasing activity of economists (not philosophers) who study what constitutes happiness and make recommendations to governments about how best to increase it. This industry has recently achieved an early pinnacle of success with the publication of the first World Happiness Report. Commissioned for a United Nations Conference on Happiness, under the auspices of the UN General Assembly, it bears the imprimatur of Columbia University’s Earth Institute and is edited by the institute’s director, Jeffrey Sachs, and two happiness experts, Richard Layard of the London School of Economics and John Helliwell of the University of British Columbia. The report unmemorably finds that the world’s happiest countries world are in northern Europe (Denmark, Norway, Finland, Netherlands) and the most miserable are in Africa (Togo, Benin, Central African Republic, and Sierra Leone).
(Source: Link)
The "happiness" trend seemed to catch up fast on the big countries of the world.
According to the Washington Post, a group of experts including Daniel Kahneman, a psychologist who won the Nobel Prize in economics, met in December to draw up measures of “subjective well-being”. The group is financed by the American administration, and if its measures are deemed reliable they could become official statistics. If so, America would become the latest country to clamber aboard a happiness bandwagon.
Moreover, the article details the methodology of the "happiness indicators" employed by several countries to gauge the net satisfaction of its citizens.
Researchers break down people’s feelings into “affective happiness” (everyday ups and downs) and “evaluative happiness” (a person’s overall assessment of his or her life). They have constructed indicators that look at happiness from different vantage points, using questions such as “How happy were you yesterday?” (that is what Britain’s ONS asks); “All things considered, how satisfied are you with your life as a whole nowadays?” (from the European Social Survey); and “Taking all things together, would you say you are: very happy, quite happy, not very happy or not at all happy?” (the World Values Survey). The different answers give economists plenty to argue about.
The article states that the science of happiness (if it is indeed a science) is gradually being recognized by the world. The economists, meanwhile, want to go so far as to somehow "mathematicize" happiness.
They argue that happiness can be measured objectively; that it differs systematically across societies and over time; that happiness has predictable causes and is correlated to specific things (such as wealth, income distribution, health and political institutions); and that therefore it should be possible for the government to create the right conditions for happiness to flourish. The authors want governments to use happiness as a guide to public policy, rather as they use gross national product (GNP) now. But given governments’ (and economists’) recent record in managing GNP, it is not clear whether it really would be such a good idea for the government to decide it knows better than individuals do what constitutes their happiness and how they can best pursue it.
It would seem that the world's economists are optimistic about this new direction in their studies. However, while it pains me to be the party pooper, I am obligated to discuss the problems I perceive in what seems to be a new branch of economics.
1. Happiness is a profoundly abstract concept, and is therefore easily exploitable.
No matter how economists try to persuade me as to the merits of happiness as an economic barometer, I must point out the unbridgeable gap between abstracts and concretes. Happiness is a tricky word to be of use to an analytical science like economics, and is highly relative, depending on the frame of reference.
The questions used in the mentioned social surveys hardly poke the economic side of society. When faced with such questions, what guarantee do we have that the people will base their answers purely from the economic side of life? In all likelihood, they will also base their answers on their personal lives; relationships between families, self-esteem, etc. This will contaminate the statistics.
Perhaps a lack of clarity in the questionnaire can be brought up. However, should we attempt to clarify it, more problems might appear. Should the economists affirm that the surveys be answered purely from the economic side of life, human bias in terms of an ideal society will come in. Some people would prefer more government welfare, while some might be libertarians at heart. The survey will degenerate into nothing more than a political power play, something that is easily exploited by politicians.
Meanwhile, if we stick to the initial impression of the surveys, we'll have to deal with contaminated data samples. But what if the economists say that it is of crucial importance that people answer these surveys based from their personal lives?
The question now, is this? Of what purpose will it serve them? What does inquiring upon an individual's personal life possibly imply? That the economists intend to "help" the people change the life they're living? That they're willing to meddle with people's personal affairs, that they're willing to impose on their personal decisions? If not for these reasons, why would the intellectuals even want to know about these sensitive information?
Either interpretation gives us a series of profound problems that defeats the purpose of using happiness as an economic standard in the first place. Skewed statistics that can misinform the public, possibilities of political influence, possibilities of privacy invasions, using a highly abstract concept to judge an economy can even be dangerous, let alone highly impractical.
2. It diverts attention away from the real economic barometers.
I don't want to be labelled as "regressive," but I highly doubt the validity of happiness as a determinant of a healthy economy. On the other hand, we have objective standards of a good economy; Gross Domestic Product (GDP), Gross National Product (GNP), Consumer Price Index (CPI), the stock market, foreign exchange, among others. They are determined by mathematics and is therefore devoid of human bias, unlike "happiness." To effectively judge something, it is imperative that we make use of a standard that transcends human prejudice, which is why we have a set of criteria in talent shows and stuff.
Happiness is defined solely by human bias. It hardly projects any sign of objectivity whatsoever. This makes me all the more skeptical of using happiness as an "objective" determinant of economic prosperity.
The view that happiness is correlated to economic factors is too simplistic in my opinion. After all, human life is not just finance or entrepreneurship; it's a hodge-podge of a plethora of factors, like personal relationships, cultural upbringing, mental stability, among others.
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Perhaps happiness should be left in the hands of individuals, rather than forcing it in a government's economic tools. An old adage once said that happiness is man's ultimate goal. Maybe it should stay that way; the result of economic policies judged by objective standards should be happiness, and no other causal relationship should exist, as far as these things are concerned.
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