The epiphany came in 2006. At least, that’s when the future prime minister of Britain and Northern Ireland first went public when he said: “It’s time we admitted that there’s more to life than money, and it’s time we focused not just on GDP but on GWB – General Well-Being.” And now our beloved Office for National Statistics is to start collecting data on how happy we are. There’s an oxymoron for you: statistics on happiness. ONS data is dryness personified, and somehow, one of those dull ONS releases droning on about happiness seems just a tad odd.
But is DC right? Is it time economics ditched its dismal focus on money, and looked at the bigger picture? Is it time we focused on happiness instead?
It seems one of the prerequisites if you want to be an expert on happiness, is to be called Richard. Two of the more successful books on the economics of happiness are by Richard Easterlin, a prof at the University of Southern California, and Richard Layard at the LSE. Our Californian concludes that health and marriage are more important than wealth. The Brits see distribution of income as the key. It’s not how rich you are, it’s how rich you are relative to others.
Then again, a survey carried out by the University of Leicester, and produced by Adrian White, found that the four happiest countries in the world were all in the top ten in terms of GDP per capita ranking.
At the time, Mr White said: “… nation’s level of happiness was most closely associated with health levels (correlation of .62), followed by wealth (.52), and then provision of education (.51).” See: So wealth does matter: the world’s happiest countries.
But returning to the point about distribution of wealth being the key to happiness, this point is backed up by the fact that the Scandinavian countries, where income is distributed quite evenly, are among the world’s happiest. Denmark topped the University of Leicester poll.
But here are a couple of observations. It may be that status, rather than how rich we are relative to our peers, is the key. And it matters not how wealth is distributed, some people will always have more status that others.
Secondly, it’s not so much how rich we are relative to the rest of the country that counts, it’s how rich we are relative to our friends and neighbours. So, if we live in a flat in Chelsea, and drive around in a mid-range BMW, we may feel unhappy and a failure because we keep bumping into the person who lives in the penthouse upstairs and has a Ferrari parked outside.
It’s a tricky one measuring happiness. Mr Cameron once said we “need to move beyond a belief in the protestant work ethic alone.”
Maybe he is right, but, quite frankly, there does seem to be ever such a slight disconnect with his view on happiness, and the statements he and George make about the economy, and his views on a flexible labour force.
<hr />Investment and Business News is a succinct, erudite and informative roundup of today’s top news stories on business and the economy, with analysis thrown in. Sometimes amusing, frequently contrarian, often thought provoking, and always informative, Investment and Business News is free. To subscribe, click on the subscribe function at the top right hand corner of this page. By the way, did we say it’s
© Investment & Business News 2013