Tag Archives: eudaimonia

A Short Blog Post on a Very Big Question: Well-Being and Policy

Here in the UK, a general election looms. Key themes are common to every western democracy, albeit with a few local characteristics; that is, economic growth, prosperity (narrowly defined around income and wealth), inequality (median wage growth or the lack thereof) and, to a degree, well-being (in the UK’s case proxied by arguments over the NHS). Climate change and the environment will be foot-noted at best.

So could we do better? Emphatically, yes.

To commence with, every politician (and, in fact, everyone), regardless of political persuasion, should read the report “Well-Being and Policy” published by the Legatum Institute last year. The executive summary is here and the full report here. Note the report is written by a suite of top-ranked economists including Angus Deaton and Richard Layard.

The report makes a compelling case that the young discipline of ‘well-being and happiness’ has now matured sufficiently to drive policy. Following from this, my recommendation is that every party organises its manifesto around the three major types of happiness set out in the report (and for the last few years in this blog):

  1. Life satisfaction: how we evaluate our lives
  2. Affect: the daily positive feelings (happiness, joy, contentment) and negative feelings (anger, sadness, fear, depression and so on) we experience
  3. Eudaimonia: whether we feel our lives are meaningful

Where does GDP, income and wealth show up in the above trilogy? They show up quite a lot in life satisfaction, but not so much in affect and eudaimonia. So let’s just drill down into life satisfaction a bit more. We can see its principal components here (click for larger image):

Impact of Policy A upon Life Satisfaction jpeg

For simplicity, let us ignore the eudaimonia and affect forms of happiness and presuppose that policy was purely aimed at the life satisfaction and its determinants as detailed above.

Measured against this new metric, a government could embark on a green agenda that made the UK totally fossil fuel free by, say, 2030 as long as sufficient improvements were made with respect to well-being as it relates to employment, education, family, community, environment, physical heath and mental health such that this offsets any loss in well-being from income. If this were possible, then we would have made a net positive policy choice. In short, we can have our cake and eat it: a society with a higher level of well-being and a society that isn’t destroying the well-being of future generations.

Actually, it gets even easier than that. The entire system as it stands is built around valuing consumption as the main driver of happiness. How many adverts over the last month have you seen admonishing you to cultivate an allotment as opposed to buying an SUV? Yet the evidence in the happiness literature is quite specific: engaging in a community recreational pursuit has a far greater impact on happiness than, say, purchase of a new car (on the impact of auto purchases, see here). Indeed, it is somewhat miraculous that non-monetary forms of happiness have survived the onslaught of a system that values nothing that cannot be bought.

Traditionally, economics has gone with the maxim of revealed preference; that is, look at what people do, not what they say. In short, if they are doing it, by definition it is making them happier. But psychological studies (and more recently economic studies) show that the link between what people do and whether what they do makes them happy is far more tenuous.

Let’s take cigarettes. A study by Gruber and Mullainathan demonstrated that by taxing cigarettes, the government made smokers happier by forcing them to cut down or stop smoking. By extension, in a world where we are continually persuaded to consume, we may work excessively and incur too much debt. By constricting our consumption choices, the government could actually make us use our time to secure far superior sources of happiness than those just founded on the acquisition of consumer goods.

In conclusion, what every politician should be peddling is growth in well-being–everything else is irrelevant.

Chart of the Day, 31 Jan 2015: Happy Danes, Sad Greeks

The Atlantic has just published a fabulous article entitled “The Danish Don’t Have the Secret to Happiness“.  It is a response to a myriad of charts that look like this (taken from a tongue in cheek article in the British Medical Journal that The Atlantic references):

Life Satisfaction jpeg

Michael Booth, the author of the Atlantic article, is a Danish happiness cynic, questioning the happy state of Denmark on three fronts. He posits that

1. Danish happiness is a false construct arising from low expectations,

2. the boring nature of Danes allows them to remain happy, and

3. their smugness will ultimately lead to the nation’s final demise.

The low expectations argument is a restatement of what the happiness economist Caroline Graham calls the ‘happy peasants and miserable millionaires’ paradox (see, for example, here). According to her, our happiness set point can be a function of our surroundings.

While the research confirms the stable patterns in the determinants of happiness worldwide, it also shows that there is a remarkable human capacity to adapt to both prosperity and adversity. Thus, people in Afghanistan are as happy as Latin Americans – above the world average – and Kenyans are as satisfied with their healthcare as Americans. Crime makes people unhappy, but it matters less to happiness when there is more of it; the same goes for both corruption and obesity. Freedom and democracy make people happy, but they matter less when these goods are less common. The bottom line is that people can adapt to tremendous adversity and retain their natural cheerfulness, while they can also have virtually everything – including good health – and be miserable.

Indeed, an individual’s happiness set point can not only be a function of relative health, wealth, beauty and so on relative to one’s peers but also the same yardsticks measured against one’s past life. So how about the Greeks? Are they adapting to their new straightened circumstances? According to OECD data, the answer must be “no” or at least “not yet”. From the “How’s Life in Greece, May 2014” survey, life satisfaction comes in at around 4.7 out of 10, which puts Greece at the bottom of the OECD (here).

Further, while life satisfaction can be dubbed a function of the remembering self (when I sit down in a chair and think of my life, am I satisfied), people’s happiness as also related to their experiencing self (using the Nobel prize winner Daniel Kahneman’s terminology– see my post here). In short, am I cold, hungry, stressed, anxious , sad and/or in pain; or am I warm, replete, joyful, relaxed, rested and/or content? The OECD reports that only 52% of Greeks report having more positive than negative experiences in an average day (the lowest in the OECD) compared with an average of 76%.

For Greece to live with long-term austerity, Angela Merkel and the Troika must believe that Greek happiness indicators must, in the course of time, reset upwards. Unfortunately, they haven’t been reading the happiness literature in sufficient depth. While life satisfaction can adapt, adaption is generally a reaction to a set of circumstances that you have grown up with. Such forms of satisfaction lack what Graham calls “agency” or “the capacity to pursue a fulfilling and purposeful life”.  And once you have tasted “agency” you don’t want to lose it.

The appeal of Syriza, and its slogan of “hope”, is its potential to restore a degree of agency to the Greek people. Whether they can deliver this agency is a different question. In reality, income and wealth bestow a high degree of agency since they give us the financial wherewithal to make choices. However, agency can still arise from non-financial means, such as having the ability to adopt a non-conventional lifestyle, move from one area to another, change career, better one’s education and gain access to art and culture.  To stop disillusionment setting in, Syriza will have to put much effort into the fostering of such sources of low cost agency.

Happiness can be viewed from other vantage points too. Many scholars of happiness have identified eudaimonia as a source of happiness. This is sometimes described as human flourishing, but I prefer to view it as the sense of participating in and contributing to something greater than one’s own life. Past political movements have tapped into eudaimonia to give their followers a sense of shared propose and even destiny–sometimes, of course, to disastrous effect. However, at its best, it can be a fuel for transformational social movements that enthuse and enrich those advancing the cause as much as the final beneficiaries. Alexis Tsipras has certainly given Greeks a vision of change that could stimulate eudaimonia, but whether this can morph into a philosophy or ideal that has some staying power beyond the post-election honeymoon is a different question.

Meanwhile, for Danes seeking eudaimonia, a temporary move to Greece would not be a bad idea. But remember that the Danes always have the option of returning to Denmark and restocking on more mundane sources of happiness. The Greeks don’t.