Friday, November 25, 2005

Can money make you happy?

That's part of the question raised in an article that I wrote for the Fraser Forum this month. Entitled "The Happiness Paradox," I write about the odd fact that we're wealthier, healthier, more educated but, it seems, no happier than we were about 60 years ago. The stagnation in happiness is a paradox, and it has given advocates of statism a new research field to use to buttress their silly claims that capitalism is terrible for people, and that we should prefer some other economic system.

We shouldn't, of course. One thing most commentators don't bother writing about is the fact that capitalist nations are significantly happier than non-capitalist ones. Indeed, isn't it at least somewhat surprising that something like 80 per cent of citizens of Western nations proclaim themselves to be happy? Agreed that there has been little improvement, but isn't the sheer fact of such high happiness, especially compared to any nation you please, a significant boost for defenders of capitalism?

Perhaps not. After all, we don't live in purely capitalist nations, and it is difficult to attribute increases in happiness to liberty in general apart from other things. Like, for instance, it's possible that there is something other than capitalism and civil & political liberties that correlates better with human happiness. Individual liberty might be piggybacking on some other cultural feature that tends to correlate with it, but is ultimately responsible for the happiness.

By way of explanation, think of evolution. The big, fat trouble with evolutionary explanations is that some assume the explanation of any given thing is good enough when we show that it is evolutionarily superior, or improves our survival chances, or is in some other way beneficial. But it needn't be. For instance, it may be that our opposable thumbs are great things, but our standing up might have come about around the same time and, say, could be no good. Or, since standing up seems really important, suppose we got opposable thumbs and extra hair around the same time. The thumb ensured our survival, say, but the hair is of no use (and maybe even a bad thing, by hypothesis). To explain the hair will require a different explanation than the one for the thumb. The latter fits evolutionary stories, the former requires some genetic tale, and the balancing of the benefits (thumb), with the burden (hair) that meant, in sum, our evolutionary chances are better.

Something similar might be going on with liberty and happiness. Supposing some other factor correlates with liberty (democracy, or welfare, or state-run medicine, and so on), it could be that other factor that is responsible for the happiness.

There is reason, however, to suspect otherwise. For one, we now know that the source of income is not irrelevant to our happiness. A few studies have shown that employment leads to greater happiness than any welfare state provision of an identical amount of money. If you're getting a thousand dollars a month from your job, and you could be getting a thousand dollars from the dole, or, interestingly, from your income trust, you would be wiser to choose the job if you care about happiness.

For two, in what I think may be one of the more significant findings in this field, Ruut Veenhoven has found that economic liberty alone boosts happiness, especially in poor countries! Let me be clear here: It isn't the wealth that comes from economic liberty that leads to happiness, it is the economic liberty alone, regardless of wealth-promotion, that has a statistically significant correlation with happiness. In a really cool quote he says (comparing other liberties like civil and political liberties): "economic freedom is most strongly related to happiness." Then concludes by saying that "This is a pleasant surprise for the right-wing free market lobby, but a disappointment for liberals like me." (p. 14)

Finally, there have been studies to suggest that political decentralization and greater individual control over the doings of the government (like through referendums) improves happiness. We can't conclude that the government doing less leads to greater happiness, but having less centralized government is better, in terms of happiness, than more centralized government. That, at least, points in the direction of greater liberty, even if it doesn't secure the case for it.

I think, given sufficient studies and evidence, we'll be able to seal up another reason for the expansion of liberty through happiness measurement. It would be neat to have an economic freedom of the world report take happiness into account. The Fraser Institute says "If it matters, measure it." Happiness matters. We should measure it.


Blogger Michael Cust said...

It's sad when academics start using 'liberal' in the incorrect sense of contemporary North America political language.

Veenhoven is likely a welfare liberal, a soft socialist, a social democrat, or something.

What he's not is a liberal. I'm a liberal. Peter Jaworski is a liberal.

7:37 PM  

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