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The Economics of Happiness
NEW YORK "“ We live in a time of high anxiety. Despite the world's unprecedented total wealth, there is vast insecurity, unrest, and dissatisfaction. In the United States, a large majority of Americans believe that the country is "on the wrong track." Pessimism has soared. The same is true in many other places.
Against this backdrop, the time has come to reconsider the basic sources of happiness in our economic life. The relentless pursuit of higher income is leading to unprecedented inequality and anxiety, rather than to greater happiness and life satisfaction. Economic progress is important and can greatly improve the quality of life, but only if it is pursued in line with other goals.
In this respect, the Himalayan Kingdom of Bhutan has been leading the way. Forty years ago, Bhutan's fourth king, young and newly installed, made a remarkable choice: Bhutan should pursue "gross national happiness" rather than gross national product. Since then, the country has been experimenting with an alternative, holistic approach to development that emphasizes not only economic growth, but also culture, mental health, compassion, and community.
Dozens of experts recently gathered in Bhutan's capital, Thimphu, to take stock of the country's record. I was co-host with Bhutan's prime minister, Jigme Thinley, a leader in sustainable development and a great champion of the concept of "GNH." We assembled in the wake of a declaration in July by the United Nations General Assembly calling on countries to examine how national policies can promote happiness in their societies.
All who gathered in Thimphu agreed on the importance of pursuing happiness rather than pursuing national income. The question we examined is how to achieve happiness in a world that is characterized by rapid urbanization, mass media, global capitalism, and environmental degradation. How can our economic life be re-ordered to recreate a sense of community, trust, and environmental sustainability?
Here are some of the initial conclusions. First, we should not denigrate the value of economic progress. When people are hungry, deprived of basic needs such as clean water, health care, and education, and without meaningful employment, they suffer. Economic development that alleviates poverty is a vital step in boosting happiness.
Second, relentless pursuit of GNP to the exclusion of other goals is also no path to happiness. In the US, GNP has risen sharply in the past 40 years, but happiness has not. Instead, single-minded pursuit of GNP has led to great inequalities of wealth and power, fueled the growth of a vast underclass, trapped millions of children in poverty, and caused serious environmental degradation.
Third, happiness is achieved through a balanced approach to life by both individuals and societies. As individuals, we are unhappy if we are denied our basic material needs, but we are also unhappy if the pursuit of higher incomes replaces our focus on family, friends, community, compassion, and maintaining internal balance. As a society, it is one thing to organize economic policies to keep living standards on the rise, but quite another to subordinate all of society's values to the pursuit of profit.
Yet politics in the US has increasingly allowed corporate profits to dominate all other aspirations: fairness, justice, trust, physical and mental health, and environmental sustainability. Corporate campaign contributions increasingly undermine the democratic process, with the blessing of the US Supreme Court.
Fourth, global capitalism presents many direct threats to happiness. It is destroying the natural environment through climate change and other kinds of pollution, while a relentless stream of oil-industry propaganda keeps many people ignorant of this. It is weakening social trust and mental stability, with the prevalence of clinical depression apparently on the rise. The mass media have become outlets for corporate "messaging," much of it overtly anti-scientific, and Americans suffer from an increasing range of consumer addictions.
Consider how the fast-food industry uses oils, fats, sugar, and other addictive ingredients to create unhealthy dependency on foods that contribute to obesity. One-third of all Americans are now obese. The rest of the world will eventually follow unless countries restrict dangerous corporate practices, including advertising unhealthy and addictive foods to young children.
The problem is not just foods. Mass advertising is contributing to many other consumer addictions that imply large public-health costs, including excessive TV watching, gambling, drug use, cigarette smoking, and alcoholism.
Fifth, to promote happiness, we must identify the many factors other than GNP that can raise or lower society's well-being. Most countries invest to measure GNP, but spend little to identify the sources of poor health (like fast foods and excessive TV watching), declining social trust, and environmental degradation. Once we understand these factors, we can act.
The mad pursuit of corporate profits is threatening us all. To be sure, we should support economic growth and development, but only in a broader context: one that promotes environmental sustainability and the values of compassion and honesty that are required for social trust. The search for happiness should not be confined to the beautiful mountain kingdom of Bhutan.
Jeffrey D. Sachs is Professor of Economics and Director of the Earth Institute at Columbia University. He is also Special Adviser to United Nations Secretary-General on the Millennium Development Goals.
Copyright: Project Syndicate, 2011. www.project-syndicate.org
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Username Password New registration Forgotten password gregjfisher 05:31 29 Aug 11This is a very good post from Jeffrey Sachs. Happiness in life, including the avoidance of suffering, is clearly the aim of all normal people so it makes sense for economists & policy makers to be guided by that.
We ought to be careful, however, in being prescriptive about other people's happiness; and also in thinking about the policy implications. The ideal, in my view, is for a government to enable, and to remove constraints on, each citizen in pursuing their own happiness. Part of this anabling concerns ethical values, so that citizens do not impose on others' pursuit of happiness; and time-consistency / sustainability by valuing the happiness of future generations.
There is nothing wrong with making value statements, of course, e.g. concerning fast food and obesity but we should steer clear of assuming that fast food does not make some people happy. It's their choice.
In the UK, there appear to be two broad approaches to politics of happiness, which, if project-syndicate does not mind me referring to, I discussed in a seperate blog - alturl.com/nhwu3. Broadly speaking there is the "social welfare function" approach, which makes a classic coarse-grained aggregation mistake; and there is the approach that respects idiosyncracies. The latter, in my opinion, is far more preferable.
Greg Fisher
ricardoisea 05:36 29 Aug 11I agree with the fundamental claim of profesor Sachs that economic growth is only one factor, among many, that can improve the quality of life of peoples. However, I think that it is a bit dangerous just to shift our attention to the subjective (and purely utilitarian) category of “happiness” since it may also lead us to unjust social outcomes. As professor Amartya Sen would say, focusing on happiness -rather than on the fundamental freedoms that peoples can actually enjoy - may be very unfair to the most vulnerable segments of the society because they may be subjected to “psychological adjustment to deprivation”. As Sen stated in his Development as Freedom (pp . 62), “It is sensible enough to take note of happiness, but we do not necessarily want to be happy slaves or delirious vassals”. Keep this in mind when you read news as, for example, a new poll from the cuban government saying that 99.9% of its population reported to be “happy”. It is something missing in the notion of happiness: the intrinsic importance of freedom.
JoeColucci 06:00 29 Aug 11Greg made some important points below--all of the public health threats Sachs mentions also create some (possibly very significant) amount of happiness. He's right to focus on the public health role of combating addiction, which can lead to overconsumption of TV/cigarettes/fast food/whatever, and decreased happiness because of it, but the distinction between preventing addiction and preventing people from doing anything that is at all harmful is important.
I'm here mostly to make a factual correction: it's not yet true that a third of Americans are obese. The national obesity rate amongh adults is 27.6%; childhood obesity is somewhat lower. overweight is certainly much more prevalent, and both rates are rising, but we're not at a third yet.
AUTHOR INFO Jeffrey D. Sachs Jeffrey D. Sachs is Professor of Economics and Director of the Earth Institute at Columbia University. He is also Special Adviser to United Nations Secretary-General on the Millennium Development Goals. MOST READ MOST RECOMMENDED MOST COMMENTED The Second Great Contraction Kenneth Rogoff Is Capitalism Doomed? Nouriel Roubini A Contagion of Bad Ideas Joseph E. Stiglitz Europe's Central Bank at Sea Mohamed A. El-Erian The Tea Party's Modest Proposal Simon Johnson A New World Architecture George Soros America's Political Class Struggle Jeffrey D. Sachs No Time for a Trade War Joseph E. Stiglitz The Second Great Contraction Kenneth Rogoff Did the Poor Cause the Crisis? Simon Johnson Is Capitalism Doomed? Nouriel Roubini The Tea Party's Modest Proposal Simon Johnson A Dim Light on Global Warming Bjørn Lomborg The Manufacturing Imperative Dani Rodrik The Keynes-Hayek Rematch Robert Skidelsky ADVERTISEMENT PROJECT SYNDICATEProject Syndicate: the world's pre-eminent source of original op-ed commentaries. A unique collaboration of distinguished opinion makers from every corner of the globe, Project Syndicate provides incisive perspectives on our changing world by those who are shaping its politics, economics, science, and culture. Exclusive, trenchant, unparalleled in scope and depth: Project Syndicate is truly A World of Ideas.
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This is a very good post from Jeffrey Sachs. Happiness in life, including the avoidance of suffering, is clearly the aim of all normal people so it makes sense for economists & policy makers to be guided by that.
We ought to be careful, however, in being prescriptive about other people's happiness; and also in thinking about the policy implications. The ideal, in my view, is for a government to enable, and to remove constraints on, each citizen in pursuing their own happiness. Part of this anabling concerns ethical values, so that citizens do not impose on others' pursuit of happiness; and time-consistency / sustainability by valuing the happiness of future generations.
There is nothing wrong with making value statements, of course, e.g. concerning fast food and obesity but we should steer clear of assuming that fast food does not make some people happy. It's their choice.
In the UK, there appear to be two broad approaches to politics of happiness, which, if project-syndicate does not mind me referring to, I discussed in a seperate blog - alturl.com/nhwu3. Broadly speaking there is the "social welfare function" approach, which makes a classic coarse-grained aggregation mistake; and there is the approach that respects idiosyncracies. The latter, in my opinion, is far more preferable.
Greg Fisher
I agree with the fundamental claim of profesor Sachs that economic growth is only one factor, among many, that can improve the quality of life of peoples. However, I think that it is a bit dangerous just to shift our attention to the subjective (and purely utilitarian) category of “happiness” since it may also lead us to unjust social outcomes. As professor Amartya Sen would say, focusing on happiness -rather than on the fundamental freedoms that peoples can actually enjoy - may be very unfair to the most vulnerable segments of the society because they may be subjected to “psychological adjustment to deprivation”. As Sen stated in his Development as Freedom (pp . 62), “It is sensible enough to take note of happiness, but we do not necessarily want to be happy slaves or delirious vassals”. Keep this in mind when you read news as, for example, a new poll from the cuban government saying that 99.9% of its population reported to be “happy”. It is something missing in the notion of happiness: the intrinsic importance of freedom.
Greg made some important points below--all of the public health threats Sachs mentions also create some (possibly very significant) amount of happiness. He's right to focus on the public health role of combating addiction, which can lead to overconsumption of TV/cigarettes/fast food/whatever, and decreased happiness because of it, but the distinction between preventing addiction and preventing people from doing anything that is at all harmful is important.
I'm here mostly to make a factual correction: it's not yet true that a third of Americans are obese. The national obesity rate amongh adults is 27.6%; childhood obesity is somewhat lower. overweight is certainly much more prevalent, and both rates are rising, but we're not at a third yet.
Project Syndicate: the world's pre-eminent source of original op-ed commentaries. A unique collaboration of distinguished opinion makers from every corner of the globe, Project Syndicate provides incisive perspectives on our changing world by those who are shaping its politics, economics, science, and culture. Exclusive, trenchant, unparalleled in scope and depth: Project Syndicate is truly A World of Ideas.
Project Syndicate provides the world's foremost newspapers with exclusive commentaries by prominent leaders and opinion makers. It currently offers 54 monthly series and one weekly series of columns on topics ranging from economics to international affairs to science and philosophy.
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