The hippies were right all along about happiness

By Andrew Oswald
Published: January 18 2006

Politicians mistakenly believe that economic growth makes a nation happier. “Britain is today experiencing the longest period of sustained economic growth since the year 1701 – and we are determined to maintain it,” began Gordon Brown, the chancellor of the exchequer, in his 2005 Budget speech. Western politicians think this way because they were taught to do so. But today there is much statistical and laboratory evidence in favour of a heresy: once a country has filled its larders there is no point in that nation becoming richer.

The hippies, the Greens, the road protesters, the downshifters, the slow-food movement – all are having their quiet revenge. Routinely derided, the ideas of these down-to-earth philosophers are being confirmed by new statistical work by psychologists and economists.

First, surveys show that the industrialised nations have not become happier over time. Random samples of UK citizens today report the same degree of psychological well-being and satisfaction with their lives as did their (poorer) parents and grandparents. In the US, happiness has fallen over time. White American females are markedly less happy than were their mothers. Second, using more formal measures of mental health, rates of depression in countries such as the UK have increased. Third, measured levels of stress at work have gone up. Fourth, suicide statistics paint a picture that is often consistent with such patterns. In the US, even though real income levels have risen sixfold, the per-capita suicide rate is the same as in the year 1900. In the UK, more encouragingly, the suicide rate has fallen in the last century, although among young men it is far greater than decades ago. Fifth, global warming means that growth has long-term consequences few could have imagined in their undergraduate tutorials.

None of these points is immune from counter-argument. But most commentators who argue against such evidence appear to do so out of intellectual habit or an unshakeable faith in conventional thinking.

Some of the world’s most innovative academics have come up with strong evidence about why growth does not work. One reason is that humans are creatures of comparison. Research last year showed that happiness levels depend inversely on the earnings levels of a person’s neighbours. Prosperity next door makes you dissatisfied. It is relative income that matters: when everyone in a society gets wealthier, average well-being stays the same.

A further reason is habituation. Experiences wear off. A joint intellectual effort by psychologists and economists has got to the bottom of the way human beings adapt to good and bad events. Some researchers believe that after a pay rise people get used to greater income and eventually return to their original happy or unhappy state. Such hedonic flexibility also works downwards. Those who become disabled recover 80 per cent of their happiness by three years after an accident. Yet economics textbooksstill ignore adaptation.

A final reason is that human beings are bad at forecasting what will make them happy. In laboratory settings, people systematically choose the wrong things for themselves.

Yet surely, it might be argued, what about power showers, televised football, titanium wristwatches, car travel for all – are these not compelling evidence for the long arm of growth? Yes they are, but we need these because Mr and Mrs Jones have them, not because they make an intrinsic difference.

Economists’ faith in the value of growth is diminishing. That is a good thing and will slowly make its way into the minds of tomorrow’s politicians. Led by the distinguished psychologist Edward Diener of the University of Illinois, a practical intellectual manifesto signed by many of the world’s researchers entitled Guidelines for National Indicators of Subjective Well-Being and Ill-Being, has just begun to circulate on the internet. That document calls for national measures of separate facets of well-being and ill-being, including moods and emotions, perceived mental and physical health, satisfaction with particular activities and domains, and the subjective experience of time allocation and pressure.

Happiness, not economic growth, ought to be the next and more sensible target for the next and more sensible generation.

The writer is professor of economics at the University of Warwick.