The government can’t make you happy, but it can try
The American constitution’s deference to individual freedom appears quaint even archaic today. The fledgling 18th century government was created to engender “life, liberty and the pursuit of happiness”: crucially, not happiness itself.
Yet in the 20th century governments worldwide started trying to maximise national income and minimise unemployment. Witness the hammering politicians receive if gross domestic product starts to falter or the unemployment rate rises.
Now it is fashionable to try to maximise happiness too, rather than simply leave people free to pursue it themselves. As Aldous Huxley foresaw in the 1930s, private happiness has entered the purview of public policy.
Since 2010 the British and French governments have started using surveys to track `national happiness’. Australia’s own Treasury introduced a `wellbeing framework’ to guide its advice to government in 2005, “open to both subjective and objective notions of wellbeing”’, including happiness.
“This reminds staff to consider and outline the impacts [of proposed policies] on both efficiency and distribution’‘, the Treasury notes, implying income inequality can make people unhappy.
But new surveys of people’s life satisfaction make a mockery of this approach, lending support to the timeless adage money doesn’t make you happy.
Princeton economics professor Angus Deaton has shown self-reported happiness since 2008, as measured by daily surveys of millions of Americans, tracked sudden gyrations in the stock market far better than it did people’s own income or employment status, even among those who didn’t own any shares.
“Measures like happiness are more affected by the arrival of St Valentine’s Day than a doubling of unemployment,” he concludes in his 2012 Sir John Hicks lecture at Oxford University.
“There are serious problems in using well-being measures for tracking the performance of an economy over time because they can’t be expected to change much in response to even historically large changes in economic activity”. he adds.
A new Australian study from the Melbourne Institute, which looked at how weather affected responses to a comprehensive survey of life satisfaction, is equally sceptical. One of the authors, economist John Feddersen, says it shows a sunny day increases individuals’ happiness as much as doubling their income, holding all other factors constant.
The surveys, where respondents reported their lifetime satisfaction between zero and 10 along with their other socio-economic characteristics, also showed extra sunlight boosted men’s happiness more than it did women’s, while windy days disproportionately made women unhappy.
The authors pointed out the influence of day-to-day weather affected life satisfaction by a similar amount to acquiring a mild disability, defined as one which didn’t affect the ability to work.
Increasing household income by 10 per cent had practically no impact on happiness. Indeed, factors entirely out of government’s control were overwhelmingly more relevant, such as the inherent propensity to be miserable or chirpy.
“It is very difficult for governments to try and improve reported life satisfaction,” says Professor Wooden, another co-author.
The impact of changes in income and weather, although of similar size, were nevertheless very small; people’s outlooks are remarkably resilient. “Even very large changes in circumstances tend not to change life satisfaction by even one unit on the 1 to 10 scale,” he adds, pointing out being separated sapped happiness by 0.4, a little less than acquiring a severe disability did.
“Substantially more work is needed if as advocated by the governments of the UK and France - we genuinely intend to use these measures to evaluate social progress and assess government policy,“Dr Feddersen tells The Punch..
Not only do these findings cast doubt on the validity of surveys of `wellbeing’ that have not controlled for the weather, but they undermine the increasingly fashionable trend for governments to try and improve their citizens’ happiness.
Steeply increasing marginal income tax rates, which every economist concedes crush economic activity and ultimately make everyone worse off, are based on the idea that dollar going to a richer person generates less `wellbeing’ than a dollar doing to a poorer person. If that is not true than why should we endure the massive economic costs and complexity of progressive taxation?
Such a move might actually boost happiness to boot. Government can’t do much about people’s private lives, but the study showed unemployment caused reported happiness to fall 17 times as much as a 50 per cent cut in come.
Cutting personal and business taxes indubitably creates the most favourable environment possible for job creation.
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