David Cameron says, “It’s time we admitted that there’s more to life than money, and it’s time we focused not just on GDP, but on GWB—General Wellbeing,” by which he means happiness. With Cameron’s endorsement, the cockle-warming politics of happiness has officially become a multi-partisan affair, no longer the property of Labour peer Richard Layard and other social democrats. And why shouldn’t it be? Certainly no one disputes that there is more to life than money, or more to politics than the size of the economy.
However, Cameron’s contrast implies that increased GWB might have to come at the expense of GDP growth and economic liberalisation. Yet if you really profess to care about happiness, you must care about economic freedom and economic growth too. Our happiness depends on them more than almost anything else.
So-called “happiness research” is conducted mostly with surveys that simply ask people how happy they are, and those answers are related to others about income, family situation, jobs and more. The most widely reported result is this: although average real income has more than doubled in developed countries since mid-century, average self-reported happiness has barely budged. Yet despite the flat happiness trend over decades, at any given time the wealthy are more likely than others to report themselves “very happy,” which has led a number of researchers to conclude that people care more about their relative position on the income ladder than their absolute level of wealth. Since the heartless laws of mathematics guarantee that no more than 20 per cent of the population can squeeze inside the top quintile of the income distribution, no matter how large the economy, it is tempting to think that the size of the economy, or its growth, don’t matter.
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