Happiness, Health and Inequality

Before we get too far into the new year, let’s not overlook the year-end Economist, which had “Happiness (and How to Measure It)” on its cover.

Despite its prominent placement, the topic of happiness hasn’t gotten to prime time. The year end issue has always showcased interesting, often oddball, but never terribly serious pieces (other stories in the issue include “The Etiquette of Bribery,” “Cured Meat,” and “Shopping and Philosophy.”)

On the surface, the gives a seemingly lightweight topic considerable respect. Happiness was a central concern of early economists. Jeremy Bentham (1748-1832), who was in many ways ahead of his time (he advocated animal rights, divorce, free trade and homosexuality), thought that the objective of public policy was to create the greatest happiness of the greatest number, which he called the principle of utility.

Unfortunately, later economists chose instead to focus on things they could readily measure (plans for a “hedonimeter” never came to fruition), and consumption and production were generally treated as proxies for utility.

The pendulum appears to be swinging back:

Daniel Kahneman, a psychologist at Princeton University who won the Nobel prize for economics in 2002, reckons people are not as mysterious as less nosy economists supposed. “The view that hedonic states cannot be measured because they are private events is widely held but incorrect,” he and his colleagues argue….They can look into people’s eyes; or better still, their brains. People who confess to feeling happy also grin more than others. And they mean it: they smile with their eyes (a contraction of the orbicularis oculi facial muscles), not just their mouths. People’s self-reports also tally roughly with what electrodes planted on their scalp reveal about the frequency and voltage of electrical waves in their left forebrain, which sparks up when they are feeling good.

The piece continues with some generalizations (experiences produce more pleasure than commodities), a discussion of the role of status competitiveness (“people compete in costly ‘arms races’, knowing that if they do not work harder, they will lose their standing to someone who does”), and the implications of the work of happiness guru Mihaly Csikszentmihalyi (in some fields, activities that make the workers happy are also consistent with success, while in others, they are in conflict).

However, perhaps in keeping with its placement, the article breezes past or omits to mention areas where social psychologists and economists are at odds with one another. Traditional economic thinking has it that more goods produce greater satisfaction, but various surveys (such as one by the London School of Economics that has been conducted since the 1960s, and the “World Values Survey” that has been done periodically since 1981) have found that the happiest countries are poor ones (the LSE ranked as number one a few years ago; a more recent World Values Survey put at the top). Increasing GDP has not increased the happiness ratings of Western European countries or Japan. While some surveys find the wealthy are slightly happier than other people, others found that once basic material needs are met and people have a modest cushion of savings, more money does not make them more content. In fact, a 2006 published in Science that had participants take a more detailed account of their day found that people with higher incomes had less fun.

And what makes people unhappy? Losing one’s job makes people very unhappy and often leads to depression. In fact, income inequality not only makes people unhappy but actually reduces their life expectancy, and not for the reasons you would think. The Financial Times’ Michael Prowse :

But recent epidemiological research suggests that finance ministers, too, may some day be required to issue health warnings. There are good reasons to believe that policies that promote greater economic inequality – such as budgets that slash top tax rates – cause higher rates of sickness and mortality….

In Britain, these new arguments are most closely associated with Richard Wilkinson, a professor at Nottingham University’s medical school. Wilkinson has spent much of the past two decades painstakingly assembling the evidence for a link between inequality and sickness. But researchers elsewhere, such as Ichiro Kawachi and Bruce Kennedy of the School of Public Health at Harvard University, have independently confirmed many of his claims.

Those who would deny a link between health and inequality must first grapple with the following paradox. There is a strong relationship between income and health within countries. In any nation you will find that people on high incomes tend to live longer and have fewer chronic illnesses than people on low incomes.

Yet, if you look for differences between countries, the relationship between income and health largely disintegrates. Rich Americans, for instance, are healthier on average than poor Americans, as measured by life expectancy. But, although the US is a much richer country than, say, Greece, Americans on average have a lower life expectancy than Greeks. More income, it seems, gives you a health advantage with respect to your fellow citizens, but not with respect to people living in other countries….

Once a floor standard of living is attained, people tend to be healthier when three conditions hold: they are valued and respected by others; they feel ‘in control’ in their work and home lives; and they enjoy a dense network of social s. Economically unequal societies tend to do poorly in all three respects: they tend to be characterised by big status differences, by big differences in people’s sense of control and by low levels of civic participation….

Unequal societies, in other words, will remain unhealthy societies – and also unhappy societies – no matter how wealthy they become. Their advocates – those who see no reason whatever to curb ever-widening income differentials – have a lot of explaining to do.

No wonder the Economist didn’t want to open this can of worms. The idea that wealth might be bad for you is tantamount to sacrilege. But there are plenty of signs that all is not well in the land of Mammon. 40% of Americans have taken antidepressants, and some the increase in obesity to their use. The Center for Disease Control that deaths from illegal drugs has increased fourfold in the last 20 years. And the growth is greatest in the white, middle-aged cohort.

The policy implications are profound. Programs that favor open markets and free trade lead to the restructuring of industries, often producing job losses and creating winners and losers. In the US, knowledge workers have at least held their ground, while blue collar “skilled trades,” such as high paying auto industry jobs, have gone the way of the buggy whip.

The anti-globalists have a point. Open markets come at a high social cost, and the economic benefits may not offset them. That isn’t a point of view most educated people, even ones who consider themselves to be moderately liberal, are prepared to consider. But as the personal toll and social dislocation continues to rise, it is a perspective that may be forced upon us all.

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