Happiness and Economic Growth
My piece on happiness and economic growth in this month’s non-American Prospect has escaped from behind the paywall and is now available for your cost-free reading pleasure. I have to say I’m pretty psyched that my kitten-strapped-to-a-guillotine-connected-to-a-bicycle analogy came through intact:
The fact that average self-reported happiness has not risen with average incomes does not imply that there is no point in becoming richer. A steady rate of growth may be necessary to keep happiness and other good things at a high stable level. (Imagine a guillotine, on which a kitten is strapped, connected to a bicycle that must be pedalled ever more quickly to keep the blade aloft. Slow down, and the kitten gets it.) In The Moral Consequences of Economic Growth, Harvard economist Benjamin Friedman argues that steady economic growth “fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy”—a list I doubt any politician would come out against.
I assure you that it all makes sense in context.
October 3rd, 2006 12:59
Will, that metaphor is certainly… uh… vivid…
October 3rd, 2006 16:28
Will –
Interesting article in the Prospect…it meshes nicely with your pieces on inequality, in which you struggle mightily to reduce the importance of income on our well being.
So which is it? Is income a profoundly important life dimension which carries with it “a whoppingly large positive impact on average happiness over time” or is it just another dimension on which people may compete in the quest for happiness (I seem to remember something about prize-winning pies in your previous pieces). If you have a moment, let me know how it is that inequality is so utterly unproblematic when income is so important (in terms of happiness, at least) to the people who happen to have it.
Are the lower rungs of the socio-economic ladder happier just for being members of a rapidly growing economy, even if they fail to share the spoils? I look forward to your response…
DED
October 3rd, 2006 23:22
David, I can’t speak for Will, of course, but I don’t think the connection you’re asserting is there. Economic growth makes the rich richer, and therefore happier. It makes the poor richer, and therefore happier. It makes the gap bigger, but no one cares—at least, most people care more about the growth than about the inequality.
October 4th, 2006 04:04
Jadagul, I think there’s pretty good evidence suggesting quite the opposite – namely, that once an acceptable level of wealth has been reached, the benefits of more are largely attributable to relative, rather than absolute effects. If this is the case, economic growth certainly makes the very poorest happier, because absolute differences in income matter a great deal at this level. It also – to some extent – makes the richest happier. What it doesn’t do (or, at best, does inefficiently to the point of being negligible) is make everyone happier. In other words, most people - i.e. the majority, who have enough to live comfortably, are not ‘rich’, and make their status comparisons upwards - care quite a lot more about inequality than they do about absolute income.
I commend to you an excellent review paper by Clark, Frijters and Shields that seems to nail down these relationships pretty conclusively in my view – it’s not in print yet, but you can probably get it from Andrew Clark directly.
Will, I like your analogy, although I’ve always had a soft spot for kittens so it did make me wince a bit. But to capture the whole picture, why not expand it a little further? Something like “Imagine a guillotine, on which a kitten is strapped, connected to a bicycle that must be pedalled ever more quickly to keep the blade aloft. Slow down, and the kitten gets it. Keep cycling ever faster, however, and the resulting noxious emissions from the gasping cyclist and his creaking bicycle will poison the kitten anyway.”
October 4th, 2006 09:22
Sam, Because the faster you pedal, the cleaner the bike gets!
October 5th, 2006 03:43
Unfortunately, I suspect that the poor kitten will be wheezing its last long before the bike get shiny. But that’s an argument for another day. And perhaps a more pliable analogy…
On another matter, I’d be interested to hear your thoughts on the current Cato Unbound discussion (for a lefty Brit, I’ve been developing a curious, and probably unhealthy, interest in US Libertarian thinking just recently). Are you planning to post about it, or does you role as editor prohibit that?
October 5th, 2006 08:31
On-going (general) economic growth seems such a wonderful thing in the context of the “hedonic treadmill”. Strange that mentions of the latter are so rarely matched with mentions of the former.
October 9th, 2006 09:42
The kitty guillotine is a stroke of genius.