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Earlier this year, the Royal Economics Society Young Economist of the Year competition had an essay title, on “should governments aim for growth or happiness”?. The LSE Public Debate yesterday would have been perfect for tackling this essay title - the debate was between Professor Lord Layard and Professor Lord Skidelsky.

Layard has contributed a lot to the discussion on happiness, with the topic having grown from an esoteric discussion point to an ever-increasingly important part of public policy decision-making.

From Sarkozy’s happiness index, the Stiglitz Commission, to Cameron and General Well-being... the UN General Assembly last July passed a motion to give higher priority to prioritising happiness.

Whilst real GDP per capita has doubled since 1974, happiness has not changed. And above a certain threshold, further increases in r.GDP/c do not equate with increase in happiness. (See Easterlin Paradox). So the deduction is that governments should not aim for higher GDP but aim to max GNH – a la Bhutan. (Although the latter focussed on this by introducing TVs into every household which damaged their aim somewhat).

The main discussion points are listed below, but if I were to try to summarise the main debate it would be that Layard feels that we need to aim to maximise happiness but Skidelsky retorts that it cannot be measured and it is a bland term that is too superficial. People try to maximise their well-being already and so we don’t need to go via some banal concept of happiness. For Layard, governments should focus on promoting the culture of benevolence to ensure the aims of individual happiness and group happiness coincide. Skidelsky feels that people’s moral sense of good is enough, without using some subjective term such as happiness.

Layard’s introduction had the following key points;
- Governments should promote more happiness.
- Thomas Jefferson stated that the sole legitimate aim of government is to promote happiness.
- 2 fundamental propositions: 1) for a society, the best situation is where there is the most happiness and (especially) the least misery 2) For an individual the right way to live is to create the most happiness and (especially) the least misery.

In this sense, an individual’s aims and society’s aim is the same - whereby the individual’s aim is a moral philosophy objective whilst society’s is a political philosophy objective.
- As Layard points out, this is not a new idea – it has been around for centuries – but for the past 60 years, we have prioritised wealth, but have seen no increase in happiness over the years - so we need a better set of objectives.

- what is happiness?: For Layard, he feels we all know what happiness is and it is more objective than people give it credit for. Whilst the causes of happiness vary, we mustn’t confuse causes of it with what it is - it is a generally well-known feeling - of feeling good, of wanting to feel different from unhappy.

- its the totality of happiness that matters, across a lifetime, not just momentary transitory moments of peak and troughs

- why does happiness matter? : because it is intrinsically good. We value feeling good, whether it is by our freedoms, liberties, wealth, comfort etc

- does pursuing happiness encourage selfishness?: No. Everyone’s happiness counts equally, as per the propositions made above – since we should be trying to maximise the number of people happy with the fewest in misery, with government’s role being to try to maximise society’s happiness.

- Is this too utopian an idea? No. It is not a case of the egoistical vs the benevelonce side of human. The neuro-economics literature points out that there is a reward to virtue itself - the part of the brain that is stimulated when doing good, is similar to that when eating chocolate.

- can we change? we should make it a function of culture - to try to aim for benevolence over egoistical. The problem is the current culture has the wrong focus - we need a new culture which focuses on social caring.

- Should happiness be a by-product and not a focus? J.S Mill said that if we think about whether we are happy or not, we stop becoming happy. Layard is not advocating navel gazing but it is absurd not to think about happiness.

- We care about the distribution of happiness too - whilst we want the average level of happiness to be high, we want a low variance too.

- Role of government: the role for the government is not to create a police state or a bureaucratic one. But there is a role of govt for creating the conditions for happiness – as T Jefferson said.

- Is happiness measurable?: yes it is - surveys show that answers can be well correlated with observable factors such as unemployments, divorce; and other objective measures
such as electric measurement of brain activity. Hence

Skidelsky, a clear critic of the economics of happiness had the following points to make:

- Happiness is a state of feeling good, a state of mind
- Why should feeling good be the ultimate aim?
- On surveys of a 10 pt scale, what does 7/10 mean on a scale? How can we assign cardinal values to a state of mind. What do the extremes 0 and 10 stand for - Skidelsky used the rather colourful examples - is 0 being boiled alive and 10 some blissful nirvana (God having an orgasm in your brain?). And what does halfway pt of 5 mean? - content?
- It cannot be measured for Skidelsky, so it cannot be directly targeted (unlike GDP). Although we can measure variables that correlate with happiness - such as unemployment and divorce. But we don’t need survey evidence of this - we know what good is - we have a moral sense of good - rather than a subjective sense of the mind. So we don’t need to go via happiness to get to this “good”.
- different idea of Henry Sidegwick (philosopher) who said that a person’s ultimate good was the surplus of pleasure over pain. Bentham wanted to max happiness. But Aristotle had happiness as the end but not a subjective idea - he believed in Eudaimonia - doing well in life, some concept of human flourishing. Which for Skidelsky is a much better concept than Happiness.

The problem is that happiness is a pallid and boring goal. We all want to achieve certain things that end up giving us happiness, but we don’t look at happiness and aim for it per se.

For Skidelsky, happy is not the same as goodness and Layard conflates the two. Benthamites would say we want good things, with our preferences taken as a given. But evidence shows that our preferences for private consumption do not make us happier - the flaw of GDP being it only takes into account market activities excluding things like friendships etc. Why do we not just say that increasing leisure is good in and of itself, why do we need to go via ‘happiness’?

Layard says being selfish is not inconsistent with happiness. But Skidelsky argues that the greatest happiness for a group cannot be self evident for the individual. For example, if something would cause individual misery but would help max group happiness, the individual would not do it. Bentham required a coincidence of individual v group happiness ends - that is rational egoism and rational interest to be the same. But what if working for the group makes you feel bad? You need some sense of duty/virtue – which is more in tune with Aristotle’s Eudaimonia. A group of sadists’ happiness cannot outweigh the negative happiness of the tortured person – so we need extra constraints on the aims of happiness before we can progress on this point.

And also what happens if there is an experience whereby a value of 0 and 10 on a ‘happiness scale’ is experienced simultaneously? e.g Love – ‘better to have loved and lost?’? Is this better or worse than a moderate steady contentment throughout life - or should we aim for happiness-smoothing ( a la Modigliani-Brumberg life-cycle income model – should we prefer a stable path of happiness, and avoid the peaks and troughs that life’s experiences would throw at us?).

Happiness cannot be the good life itself. For example if a friend dies, sadness is the “correct” feeling one should feel – if happiness is our aim, we can get it via drugs but where sadness is due, its better to be sad; rather than max happiness. In this sense the nature of the goal of happiness is impoverished. As per Huxley’s Brave New World - we don’t want engineeers of growth replaced by engineers of bliss?

The debate between Layard and Skidelsky revolved around the following discussion:

Layard - Where does duty come from? Some Rawlsian concept of an impartial spectator, who doesn’t know the parties involved? How does one enlist them to carry out their duty? We need to build a culture, that supports the benevolent side of people over egoism. One can give reasons for individuals to focus on group happiness, but then need a lever, a personal reward for this to happen - done via culture.

Skidelsky: all society’s have a moral sense - whether its secular or religious philosophers. But whilst individual’s may satisfy absolute wants, relative wants are almost insatiable. His book “how much is enough” talks more about this.

- We don’t need surveys to tell us about the good life. A good life is a clear idea. Good life has different aspects - if values conflict it does not mean we are reduced to relativisim - values are not limitless - our moral sense will guide us to prioritise values - many are not discrete but depend on each other.

- Happiness discipline tries to resolve conflict of values with a “master value” but it doesn’t exist – since we cannot define it or measure it.

- The theory of self interest supposedly unlocked the wealth of nations, but Adam Smith had a way of getting around the selfish nature of people - he said the faculty of sympathy/conscience - a la a Rawlsian impartial spectator - would limit self interest.

- It is not a case of whether we are egosist or sympathetic - they are not separate but we are part of others.

- But for Betham - they coincide but which comes first?


Happiness can only be understood if we understand sadness:
Skidelsky: we cannot separate the two in a substantive way - such as love.
Layard - cites psychologists who point out that in a moment you can only be one of the other.
Skidelsky – What happens if an individual gets happiness in self destruction? For example martyrs?

In Syria, why is there an uprising against tyrannical regime?
Layard: Is it fighting for society – in which case the happiness of the group and the happiness of the individual coincide.
Skidelsy: The uprising is to create a better soc, not a happier society.

Q: How do we address the issue of people who self report as being happy - domestic violence cases for example?
Layard – the role of adaptations (to bad external situations) is very important. But you cannot adapt to all things.
(P.S I am not convinced Layard answered this (very good) question).

Skidelsky - Happiness should not be supreme ultimate goal. And not everything that people desire is desirable.

Q: Happiness is a boring, bland, superficial word. Self-fulfillmnent is better! ‘Making most of oneself’.
Skidelsky - self-fulfillment is closer to Aristotle’s Eudaimonia – it’s only economists who focus stress
over ‘happiness’.

Q: why is it GDH or GDP - zero sum game? Why just one?
Layard - Cameron says GDP is a means to an end not an end of itself.  We have too many ends currently so go for happiness as the main one.
Skidelsky – ‘well-being’ is more than happiness - Happiness is a subjective state of mind. He is more happy (tee hee hee) with a General Well Being index a la Cameron.

Overall an interesting debate that would extend pupils from the more positive economic theory to delve into aspects of philosophy and economics. My personal view was Skidelsky ‘won’ the debate but then he was arguing a more easier stance than Layard.

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