09 January 2007

Shiny happy people (by decree)

Why can bigwigs not stick to their supposed area of expertise? In particular, why can't senior, highly paid economists stay out of politics and propaganda?

A whole flotilla of economists are now veering into territory that has nothing to do with economics, but without prefacing their books/articles/etc by saying "I am going to sound off on a topic which, while it may appear to be economics, really has nothing to do with the subject for which I received my Professorship/knighthood/barony".

I am talking about the new "science of happiness".

If I, or Joe Bloggs, wrote a book suggesting that the government's priorities ought to include the promotion of "happiness" as an objective measurable variable, it would be ignored. But when a highly respected economist writes it, this kind of nonsense is taken seriously.

The worst recent case is Richard Layard ("Lord Layard of Highgate") writing about Happiness: Lessons from a New Science. Well, it's not science, it's ideology. You can make the obvious point that GDP doesn't measure everything which people value, but beyond that it isn't really economics but politics. Especially if it is turned, as it is, into arguments about what the state ought to do to make things better.

One important thing GDP doesn't measure, of course, is degree of personal liberty. You can judge how ideologically slanted the work of Layard — and others of his ilk — is by the fact that they barely mention liberty, if at all.

The following extracts from Layard's book will give you a clue as to what it's really all about. I'm surprised this line hasn't yet been trotted out to attack City bonuses. I suppose it's still too cutting-edge.

A person who earns more may gain, but other people lose, because their relative income falls.
The point here is that it's supposed to be relative wealth/poverty which makes people happy. Keeping up with the Joneses and all that. (Someone recently got the Nobel Prize for working that out, don't you know.) So if Smith gets richer, Jones — whose wealth stays the same — gets less happy. This turns, hey presto, into a justification for government intervention. (Here is one plank of the the alleged academic 'proof' that envy is justified, which I mentioned in my post last week on Peter Wilby.)

The person who earns more does not care that he is polluting other people in this way, so we must provide him with an automatic incentive to do so. Taxation provides exactly this incentive.
In other words, to make everyone happier, we must increase taxes. Now isn't that just wonderful, children? (Layard's point here is that, by confiscating part of Smith's extra wealth, we increase Jones's happiness. So taxation is actually intrinsically desirable as a social instrument, even if the proceeds are frittered away on pointless state expenditure. Do keep up.)

Note the tendentious use of the word 'pollute', based on the theory that an increase in an individual's income can (given the aforementioned claim that happiness is a function of relative wealth) be regarded as an externality. That's right, those City boys are polluters — one more excuse for hating them, this time in the name of the environment.

A healthy note of scepticism about this whole new trendy "happiness-is-a-science" nonsense is injected by Yasmin Alibhai-Brown (of whom I'm not usually a fan) in Monday's Independent. She notes that

we now have a heap of devoted civil servants working to increase the nation's quotient of happiness. The Whitehall Well-being Working Group (W3G) is seeking innovative ways to make citizens of these isles feel less grumpy and more cheerful.

A report written for this jovial W3G by Paul Dolan, professor of economics at Imperial College, who aims to quantify a reliable unit of joy, has come up with a list of what makes us light up. Long marriages and lots of sex, apparently; walks, gardening, and gossiping over your fence with a friendly neighbour. Oh, and divorce and grey rain make us sad.
Well, it's lucky we have highly trained and eminent economics professors to tell us these useful things. And now that these esoteric facts have been professionally ascertained, we shall no doubt soon be on the receiving end of some wonderful new legislation and/or tax-funded government initiatives, to ensure that we really do increase our happiness levels, as is good for us — whether we want to or not.

Picture of Michael Stipe (top) courtesy Warner Bros.


Anonymous said...

That last picture is communist propaganda right?

Fabian Tassano said...

Yes, extract of poster from present-day Vietnam. Picture taken by Henry Malmgren of TheGlobalGuy.com.

Paul said...

I remember reading somewhere in my Ladybird Book of Economics the difference between "positive" and "normative"...

"Polluting other people"?! I hardly know where to start: one could fill another book with refutations of those two excerpts. By the way, I'm not sure that the second even attempts to prove that envy is justified: it seems to be taken as axiomatic. (But I've not read the book, so there may be some such "proof" elsewhere in it --- can't wait to hear it, if so.) Anyway, correct me if I'm wrong, but from what I can see his view goes something like this...

Suppose a chap, Tom, say, decides to work longer hours, or take on greater responsibility or risk, and as a result receives greater financial reward than his neighbour Dick, who does not: then --- according to Lord Layard --- if Dick resents Tom's success he has actually suffered a significant slight (significant enough for intervention by the state), and Tom's penalty for causing Dick to feel envious should be to see his reward diminished. (And presumably, Dick can expect a cut from the amount stripped from Tom.) Tom's increased effort, burden and/or worry all count for naught as their primary result is pollution for Dick and his fellow coveters. And a piece of ambitious scum like Tom "does not care that he is polluting other people", so the state "must provide him with an automatic incentive to do so". Ergo, tax the bastard!

In this view, envy is not a corrosive vice, but is instead something to be pandered to, and indeed acted upon. And any venture which brings financial success is in fact a failure and must be penalised! What does he think will result? The man's psychological illiteracy beggars belief. And I love that ending: "Taxation provides exactly this incentive". I can think of many things for which taxation provides an incentive, but caring about "polluting other people" with feelings of envy wouldn't be one of them. In fact, a net increase in national resentment levels would be the likely result when the fruits of one's diligence, ingenuity or nerve are impounded by the state and divvied up amongst those who begrudge them. Envious people will always find something to envy, no matter what their situation: Lord Layard's dim-witted recipe for happiness will simply swell the ranks of the aggrieved.

Finally, I'd always thought that Churchill rather over-egged the pudding with some of his quotes about socialism: "It is a socialist idea that making profits is a vice", "Socialism is a philosophy of failure, the creed of ignorance and the gospel of envy." Looks like the old curmudgeon knew his enemy.

Anonymous said...

It's just so typically left-wing to want to intervene in every aspect of your life.

They want to define happiness in a certain way and then control that as well.

Ian said...

Fabian said: A whole flotilla of economists are now veering into territory that has nothing to do with economics, but without prefacing their books/articles/etc by saying "I am going to sound off on a topic which, while it may appear to be economics, really has nothing to do with the subject for which I received my Professorship / knighthood / barony".

Fabian, you have also said:I don't myself think it's realistic to say to people, "you're Professor X / Prince Charles / whatever, you shouldn't be expressing your views on things outside your expertise, unless you preface it with some disqualifier or other".

Am I missing something?

Fabian Tassano said...

Ian, glad to see someone reads my stuff carefully enough to spot possible inconsistencies. The difference as I see it between the two types of case is as follows.

1) Frank Ellis is a linguist, Prince Charles is a member of the Royal Family. I don’t think anyone thinks that Ellis talking about race, or Charles talking about architecture, has anything to do with their respective areas of expertise. They probably get taken more seriously than they would without their social status, but that doesn’t bother me, and I don't think it should bother other people.

2) Richard Layard is an economist, and he markets his ideas about happiness and state intervention as being economics. If he wrote a book on gardening, or electrical engineering, that wouldn’t bother me. Also if he expresses his views about politics, that wouldn’t bother me. What does bother me is his political views being dressed up as economics - i.e. his area of expertise. Anyone who is not an economist is liable to think, this is Prof Layard using his economic expertise to provide insight into happiness and social policy. When really it’s Prof Layard using his economic expertise to lend spurious technical weight to a new way of expressing an old political position.

Ian said...

Fabian, thank you for clarifying the distinction, and sorry to be so late with my response.

I still think the issue around Ellis was that he wasn't making it clear enough that his area of specialisation was Russian literature. You've probably guessed by now that I'm on the fringes of Russian academia, but even I had never heard of him before a chance encounter. But let that pass.

What is much more interesting for me, and you seemed to imply this also in your question to me about Anderson and constructions of nationality, is the apparent suggestion that theories should be free from the theorist's own political views. With the possible exception (and I stress it's only possible) of fields like theoretical physics, surely every theory is both based in and potentially has impact on politics in the wider sense. It follows from that premise that theories cannot possibly be free from their originator's views, even if it is in the sense of the theorist striving for objectivity in the awareness of his or her own biases.

I get the sense from your blogging, and I'm sorry for the broad brush strokes, that you are among other things a firm believer in free markets and minimal state intervention. I know there are strong and widely accepted theoretical arguments to supprt this, but nonetheless, it ultimately becomes a political stance.

I don't wish to say that this is a bad thing in itself (even if I have different views myself about market mechanisms, for example), just that we should be clear that theories can always be used to support political positions we do not like as well as those we do, and criticism of a given theory on that ground alone is perhaps misplaced. What's sauce for the goose is sauce for the gander.

Fabian Tassano said...

Ian, thanks for your comment.

I’m not sure how you extract from what I said here or elsewhere that “theories should be free from the theorist's own political views”. My point on this post was that, when experts in one field want to express views about another field, they should be upfront about it and not try to dress it up as their own area of expertise. Layard is trying to argue for a particular political approach, but using economic techniques and concepts to lend his political preferences a spurious technical weight.

As it happens though, you’re right that I’m sceptical about the fashionable idea that all statements are theory-laden, and the particular version of this which says that all culture is ideology-laden. I think this theory is an exaggerated and distorted version of a true idea first propounded by Kant, and is itself highly ideology-driven.

Re my favouring free markets and minimal state intervention, I've never suggested that the primary arguments for these are economic. The reason my support for them is mentioned very prominently at the top of the blog is to make it clear to readers where I’m coming from, politically speaking.

You can argue rationally for the benefits of markets or liberty till the cows come home, but for most people the choice between liberty and statism seems to come down to an emotional preference.