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.