Thu Jan 19th, 2006 at 04:14:16 AM EST
Andrew Oswald writing in FT.com:
Economists’ faith in the value of growth is diminishing. That is a good thing and will slowly make its way into the minds of tomorrow’s politicians. Led by the distinguished psychologist Edward Diener of the University of Illinois, a practical intellectual manifesto signed by many of the world’s researchers, entitled Guidelines for National Indicators of Subjective Well-Being and Ill-Being, has just begun to circulate on the internet. That document calls for national measures of separate facets of well-being and ill-being, including moods and emotions, perceived mental and physical health, satisfaction with particular activities and domains, and the subjective experience of time allocation and pressure.
First, surveys show that the indus trialised nations have not become happier over time. Random samples of UK citizens today report the same degree of psychological well-being and satisfaction with their lives as did their (poorer) parents and grandparents. In the US, happiness has fallen over time. White American females are markedly less happy than were their mothers. Second, using more formal measures of mental health, rates of depression in countries such as the UK have increased. Third, measured levels of stress at work have gone up. Fourth, suicide statistics paint a picture that is often consistent with such patterns. In the US, even though real income levels have risen six fold, the per-capita suicide rate is the same as in the year 1900. In the UK, more encouragingly, the suicide rate has fallen in the last century, although among young men it is far greater than decades ago. Fifth, global warming means that growth has long-term consequences few could have imagined in their undergraduate tutorials.
None of these points is immune from counter-argument. But most commentators who argue against such evidence appear to do so out of intellectual habit or an unshakeable faith in conventional thinking.
Some of the world’s most innovative academics have come up with strong evidence about why growth does not work. One reason is that humans are creatures of comparison. Research last year showed that happiness levels depend inversely on the earnings levels of a person’s neighbours. Prosperity next door makes you dissatisfied. It is relative income that matters: when everyone in a society gets wealthier, average well-being stays the same.
A further reason is habituation. Experiences wear off. A joint intellectual effort by psychologists and economists has got to the bottom of the way human beings adapt to good and bad events. Some researchers believe that after a pay rise people get used to greater income and eventually return to their original happy or unhappy state. Such hedonic flexibility also works downwards. Those who become disabled recover 80 per cent of their happiness by three years after an accident. Yet economics textbooks still ignore adaptation.
A final reason is that human beings are bad at forecasting what will make them happy. In laboratory settings, people systematically choose the wrong things for themselves.
We've known a lot of this since 1899, but since we couldn't measure it we put it aside for a century.