The Autodidacts

Exploring the universe from the inside out

Fortunately Erroneous: Bad science and the economics of happiness

Psychology has measured many things, most of them unpleasant. But in the past few decades some psychologists have started to measure pleasant things — such as happiness — and this new academic trend is wobbling the foundations of a half-century worth of economic dogma.

Let’s begin with my favourite quote from J.S. Mill, the rather prescient home-schooled Englishman. In 1848 he wrote:

“In contemplating any progressive movement … the mind is not satisfied with merely tracing the laws of the movement; it cannot but ask the further question, to what goal? Towards what ultimate point is society tending by its industrial progress? When the progress ceases, in what condition are we to expect that it will leave mankind?”

For free marketeers, the answer to Mill’s question was an easy one: increasing production leads to increasing consumption, which leads to increasing production, which allows increasing consumption, and so on, indefinitely and wonderfully. Whatever people want is probably what makes them happier, and people always want more things, don’t they?

As long as psychologists were content to confine their research to insanity and other low-lying areas of the mental landscape, there was no empirical counterpoint to the assumption that what people will pay for makes them happy. Since individuals make up society, what is good individually should also be good collectively, the limitless desire for material satisfaction should power the whole economic merry-go-round into a happy-ever-after land of endlessly growing production and endlessly growing consumption. This was the view of economists like Milton Friedman, and in some form the rationale for the entire trajectory of industrial society. In a word, it has been the Western idea of progress.

It is true that the human appetite for stuff seems insatiable. Things, especially expensive, flashy, big, and difficult to get things, are in perpetual demand among our odd species. There's a logic to this, but it’s rather crude. All you have to do is consider the reasons a teenage North American male, for example, might frankly give for desiring that most obvious of status symbols, a flashy car, to see why the study of status symbols tends to fall under a new and controversial academic discipline known as “evolutionary psychology.” A less obscure version of this could be studied first hand in many natural and unnatural settings, such as the chicken coop in my back yard, but that’s not the main point. Status is economically important because it helps explain how, with the help of a generous advertising budget, something that was once considered a deadly sin could be elevated to the position of an organizing principle for a whole economic system, and central to both the means and the ends of that system’s idea of progress.

Most fortunately, though, this notion of progress misses the mark in at least two ways. First, the most obvious and ecological way: it’s elementary that if you keep using up some finite thing — a planet, let's say — at an ever increasing rate, eventually it will run out, and then whatever you're using it for — civilization, let’s say — will no longer be able to function. This is the obvious way in which Freidman’s logic fails. But there's another, more subtle, more immediate, and much more encouraging error: having more stuff actually doesn’t make people happier. Once this inconvenient fact emerges from its academic incubator into the public awareness – and the number of best-selling books on the subject would indicate that this is beginning to happen – the logic of material excess becomes a sham from one end to the other.

Of course the idea that having more stuff doesn’t make people happier is not at all new. It might have been considered common sense at one time. But common sense, like other aspects of the commons, such as clean air and water, was an early casualty of the industrial revolution. Common sense could also have prevented ecological disaster too, but notions of scientific and technological progress, which began parting company from common sense somewhere around when the apple made contact with Isaac Newton’s ample coiffure, overruled such ideas as sentimental. On the subject of the environment science began to re-converge with common sense around about 1970. Thanks largely to a few pioneers of “positive psychology,” the science of human behaviour seems to be heading for a similar convergence. Evidence from studies on “subjective well being” shows that what really makes people happy is not wealth, beyond a certain very basic level, nor is it power, or Rolls Royces, or Rolex watches. Instead, it is things like healthy relations with other humans, contact with nature, altruism, and meaningful employment – all things that are endangered by a consumption-driven society. Plato seems to have a more accurate notion of happiness than Milton Friedman or Thomas Hobbes.

Status is a zero-sum game. If no one had a car, then having a car of any kind would put one ahead. But when everyone's got a car, you have to have a different or expensive car for it to matter. Never mind that today’s junker is much more effective at doing what automobiles are designed to do than an early-model status symbol from the turn of the century. This narrow view of human motivation suited the competition-oriented mindset of 20th century business just fine. But just as the exploitative imperial regimes of the 18th century focused on the aggressive, survival-of-the-fittest aspect of evolutionary theory and ignored the equally valid cooperative and altruistic aspects, industrial society has focused on the competitive aspects of human nature, ignoring the cooperative, altruistic, and contemplative aspects. As it turns out, those aspects that have been ignored by economists are as important to what the economists claim to be producing — human well being — than the aspects they prefer to focus on.

If the economists were right, the human species could charge en masse over the cliff of its own extinction, along with an avalanche of unnecessary stuff, at the very apogee of satisfaction and well-being. Fortunately, they can’t. Human nature doesn't allow such a thing, and the more obvious it becomes that industrial progress alone is incapable of achieving its stated purposes in even the most ideal of cases, the more likely it is that the situation will succumb, in some measure, to that most old-fashioned virtue, and another of Plato's favourite subjects: wisdom.