Timmy Elsewhere

At the ASI.

Maybe it\’s not the level of wealth that produces the happiness but the direction of wealth….rising wealth producing more happiness?

5 thoughts on “Timmy Elsewhere”

  1. If the Portugeezer is right, the Precautionary Principle becomes “never change the sign of the first derivative”.

  2. On the subject of wealth, I remember a quote from you which suggests the UK may become more inequal due to “globalisation”:

    “But as said globalisation is also reducing global inequality and also making hundreds of millions of the poor not poor, then on the same grounds of marginal utility we’ll just have to suck it up.

    Sorta a “tough shit but the nett effects are positive” kind of thing.”

    A very applaudable view Tim, but my guess is that you’re not one of the people who’ll suffer as a result. And this is the problem with many on the self styled “liberal left” (not necessarily you Tim, but your quote was fairly representative of that view) – they work in the public sector and are relitavely unimpacted by immigration (when was the last time you heard of Poles competing for Social Work or “Guardian Jobs”?)

  3. But wealth (or ratyer, income) does make people happy. The new economics foundation’s (nef) ‘Happy Planet Index” (HPI), which gets them easy headlines from lazy journos every year, demonstrates a very strong correlation between GDP per capita and happiness, easily calculated from their published underlying data.

    The only reason the lazy journos think it doesn’t is that the ‘nef’ manipulate the data into an ‘index’ in which happiness is divided by GDP per capita. If richer countries have lower levels of this ‘index’ that just demonstrates that happiness doesn’t increase linearly with income -which is perhaps not that surprising.

    They also assume that CO2 emissions make people unhappy (but that this is somehow not picked up in the happiness measure), by including this as an additional ‘bad’, bringing down the HPI for richer countries. Quite apart from the obvious bias this is conceptually odd, because if emissions made people unhappy, it would be really easy to reduce them, wouldn’t it?

    There is a more valid finding that over time happiness in any given country seems to be roughly constant despite economic growth. But to say this shows we should not pursue economic growth is just like saying we should not care about racial equality or – for example – police corruption, because the obvious improvements in those over the last 30 years don’t seem to have improved happiness either. There’s only so much policy advice you can derive from a flat-line graph…

  4. “But wealth (or rather, income) does make people happy”

    FlatEric – doesn’t Tim say that clearly in his piece?

    Tim – the advantage of rising income is surely that it allows the distribution of income to change without seeing anyone’s income fall?

    Tim adds: Certainly agree that that’s part of it. Same reason 1 or 2% inflation is beneficial: allows relative real wages to change without anyone’s nominal wages falling. But I do think it’s more than that as well. I’m pretty sure that being able to observe that, step by step, the world is becoming a better place makes people happy. Makes me happy: as the opposite, that’s it’s all getting worse would make me unhappy.

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