Something for Jeff Sachs to consider

\”Money matters and especially for the poor. But once you reach a certain level of wellbeing, the additional gains are very small and perhaps not there at all. The US has tripled its per capital GDP over the last 50 years but there has not even been a twitch of the needle in raising wellbeing.

I put this forward as an idea you understand, not as something that has been proven.

That it is not the level of GDP which produces the happiness, but the growth in GDP itself that does.

I think we\’d all be OK with the idea that a falling GDP doesn\’t produce happiness? Possibly even that a stagnating one doesn\’t? Which leaves us with, if there is to be a relationship between the two at all, the idea that it is an increasing GDP which produces happiness.

That accords pretty well with what we know about humans anyway. Things getting marginally better month by month, our being able to see that our children will have it better than we do, this is the sort of thing that we do think will produce general happiness, no?

But if this is true this does leave rather a hole in the GDP doesn\’t produce happiness argument. For they are all measuring level and what needs to be measured is change.

Further, we\’ve just had a nice natural experiment that we can exploit. Most of the western world has seen a reduction in the level of GDP in recent years. Has anyone bothered to go out and check how those happiness surveys are doing?

6 thoughts on “Something for Jeff Sachs to consider”

  1. Furthermore, it may well be that increasing GDP is one of many prerequisites for national happiness, though it may not be sufficient in itself to increase happiness.

  2. To refer to a recent experiment in the link between GDP and happiness, Greece is still richer than most of the countries on the planet, yet their citizens are intriguingly unsatisfied.

  3. Ah, the Easterlin Paradox once more. Not really a paradox since Richard Easterlin wrote in his original 1974 paper that people’s aspirations rise in line with their new and improved living standards. If that is a reason to abandon economic growth then it is also a reason to abandon public spending – which has risen dramatically in 50 years without having any apparent effect on happiness. It is also a reason not to care about inequality, which has fallen and risen in the same period while happiness has remained flat – a fact that is consistently ignored by self-described egalitarians.

    Based on self-reported happiness data, nothing in macro-economics makes us happy or sad. If anything should be abandoned, it is the field of ‘happiness economics’.

  4. The Pedant-General

    “Has anyone bothered to go out and check how those happiness surveys are doing?”

    No, because then they would have to get Oliver James back in to try and defend his “Affluenza” theory and that would never do.

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