Interesting economic thought

Earlier this year, the Resolution Foundation reported an increasing divide between the rich and poor in Britain. To reflect upon emotional wellbeing in the round we should note the work of Professor Angus Deaton, awarded the Nobel prize for economics in 2015. In a co-authored paper in 2010, he noted that emotional wellbeing increases along with rising income, but only up to an annual income of $75,000 (£58,000). While austerity and poverty increase levels of distress for many, the escalating wealth in some areas of society would appear to make the recipients no happier. Surely this in itself makes a sufficient case to redress the balance to a certain degree?

That £58 k putting you in the top 5% (by individual earnings, or thereabouts). And of course we do already do a lot to redress the balance. Going by household incomes, top 20% average (note, mean average) is £80 k or so and 12 times the bottom 20%.

After taxes, benefits, the consumption value of government services like the NHS and education, the consumption gap is 4 to 1.

That’s redressing the balance to a certain degree isn’t it?

There’s also another way to read Deaton’s result. If emotional wellbeing is to be out goal then we should not tax anyone on less than £58 k, should we? As they’re still short of that maximum. Meaning that we’ll be able to afford only as much government as we can squeeze out of the top 5%. Fine by me of course.

15 thoughts on “Interesting economic thought”

  1. The article is entitled: “Let’s skewer the myth that money can buy happiness”. Does anyone subscribe to that myth?

    In any case, with regard to my emotional wellbeing, the best thing that government can do is fuck off out of it.

  2. Can we also, please, have a bit of redressing the balance of the economic contributions made? You know, not having a welfare state that might almost be designed to increase the number of dole bludgers.

  3. Are you saying that Deaton or Resolution Foundation or the Guardian have committed Worstall’s fallacy?

  4. Escalating wealth in some areas of society doesn’t necessarily make you happier…

    At some stage during the 1980s my annual salary reached £26k, which at that time was pretty good and certainly made me happy. It paid the mortgage, the bills, provided for an annual holiday in the sun and a couple of meals out each week. When it was later increased to £50k the principal difference to my lifestyle was the ability to drink £15/bot wine instead of £5/bot and to stay in 5* hotels rather then 4* – otherwise things proceeded pretty much the same. Ditto when my remuneration passed £100k (£70/bot claret). That said I’m a relatively low-maintenance sort (have worked with lads who owned more than one Ferrari and it was never enough). Crucially I never produced kids, so there were no school fees, universities, deposits for homes, etc. Have a mate in his mid-seventies who is still working in order to pay his ‘grandchildren’s’ school fees. Over the years he has paid in more than enough to redress the balance, though I can’t vouch for his emotional wellbeing.

  5. The same old schtick that poorer people aren’t happy, that they are “struggling.”

    If emotional wellbeing is to be our goal then we can save a trillion fvcking dollars by having free marijuana. Gamecock’s prescription for whirled peas.

  6. “Crucially I never produced kids”: ah well then, though we must no doubt treat your views with respect, you have to accept that many cruel souls will consider you not entirely grown up.

  7. Not entirely grown up…

    My parent’s generation consisted of twenty three children split between the two families (10/13). As happens, two-thirds produced offspring, while the remaining bunch chose to remain brat-free. Those that produced kids were a great family orientated bunch. However the couples that were child free – even to a kid like myself – appeared couples apart. Joined at the hip. I envied their relationship and grew up to be a similarly selfish man, was never prepared to share my wife.

  8. Bernie seems to be a decent sort.
    But as a general observation, why are the childless so fvcking smug?
    In principal you cannot be childless and against mass immigration at the same time.
    The dilemma is even worse for gays, because many of the immigrants really do want to throw them off high rise buildings.

  9. The first kid I sat next to at school in ’56 was named Paramajit. We regularly entertained my father’s workmates to lunch – single Caribbean men in their Sunday best whose families remained in the home country until they were able to bring them across. Over the years I served with and worked with comrades from just about every neck of the woods. Damn it, I even married a Scot! My biggest regret is the poor buggers who were left behind and have to compete with the flood of competition. My objection to immigration is only a matter of degree, and I remain happy to pay for more than my fair share everyone’s children’s education.

  10. It’s perfectly rational to be both childless (like me) and against mass immigration (like me) if you have friends/siblings/whatever with four or more kids.

  11. Quite frankly that research sounds utter bollocks. If it was true why would people bust a gut to earn more?

    If I was rich enough to leave my mansion and trophy wife every morning to drive to the office In my Lamborghini Gallardo i’d be driving with a massive emotional hard-on. You don’t get that for £58k

    Who did they ask?

  12. Always remember that there are three things you cannot buy with dollars: happiness, the respect of your colleagues and the love of a good woman (of course, that’s only true if we’re talking about Zimbabwean dollars …)

  13. I can confirm that earning more than £58k makes me happier. In fact, cut my income to that and my family will have to have an emergency budget with some major lifestyle changes.

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