Why the poor lead in economics of happiness and well-being

Why the poor lead in economics of happiness and well-being

Why the poor lead in economics of happiness and well-being

Written by M. J. Gitau


Business Daily Africa

Thomas Carlyle, a 19th century budding preacher who turned to history after losing his faith, once described economics as follows: “a dreary, desolate, and indeed quite abject and distressing one; what we might call, by way of eminence, the dismal science.”

Carlyle perhaps gave economics this gloomy assessment because of the concerns that the discipline had accorded itself at the time of its evolution as a separate discipline from law, philosophy and politics.

By having such mundane issues as trade, prices and measurement of output as its chief concerns, the discipline-and its latter-day add-ons like finance-has gone through a radical transformation in the last century to become a versatile, posh and even sexy subject.

However most critics-especially fellow colleagues in sociology and political science-still observe that one major handicap of economics is its inherently inability to measure overall well-being, over and above the numbers churned out yearly about gross domestic product (GDP).

Growth, critics point out, isn”t the same as development. We can give some credit to the discipline though; most indices of well-being today have tried to incorporate other non-economic, non-quantifiable aspects of well-being such as literacy, voice and measures of governance like press freedom.

Still, the gospel of demand, supply and equilibrium prices provided few tools for its followers to measure overall happiness, and its only until recently that such disciplines as psychology have came to the aid of the “dismal science” in a bid to measure overall happiness in countries.

The economics of happiness, it must be asserted, is a more fulfilling endeavour. Despite increasing growth, booming stock markets and falling prices, at the end of the day, the principal concern of human beings is simple: to lead long, healthy and happy lives.

The concept of Gross National Happiness (GNH) was first employed in 1972 in Bhutan kingdom, a small forested country in the Himalayan region of only 2.2 million people, mostly peasant farmers.

Jigme Singye Wangchuck, the king at the time, noted that in his view, GNH was a far much superior concept and premised it on four key pillars: economic self-reliance, a pristine environment, the preservation and promotion of kingdom’s culture, and good governance in the form of a democracy.

Today, there is a whole host of happiness indices and the economics of happiness has become such an attractive field of study, firmly embedded in disciplines concerned with human progress and welfare.

What then, makes happiness a greater goal to measure than the standard per capita income or GDP growth?

The first host of reasons is simply the more intrinsic needs in people and the realisation the increasing output and wealth falls far short of the main ingredients of what need to lead much more fulfilling and satisfactory lives.

Small wonder why suicides are high in rich nations, especially among wealth corporate, most of whom have failed marriages! As the Beatles once sung, money “can”t buy me love”. The Holy book even warns that money can be the source of evil.

The second host of reason is now where the economics of happiness meets with mainstream economics in such concepts as scarcity.

Simply put, even if a country experiences double digit growth, people will simply never have enough money, meaning there must be a lot more we are after than just money.

As Lord Peter Bauer, a respected development theorist once wrote, money is an outcome of development, not its precondition.

The third bag of reasons has to do with country experiences. While peasant farmers and wannabe middle classes in the Third World may be struggling in squalor, misery under corrupt governments with inept bureaucracies, they rank pretty highly on happiness indices, far much more than seemingly jolly citizens in the First World.

The point that GDP misses is to confuse technical progress with satisfaction. Granted, rich nations have better healthcare, roads and iPods. But they suffer from a wide array of terminal diseases, terror occasioned by risks of failure and uncertain futures.

As The Economist put it in a survey of wealth and happiness this week, social scientists at the University of Pennsylvania have found that “mansion-dwelling American millionaires are barely happier than Maasai warriors in huts.”

While it may be true that money grants some form of happiness, the lesson for policy is that perhaps neither extremes is necessary for decent living: extreme wealth carries with it lots of stressful obligations and worry; extreme poverty erodes dignity, or as Adam Smith once put it, the ability to appear in public without shame!

By lifting people above a certain degrading threshold of level of income and preventing (somehow) the gross accumulation of wealth at whatever cost, then we can have materially well-off citizens who possess a certain measure of happiness.