The Dismal Science
People multiply,
food does not.
The good news is
there are wars
and plagues.
— David M. Bader[1]
It was
Thomas Carlyle that characterized economics as “a dismal science.” Ever
since that famous statement was made in 1849, economics has been busy
proving Carlyle wrong.
The
latest manifestation of this quest is to direct economic inquiry towards
the current fascination with happiness. It’s not enough to address and
resolve the three great policy challenges of economics: Inflation,
unemployment, and growth. People should be happy as well. Indeed,
economics has a long track record of being focused on happiness. The
early economists assumed that rational people would maximize
satisfaction. This might have worked out fine if people actually were
rational, but as Kahneman and Tversky pointed out in their pioneering
research[2],
a number of assumptions that economists made about how people behave
were simply wrong. Economists were wrong on people making decisions
only from their own selfish perspectives (people are affected by other
people), by their change in wealth (even if it is only on paper), by the
perceived urgency of an event, and by status.
It may
not be enough that you are doing well, if others are doing equally well
(“Not only must I win; you must lose.”). That makes the pursuit of
happiness rather tricky, if it is at the expense of the happiness of
others.
This
might be the reason why happiness rankings worldwide are poorly
correlated with economic success. The University of Michigan’s World
Values Survey has collected data on the happiness of countries for over
twenty years. Here is the latest ranking[3],
compared with 2006 data for per capita income (purchasing power
parity, adjusted, in US dollars)[4]:
|
Happiness Ranking |
Country |
Per Capita Income |
|
Happiness Ranking |
Country |
Per Capita Income |
|
1 |
Puerto Rico |
$16,700 |
|
41 |
South Africa |
$12,200 |
|
2 |
Mexico |
$10,000 |
|
42 |
Croatia |
$12,400 |
|
3 |
Denmark |
$34,800 |
|
43 |
Greece |
$22,300 |
|
4 |
Columbia |
$7,900 |
|
44 |
Peru |
$6,000 |
|
5 |
Ireland |
$41,100 |
|
45 |
China |
$6,800 |
|
6 |
Iceland |
$25,700 |
|
46 |
Morocco |
$4,100 |
|
7 |
Northern Ireland |
$24,381 |
|
47 |
South Korea |
$22,600 |
|
8 |
Switzerland |
$32,200 |
|
48 |
Iran |
$8,400 |
|
9 |
Netherlands |
$30,300 |
|
49 |
Poland |
$13,100 |
|
10 |
Canada |
$33,900 |
|
50 |
Turkey |
$8,400 |
|
11 |
Austria |
$32,600 |
|
51 |
Bosnia |
$5,200 |
|
12 |
El Salvador |
$4,700 |
|
52 |
Uganda |
$1,800 |
|
13 |
Venezuela |
$6,400 |
|
53 |
Algeria |
$7,200 |
|
14 |
Luxembourg |
$65,900 |
|
54 |
Bangladesh |
$2,100 |
|
15 |
U.S. |
$41,600 |
|
55 |
Egypt |
$3,900 |
|
16 |
Australia |
$31,600 |
|
56 |
Krygystan |
$2,000 |
|
17 |
New Zealand |
$25,300 |
|
57 |
Hungary |
$16,300 |
|
18 |
Sweden |
$29,800 |
|
58 |
Slovakia |
$16,300 |
|
19 |
Nigeria |
$1,400 |
|
59 |
Jordan |
$4,700 |
|
20 |
Norway |
$42,800 |
|
60 |
Estonia |
$17,500 |
|
21 |
Belgium |
$31,100 |
|
61 |
Serbia |
$4,400 |
|
22 |
Finland |
$31,000 |
|
62 |
Tanzania |
$700 |
|
23 |
Singapore |
$28,600 |
|
63 |
Azerbaijan |
$5,400 |
|
24 |
West Germany |
$30,100 |
|
64 |
Montenegro |
$3,800 |
|
25 |
France |
$29,600 |
|
65 |
India |
$3,400 |
|
26 |
Argentina |
$13,700 |
|
66 |
Lithuania |
$14,100 |
|
27 |
Vietnam |
$2,800 |
|
67 |
Macedonia |
$7,800 |
|
28 |
Chile |
$11,900 |
|
68 |
Pakistan |
$2,400 |
|
29 |
Indonesia |
$3,600 |
|
69 |
Latvia |
$13,700 |
|
30 |
Phillipines |
$4,700 |
|
70 |
Albania |
$5,300 |
|
31 |
Taiwan |
$27,500 |
|
71 |
Bulgaria |
$9,600 |
|
32 |
Brazil |
$8,300 |
|
72 |
Belarus |
$7,100 |
|
33 |
Spain |
$25,600 |
|
73 |
Georgia |
$3,400 |
|
34 |
Israel |
$25,000 |
|
74 |
Romania |
$8,100 |
|
35 |
Italy |
$28,700 |
|
75 |
Moldova |
$1,900 |
|
36 |
Portugal |
$19,000 |
|
76 |
Russia |
$1,100 |
|
37 |
East Germany |
$30,100 |
|
77 |
Armenia |
$4,800 |
|
38 |
Slovenia |
$21,500 |
|
78 |
Ukraine |
$7,000 |
|
39 |
Japan |
$31,600 |
|
79 |
Zimbabwe |
$2,100 |
|
40 |
Czech Republic |
$20,000 |
|
|
|
|
The
first thing that is truly striking is that some countries receive far
more happiness from every dollar of income than do other countries.
Using this measure, some of the most “happiness-productive” countries in
the world are Columbia, Nigeria, Vietnam, Indonesia, and the
Philippines. Countries that receive much less happiness per dollar are
Japan, Germany, France, Finland and Belgium.
|
|
Otherwise, happiness seems to favor geography in some way: Latinos,
Northern Europeans, Canadians and Americans, and Australians/New
Zealanders, all seem to have a bit of a happiness advantage. Countries
belonging to the old Soviet Union seem to have a lot of catching up to
do when it comes to happiness and income.
It is
puzzling that Mexico, the second happiest country in the world, keeps
sending so many people north of the border, where they are unlikely,
perhaps, to achieve the happiness they left behind. Maybe that is why
they return in such large numbers for visits, and to stay.
Researchers have found that people tend to have a “set-point” of
happiness that rarely deviates over time from its normal value. That is
probably why the things we acquire and accumulate lose their attraction
after a while; we end up taking them for granted. Holidays like
Thanksgiving serve the purpose of reminding us how grateful we should be
for our lives on the earth — and gratefulness is incompatible with being
unhappy.
Our own
research has shown that satisfaction is felt more deeply if it meets a
strongly felt need rather than a want. Carl N. Platou
just called to ask me a question about something we did together in
1976. Carl, now 83 years of age, is one of the happiest people I’ve
ever known. He exemplifies the way satisfaction is tied to true human
needs. Here are the sources of satisfaction revealed by research
conducted by our staff over a thirty-year period; we use them here to
frame Carl’s satisfaction as an example:
1.
Acceptance:
He is widely accepted by colleagues for his work in health care.
2.
Intimacy:
He knows his field intimately, and he has built a multi-hospital system
of renown.
3.
Sensory
Stimulation:
You’ll find him on his boat; or walking the beach in Florida; or
enjoying good music, good books and good food.
4.
Growth
and Development:
He attends conferences, he reads papers, and he discusses issues of the
day.
5.
Achievement and Recognition:
He is Knighted by the King of Norway, and has received a great number of
the awards he could receive from his own profession.
6.
Outward
Orientation and Caring:
You’ll find him at a steel desk in the corridor of the University of
Minnesota Medical School, right outside Dean Powell’s office, working
the phones. Earlier this month, he raised $5 million for the medical
school.
Research
also shows that the only way to beat the human life span of 85 years is
to be happy with one’s life and work, and have the means to live it in
the way one wants.
The
trick, then, is not to get what you want, but to want what you get. The
dismal science may be useful to us after all: Satisfaction, or
happiness, may not be solely about money or status. Satisfaction is,
after all, a feeling. What were the moments of our lives when we felt
the greatest amount of satisfaction? Chances are, it was when we were
conscious of, or engaged in, something that fell into the six categories
listed above.
Like
now, when I’m finishing this little article. Or if I learn that someone
has actually read it . . .
[1]
Bader, D. Haiku U. Gotham Books. New York. 2005.
Commenting on Thomas Malthus’ An Essay on the Principles of
Population.
[2] Kahneman, D. and A. Tversky. Prospect
Theory: An Analysis of Decision Under Risk. Econometrica.
47(2). 263-91.
[3] EUROPEAN AND WORLD VALUES SURVEYS
FOUR-WAVE INTEGRATED DATA FILE, 1981-2004, v.20060423, 2006. The
European Values Study Foundation and World Values Survey
Association. Aggregate File Producers: ASEP/JDS, Madrid,
Spain/Tilburg University, Tilburg, the Netherlands. Aggregate
File Distributors: ASEP/JDS and ZA, Cologne, Germany. Online.
Available:
http://www.worldvaluessurvey.org. Note that survey
does not include all nations of the world.
|