January 31, 2016

HARDIN | Calculating Happiness

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Since 2012, the United Nations has commissioned three publications of The World Happiness Report, a comprehensive annual report published by Columbia University’s Earth Institute, directed by economist Jeffrey Sachs. With the advent of internationally comparable data measuring subjective well-being and happiness, the reports propose an approach to public policy that focuses not only on increasing individual wealth, but also on improving other factors that contribute to life satisfaction, such as political freedom, social networks and a lack of corruption. People report the highest levels of happiness in Northern European countries like Denmark and Finland, while the countries with the lowest levels of happiness are all in Sub-Saharan Africa. These reports fall under the domain of happiness economics, a growing field of study that takes a theoretical as well as a quantitative approach to measure happiness, quality of life and well-being by combining economic concepts with related fields such as psychology and sociology.

In the neoliberal era, roughly characterized as a period of relaxed economic regulations in the wake of the 1980s and onward, humans have become actors in the market economy and every action is commoditized. Neoliberalism is best understood as the invisible apparatus by which every action is economized as part of the world market, including activities that don’t necessarily generate material wealth, like learning, romantic interactions or happiness. As we become more accustomed to assigning value to all aspects of everyday life, human beings transform into human capital, charged with the burden of constantly adding to their present and future value.

The Industrial Revolution led to an unprecedented improvement in the standard of living, and for the past 250 years or so we’ve typically accepted that economic growth creates the happiness that accompanies an improved quality of life. This is partly true: increased income contributes to an individual’s well-being, at least until a certain point. In general, people in developed countries are healthier, live longer and have higher incomes than peope from at any point in human history. However, the neoliberal understanding of happiness and well-being as  linear functions of economic growth fails to account for the complexities of unprecedented growth in a globalized setting. In recent decades, many countries have blindly pursued GDP growth at the expense of social and environmental factors. As a tool to compare the quality of life across countries, GDP has never really been an accurate gauge of a country’s economic well-being. Because of widening wealth and income gaps in most countries, an increase in GDP rarely coincides with an increase in the standard of living for the average citizen. More importantly, increased GDP can’t tell us whether or not economic growth is sustainable.

Inseparable from the day to day operations of the market economy, this understanding of well-being that is so dependent on continuous economic growth can only evaluate an individual’s well-being in economic terms. Thanks to the globalized market economy, individuals in developing countries have more access than ever to the high-quality goods and services that have typically been consumed by only members of wealthier nations. In absolute terms, these people are better off. But humans tend to measure life satisfaction on a relative scale: over 40 years ago, American economist Richard Easterlin found that humans compare themselves to small groups of their own peers rather than to some global standard. This is the paradox of understanding changes in individual levels of happiness in a globalized market economy: the world becomes smaller with every advance in technology and communication, yet our individual points of reference remain largely unchanged. Even as economies and supply chains have become increasingly interdependent, humans have not adapted the same international focus when evaluating their own levels of life satisfaction.

It’s tempting to look at increased consumption levels of individuals in developing countries and conclude that people are better off, but life satisfaction is relative in scale. Just because people in developing countries now have microwaves and color televisions does not necessarily mean their standard of living has improved. On a larger scale, the fact that the richest nation in the world (the United States) fears the possibility that the economies of other nations (e.g. China) might soon catch up to our levels of consumption and production reveals the striking inconsistency between reality and the idealized notion that sustained growth will somehow drive us to a point when every human benefits from a decent quality of life. Happiness is relative, and as people continue to compare their own well-being to that of people in their immediate vicinity or social circle, it becomes easier to lose sight of the growing wealth inequality on a global scale.

It should go without saying that happiness isn’t a commodity and shouldn’t be treated as such. Because we evaluate our life satisfaction by observing others in close proximity, happiness begins with community and social trust  — concepts so necessary for the human experience that they are impossible to assign value. Although happiness is perhaps too complicated a concept to use as a proxy for general well-being, the very existence of the World Happiness Reports and other measures of happiness are a cause for optimism as we move away from the belief that wealth and life satisfaction necessarily move in lockstep. Any attempt to look beyond income as the only contributing factor to well-being is progress in the right direction. However, the objective to quantify happiness must not be confused with attempts to commodify a general form of well-being; we can calculate happiness without trying to reframe it as something with market value that can be bought and sold.

Emily Hardin is a senior in the College of Arts and Sciences. She can be reached at enh33@cornell.edu. Free Lunch appears alternate Mondays this semester.