Ross Gittins is the Economics Editor of The Sydney Morning Herald and an economic columnist for The Age and The West Australian. He is a winner of the Citibank Pan Asia award for excellence in financial journalism and has been a Nuffield Press fellow at Wolfson College, Cambridge, and a journalist-in-residence at the Department of Economics at the University of Melbourne. Ross is frequently called upon to comment on the economic issues of the day and has written and contributed to many books and periodicals. His most recent book was Gittinomics (Allen + Unwin, 2007).

The Happy Economist

Happiness for the Hard-Headed

By Ross Gittins

Allen & Unwin

Copyright © 2010 Ross Gittins
All rights reserved.
ISBN: 978-1-74175-673-9

Contents

Introduction: Happiness and economics,
Part One Micro happiness,
1. What is happiness?,
2. Evolution and happiness,
3. Who is happy?,
4. Money and happiness,
5. Work and happiness,
6. How to be happy,
Part Two Macro happiness,
7. What’s wrong with economics,
8. The economy and the environment,
9. Towards the happy society,
Bibliography,

CHAPTER 1

WHAT IS HAPPINESS?

Man meeting an economist he knows in the street: How’s your wife? Economist: Relative to what? — Joke told by Professor Allan Fels

When I went to Sunday school in the 1950s, happiness was part of the curriculum. One of the choruses we used to sing (and spell) was:

I’m H-A-P-P-Y,
I’m H-A-P-P-Y,
I know I am, I’m sure I am,
I’m H-A-P-P-Y.

And another:

If you’re happy and you know it, clap your hands.
If you’re happy and you know it, clap your hands.
If you’re happy and you know it,
And you really want to show it,
If you’re happy and you know it, clap your hands.

Well, from where I’m sitting, a childhood in the 1950s was happy — especially in retrospect. Since then, however, the interest in happiness has become a lot more adult, a lot more commercialised and a lot more scientific. Dozens of popular books with the word ‘happiness’ in their titles have been published in the past decade. I’ve read a lot of them and will quote from the most authoritative. Why such a glut? Perhaps because the satisfaction of so many of our material ambitions in recent decades has, paradoxically, left us vaguely unsatisfied, or unhappy if you like. Is that all there is? Or perhaps it’s that, as our material needs edge closer to satiation — a point I doubt we’ll ever reach — our aspirations turn to higher order, more psychological needs.

I remember noticing that the Australian public’s measured concern about environmental issues reached a peak in the economic boom of the late 1980s. With employment and wages growing strongly, we had room to worry about pollution and recycling. But as the boom turned to bust in the early 1990s, concerns about the availability of jobs and the malfunctioning of the economy seemed to crowd out concerns about the environment. I formed the view then that, like so many other things, the public’s degree of interest in the environment varied with the state of the business cycle. It was, in a sense, a luxury good. With the present conjuncture of another economic downturn and with the urgent need for concrete action to prevent climate change, that theory is about to be tested.

Similarly, it will be interesting to see whether the surge of public interest in happiness is merely a by-product of the world’s long economic boom of the past decade or two and, if so, whether it survives the present severe global recession. I hope it does — because, as with the environment, I regard the pursuit of happiness as a matter of great intrinsic significance rather than a luxury — but I’m not sure it will.

The science of happiness

There is, however, another factor contributing to the wave of interest in happiness that points in the direction of the phenomenon being more permanent. It’s that happiness — or ‘subjective wellbeing’, to give it its more academically respectable moniker — has become an object of considerable serious research by many social scientists, mainly psychologists, but also neuroscientists, economists and a few political scientists.

Many of the books on happiness — and, certainly, the most reliable — are written by these academic experts; most of the rest draw heavily on their findings. So when next you see the phrase, ‘the science of happiness’, don’t be dubious. The doyen of these researchers, and the man who pioneered the field almost single-handedly, is Ed Diener, professor of psychology at the University of Illinois, Urbana-Champaign.

Building on the happiness research, and conferring on it greater academic respectability, is the relatively new ‘positive psychology’ movement, established at the instigation of Martin Seligman of the University of Pennsylvania, while he was president of the 160,000-member American Psychological Association. Martin observed that for the past half-century clinical psychology had been consumed by a single subject, mental illness, and argued that it needed as well to return to its earlier interest in nurturing talent and improving normal life. It should seek knowledge of what makes life worth living. As well as helping troubled people to raise their wellbeing from, say, minus eight to minus two, it should also help raise other people’s wellbeing from plus five to plus eight. So positive psychology is ‘the study of the conditions and processes that contribute to the flourishing or optimal functioning of people’. Sounds like a good idea to me.

Happiness has not been a major research interest for economists but, even so, small numbers of economists are contributing to the new science. It was an economic historian, Richard Easterlin, who first pointed to the paradox of the developed countries’ ever-rising national incomes but little-changed happiness ratings. It’s probably Professor Bruno Frey of the University of Zurich who’s done most to draw to academic economists’ attention the relevance of happiness studies to their traditional concerns.

Is the pursuit of happiness unworthy?

Even so, my religious upbringing makes me wonder about the proposition that the pursuit of happiness should be the chief object of our lives, let alone the goal of governments. Is happiness all there is to life? It seems so narrow in its vision, not to mention so smug, so ‘I’m all right, Jack’, so self-centred, so blind to the travails of others.

We say we want our children to be happy, and we certainly don’t want them to be unhappy, but is that the full extent of our hopes for them? Say we could give them a drug or maybe hook them up to a machine that would keep them in a permanent state of pleasure and contentment. Would we do it? Very few of us would. Why not? Because it would be cheating; it wouldn’t be playing the human game as it’s intended to be played. It wouldn’t be running the risks, or experiencing the joys, that come from our interactions with other people. It would involve no challenge — no learning from experience, no triumphing over adversity — and thus no feelings of satisfaction from achievement. It would be a life lived without striving, without accomplishment, without any contribution to making the world a better place.

In Aldous Huxley’s novel Brave New World, everyone exists in ignorant bliss thanks to the drug Soma. The Controller explains that, ‘universal happiness has been achieved by shifting the emphasis away from truth and beauty and towards comfort … Art and science have become impossible because they require challenge, skill and frustration. Happiness has got to be paid for somehow and a guarantee of comfort requires losing other experiences that are part of being human,’ the Controller says.

But one person objects: ‘I don’t want comfort, I want God. I want poetry, I want real danger, I want freedom, I want goodness, I want sin.’

‘In fact,’ says the Controller, ‘you’re claiming the right to be unhappy.’

There has to be a place in our lives for sadness. It would be inhuman not to feel sad over the death of a loved one, the breakup of a relationship or the loss of your job. We don’t want to stigmatise sadness, put a social prohibition on it, treat it as a disease or label it pathological. And never forget, sadness or frustration make us appreciate happiness when it comes.

So, is that what the present obsession with happiness amounts to — an unthinking, self-centred desire to feel good at all times? To some people it may. But it doesn’t have to be and, certainly, to me happiness means a lot more than that. The word ‘happiness’ has a range of meanings. In its narrowest conception — the one focused on by those people with doubts about the legitimacy of happiness as a personal or public policy goal — happiness involves the constant seeking of pleasure and avoidance of pain. The better word for it is hedonism.

Levels of happiness

But to the scientists who study happiness, it comes in at least two parts. Raj Persaud, a consultant psychiatrist, says psychologists dissect happiness into two components, referred to as level 1 and level 2. Level 1 happiness is the kind of hedonistic pleasure you get from a nice glass of wine, seeing a nice film, having a nice meal. It’s a pleasurable feeling state that tends to be rather intense, but also tends to be temporary. Psychologists’ attempts to measure how long it lasts suggest about 15 minutes.

Level 2 happiness, on the other hand, is more cognitive or intellectual. It’s the satisfaction and contentment you feel when you look at your life and think about past achievements and the general direction your life is heading in. This form of happiness is less intense than level 1 happiness, he says, but is longer lasting. Note that the two levels are frequently in conflict with each other. If you pursue too much level 1 happiness you won’t get to achieve much level 2 happiness. But if you dedicate your life purely to level 2 happiness you won’t have much fun.

Most scientists take ‘happiness’ to cover both senses and use the word interchangeably with ‘subjective wellbeing’ or just ‘well-being’. Sonja Lyubomirsky, professor of psychology at the University of California, Riverside and author of The How of Happiness, says: ‘I use the term happiness to refer to the experience of joy, contentment or positive wellbeing, combined with a sense that one’s life is good, meaningful and worthwhile.’ I suspect, however, that in practice what scientists measure when they question people about their happiness is closer to level 2. Bob Cummins, professor of psychology at Deakin University and supervisor of Australia’s primary measure of happiness, the Australian Unity Wellbeing Index, says the happiness he focuses on ‘is a mood, rather than an emotion … Whereas emotions are fleeting, moods are more stable’, he says. ‘They represent a deep feeling state which is constantly present even if we lose contact with it sometimes.’

Although all of us have done our share of seeking pleasure and avoiding pain, it’s a mistake to imagine the world would be a better place if we could stamp out all negative emotions. Psychologists explain that humans have evolved to feel negative emotions for good reason. Ed Diener and his academic son Robert Biswas-Diener have written the most authoritative popular guide to the discoveries of happiness science, Happiness: Unlocking the Mysteries of Psychological Wealth. ‘Don’t be concerned if you experience sporadic anger, sadness or worry,’ the Dieners say. ‘Happiness is not the total absence of negative emotions. Brief feelings of sadness and guilt, while unpleasant to experience, can serve important purposes and help us function effectively.’

Our feelings help us interpret the quality of our lives and the world around us, and motivate us to behave accordingly. Fear, for instance, functions to keep us safe by motivating us to avoid perceived dangers. Guilt functions to guide our behaviour through moral decision-making, and thus helps preserve harmony in families and communities. ‘Imagine how dysfunctional the world would be if people did not grieve for their deceased loved ones, feel pangs of guilt when they cheated on tests, or become angry when they were treated unjustly,’ they say.

When we look at happiness as discussed by Aristotle and the ancient philosophers we leave hedonism — the mere satisfying of appetites, a life suitable to the beasts — far behind and rise to the heights of ‘eudaimonia’, living the good life in both senses of the word: good in that it’s virtuous, aimed at making the world a better place, and good in that it’s deeply satisfying. Aristotle’s question was: How should we live? He saw it as the fundamental question of human existence, involving the formulation of an ethical doctrine about what constitutes a well-lived life.

Whereas hedonic enjoyment focuses on a specific outcome — the intense but brief feelings of pleasure for pleasure’s sake — eudaimonia focuses on the content of your life and the processes involved in living well. Living well means pursuing the right ends, with satisfaction or happiness following as a mere byproduct. Whereas hedonism emphasises quantity — maximising pleasant feelings — eudaimonia emphasises quality. It’s about making your life meaningful, both in terms of your relationships with others and in terms of the work you do. It’s also about growth — growth towards the best that is within us. Here, of course, we see plenty of scope for striving and ambition, as long as our ambition drives us towards worthy ends. The eudaimonic life is often described as ‘thriving’ or ‘flourishing’ — fulfilling your potential.

One man who’s had a great influence on my thinking is Michael Schluter, founder of Britain’s Relationships Foundation and patron of the Relationships Forum Australia. While almost no one would doubt that our relationships with our spouse, children, parents, siblings, other relatives, neighbours and workmates are the most important dimension of our lives, Michael’s simple but profound point is that, in practice, we’re always neglecting to take account of those relationships in our pursuit of other goals. His mission is to remind individuals and governments to consider the ‘relational’ implications of everything they do.

In Thriving Lives, the Relationships Foundation’s response to the British public’s recent preoccupation with happiness, Michael and his colleagues argue that: ‘At a personal level, promoting the maxim that pleasure is good and pain is bad runs the risk of encouraging individualism, selfishness and an unhealthy focus on present experience that can be damaging over the long-term. It can too easily be used to justify risky sexual behaviours, men walking out on their families or the refusal to care for disabled or elderly relatives. It may also encourage the avoidance of any good form of pain in the way of challenge or difficult experience that is necessary for personal development and maturity.’

So they argue that both the hedonic and eudaimonic dimensions must be involved in any definition and promotion of wellbeing. ‘The hedonic feelings of happiness are certainly an important part of life. But without the eudaimonic dimension, the pursuit of hedonic happiness can quickly become irresponsible and, ironically, may ultimately undermine the happiness of self and others.

‘By complementing pleasure with the concept of flourishing, we’ve taken a step closer to gaining a better understanding of wellbeing and the goals for life. But there is one further step that needs to be taken. We do not exist as isolated individuals … our experience of wellbeing is deeply influenced by our connections with other people, both directly and indirectly. And when we look at wellbeing at a social level, we begin to see how much our collective wellbeing depends on choices that are not made for personal gain.’

This, they say, is most evident in direct relationships. It’s certainly in the individual’s long-term interest to invest in relationships, even though there may be a short-term cost. But long-term gains to yourself that are distant, uncertain and indeterminate are a poor motivation for investment in present behaviour compared to a willingness to commit to others and invest in their wellbeing. What’s more, it’s unlikely there will even be any long-term wellbeing gains from a relationship if the motivation for investment is purely one of self-interest. It’s only by a genuine motivation to give without seeking personal gain that relationships flourish, they say.

Taking all that on board brings me to Martin Seligman’s division of happiness into three ascending elements, in his book Authentic Happiness. First is the ‘pleasant life’ — a life of enjoyment that successfully pursues positive emotions. Second is the ‘good life’ — a life of engagement, in which you obtain abundant gratification in the main realms of your life. Third is the ‘meaningful life’ — a life of affiliation, where you use your strengths in the service of something much larger than you are, whether it be nature, social groups, organisations, movements, traditions or belief systems.

(Continues…)Excerpted from The Happy Economist by Ross Gittins. Copyright © 2010 Ross Gittins. Excerpted by permission of Allen & Unwin.
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