Can We Be Happier? Evidence and Ethics, by Richard Layard, Pelican, 416 pp, £22, ISBN: 978-0241429990
The Dalai Lama was once asked what the secret to happiness was. He replied that it lay in having a “warm heart”. This anecdote, which appears early on in Richard Layard’s book, might seem out of place in a work written by an economist. But should it be? Questions about how to live, well-being, happiness and mental health have become a much greater feature of public discourse and intellectual debate over recent years and these concerns seem to coincide with three sets of processes. Secularisation has left a host of unanswered questions, from the meaning of existence to the moral conundrums of daily life. Postmodernism has reduced the systems of meaning and identities through which we make sense of the world and our relationships with one another to a series of culturally relative and ultimately arbitrary idiosyncrasies. And of course neoliberalism, most destructively of all, has assaulted the very notion of society and community, transforming other people into enemy economic combatants pitched in a pointless competition in which there can only be losers.
Economics, as a discipline, has remained largely immune to the challenges associated with these changes and has marginalised the questions they pose. Marginalising interesting and important questions is something economists excel at; at times it can appear the disciplinary identity is founded on immunising itself against them. For economists, people are essentially choice-machines and life is simply a series of scarce resources. The way we choose to deploy our scarce resources, including time, labour and money, must de facto make us happy, otherwise we wouldn’t have chosen it. Moreover, what we do, whether or not it makes us happy and whether or not it is right or wrong, is of no concern to the economist, as the individual is sovereign and there would be no scientific way to answer these questions anyway. The idea that the nature of economic relations themselves, and the experience of working, exchanging and consuming (that is economic activity), might shape well-being at the level of the individual and society is by-passed altogether, as is ethics in general.
Founding a model of the economy on what Paul Krugman, in his recent Arguing with Zombies, calls “silly notions”, is part of a wider jettisoning of consideration of many crucial social issues, such as inequality, the relationship between democracy and the economy and the social and political role of economic policy. Most worryingly, the enormous ideological and cultural influence of simplistic neo-classical economics over politics and policy debates since the 1980s has left us extraordinarily ill-equipped to deal with the crisis of neoliberalism we appear to be living through – in which inequality, free markets, globalisation and democracy are increasingly contested, most worryingly by the new authoritarian populist right.
For all these reasons, that an economist would a compose a work with the word “happy” in the title is itself noteworthy. Layard’s book is about more than economic; it is about all aspects of economic and social policy, as well as the role teachers, employers and individuals can play in creating a “happier” society. But it can be seen as part of a wider movement to move beyond the limits of conventional economics and explore new territory. Some of this has been championed by research institutes and think tanks, such as the Institute for New Economic Thinking and the New Economic Foundation, as well as by academics, especially within the fields of behavioural economics and inequality.
Layard’s point of departure is that narrow economic measures tell us very little about happiness and wellbeing. Income levels, economic output, productivity and GDP – firm favourites of economists – are very poor indicators of the important things in life:
There have been thousands of surveys in hundreds of countries and they typically find that, holding all else constant, a person with double your income will be 0.2 points happier than you are [on a scale of 10]. Similarly, a person whose income is one half of yours will be 0.2 points less happy.
Money really can’t buy happiness, or at least only 0.2 points of it. Instead, the things that really lead to greater happiness are above all, a happy childhood, experiences in education, mental and physical health and strong social connections (this is mainly for the rich countries of the world, in poorer countries income does play a more important role). Interestingly, getting good grades in school doesn’t lead to happiness in later life, but the school you attend has a very significant impact (this is one of the reasons Layard thinks teachers have such an important role to play and devotes a whole chapter to them).
In terms of average levels of happiness at a national level, there are six factors that explain the variance across countries. These are: trust (the proportion of people who think “most people can be trusted”); generosity (the proportion that give to charity); social support (the proportion who have relatives or friends they can count on to help them); freedom (to choose what we want to do with our lives); health; and income.
This framework helps explain why in the US people are no happier today than they were in the 1950s, “despite huge improvements and living standards, a least up to the 1970s”. We thus need “a new concept of deprivation”, which would not be based on income and material matters, so much as on happiness and well-being.
Layard is far from dismissive of economics, however. He believes it provides a framework for all manner of economic and social policy decisions. This framework consists of three elements:
First, there is the thing which is to be maximized – the happiness of the people. Then there are the constraints – resource, technology and human nature. And, finally, there are policy levers – regulations, spending programmes and taxes to pay for them.
However, for most economists well-being is measured in terms of purchasing power and, most importantly, in terms of overall GDP growth. Undertaking cost-benefit analysis on the basis of dollars, however, “has no ethical foundation”. Moreover, such an approach is founded on assumed theoretical a priori assumptions about the relationship between economic growth and happiness. What matters for Layard is what we know empirically about this relationship:
[Economics] ignores who gets this money [from GDP growth], since it treats a rich person’s dollar as equal to a poor person’s dollar. Happiness research show this is wrong: an extra dollar for a poor person provides ten times more extra happiness than an extra dollar in the hands of someone who is ten times richer.
Similarly, from a neoclassical perspective, overall levels of economic growth are much more important than fluctuations in employment, as argued by Chicago school economist Robert Lucas. However, empirical research into happiness shows that a country’s level of unemployment is more important for its happiness than its level of economic growth.
From the perspective of Layard’s “science of happiness”, countries are happier if they have higher levels of trust, strong social support and personal freedom. Higher levels of equality also help. In contrast, “economic growth, though desirable, is no guarantee of happiness”. Consequently, government policy, workplaces, and individuals should orient themselves around evidence-based happiness goals, and not simply economic growth. Some of the policy implications arising from Layard’s perspective, for example, include much greater spending on addressing anxiety, depression, addiction and domestic conflict.
The book can be situated as part of a wider movement, within economics and beyond, that critiques three core aspects of contemporary neoclassical approaches: (a) false assumptions about the nature of individuals as rational, self-interested and utility-maximising; (b) a narrow mathematisation of economics which has pushed ethical and political debate to the fringes of the discipline; and (c) a glorification of individualistic competition.
It can also be situated within another body of recent literature, both popular and academic, which we might describe as data-driven attempts to answer questions of ethics and meaning in the context of late capitalism. The Spirit Level, for example, starts from the point of departure that growth in average income, after a certain point, leads to little gain in terms of happiness and wellbeing. Instead, what seems to matter is how unequally that income is distributed. Using quantitative data on a whole series of variables, including educational dropout, addiction levels and mental health, authors Richard Wilkinson and Kate Pickett show that economic inequality undermines wellbeing. They explain this with reference to recent advances in behavioural psychology, which appear to show that humans, among other social animals, are biologically hardwired to feel threatened when they are lower down society’s pecking order. This is related to the brain’s “dominance behavioural system”, which is linked to social dominance and subordination. Inequality manifests, at a neurological and hormonal level, in stress, anxiety and associated issues of mental health, addiction and poor health outcomes. Societies that are less unequal, and therefore less hierarchical, have higher levels of social cohesion and trust in others and people generally feel safer, not just subjectively, but neurologically. In short, in a “winner takes all society” there are many more losers and the chance of any individual becoming one of them is greater, making everyone feel terrified of any loss in economic resources and corresponding social status. In unequal societies, all social strata experience higher levels of status anxiety.
The Spirit Level was championed by the left for showing that equal societies do better. Somewhat ironically, the underlying explanatory framework of the book is remarkably similar to that of Jordan Peterson, a veritable bête noire of the radical left. Peterson also draws on behavioural and evolutionary psychology to explain why people suffer in situations of inequality (his famous lobster example). His solution, however, is to recognise that this is inevitable and for each individual to forge their own path through the hierarchy (at which point his argument drifts off into various impenetrable tales of fighting dragons and pots of gold).
The common thread here is a data-driven attempt, drawing on empirical evidence from neuroscience and psychology, to address questions of individual and social wellbeing that relate to the structure of our society and the individual’s experience within it. This is very much the terrain within which Layard sets up his camp. The challenge he confronts is that of moving economics from being “the dismal science” to being a “science of happiness” via the path of empirical phycological data, and with a generous extra helping of mindfulness and cognitive behavioural therapy.
While The Spirit Level calls for much greater emphasis on tackling income inequality, and Jordan Peterson focuses on how individuals can existentially equip themselves for life in a hierarchy, Layard calls for an ethical revolution, a movement in which, he is keen to stress, all of us have a part to play. With this in mind, he has been one of the founders of a movement called “action for happiness”. Layard’s book is a manifesto for this movement, covering everything from “training our thoughts and feelings” (via mindfulness and CBT) to macroeconomic policy.
Layard’s desire to have an impact at a mass level is reflected in a writing style which is clear and simple and which can at times seem naive. We may react to this in different ways, but personally I savoured Layard’s commitment to something as apparently straightforward as making people feel better. Give me any day a naive social scientist who genuinely wants to improve people’s lives over one who can undertake theoretical acrobatics but whose only effect is to foment cynicism.
What is most valuable in Layard’s book is its recognition of the need to open economics up to issues of ethics and politics. It urges us to move our focus away from quantitative measures of output and productivity and towards a concern for the experience of economic activity and economic relationships. And in doing so to bring economic concerns into dialogue with other approaches and disciplines that have a lot to teach us about wellbeing, relationships and ethics.
Of course, Layard’s is far from the first book to insist on the social and political nature of economics. In academic work, this has long been recognised, within political economy and economic sociology, for example. But in popular discourse, media discussions and policy debate insights for these disciplines have not always been given much attention. Of course, the Marxist tradition has been one prominent perspective that has always seen any attempt to separate economics from politics and society as simply an expression of bourgeois ideology. Layard implies in passing, however, that Marxism has tended to “glorify struggle”, and this has been associated with all sorts of unfortunate political consequences during the twentieth century. This is an interesting point, and even as we recognise that conflict does play an important role in economic outcomes and economic change, it is worth recognising that radical alternatives to neoclassical economics have typically not themselves been particularly focused on well-being, happiness and compassion (although, of course, these things are understood to follow “after the revolution”), instead setting their sights either on materially advancing the working class or on the loftier goal of emancipation. Layard’s insistence on a mindful and compassionate economics provides, at least to this reader, a refreshingly different critique of the economic mainstream.
Aside from the Marxian tradition, there is another major strand of political economic thought that Layard sadly ignores, but which covers much of the territory this book does, and often in a more sophisticated fashion. Feminist political economy has for many decades argued that the economistic obsession with productivity, output and income levels is an expression of an andro-centric perspective that fails to recognise the importance of care, of inter-dependency, of the affective and even of love within economic activity. Feminist political economists have long critiqued homo economicus as a rational, self-interested individual, and pointed to the ways in which we are all embedded in crucial interdependent social relationships through which we sustain ourselves, our society and our economy. Feminists have also been to the fore in fostering dialogue and cross-pollination between the economic and the ethical, while at the same time recognising power relations and systematic inequalities within economic structures. Can We Be Happier? could certainly have engaged with this body of work.
Layard’s attempt to transcend the limits of economics is valuable, but some of the Achilles’ heels of the “dismal science” are reproduced within the author’s “science of happiness”. Economics has often been derided as suffering from “physics envy”, a fixation on theorising via abstract mathematical models, a positivist epistemological orientation and a denigration of the qualitative social sciences. Layard, however, could be described as suffering from neuroscience envy, given the prominence he gives to data from that science and related fields, but also a kind of vulgar positivism which he appears to believe can provide an evidence-based foundation for happiness. The book is subtitled “Evidence and Ethics”, but there is a much greater emphasis on the former.
There have no doubt been advances in neuroscience in recent decades, and there is increasingly compelling evidence on the power of mindfulness and similar practices in the treatment of anxiety and depression. Nevertheless, just as the economist’s models tend to crumble upon contact with the complex and everchanging empirical reality of economic activity, so too the fundamental conflicts and dilemmas the economy throws up again and again cannot be resolved by studying how the brain reacts to certain types of stimuli. Human beings must, perforce, inhabit social relationships through which we sustain ourselves by producing, distributing and consuming; questions of values, aims and social relations will always be at stake. The terrain of economics will be a perpetually contested one, and a retreat to positivism, especially with regard to questions as mercurial as subjective wellbeing and happiness, risks simply depoliticising economics. And this, as noted, was one of the chief weaknesses of the neo-classical approach itself.
This is not to say that insights from psychology, neuroscience and mindfulness cannot play a role in our understanding of the economy. On the contrary, there are plenty of insights in Can We Be Happier? that demonstrate what is to be gained from dialogue with these disciplines. Bringing question of mental health, wellbeing and happiness (not to mention equality) into economic debate and, perhaps most importantly, policy, seems an extremely fruitful avenue as neoliberalism progressively erodes the social fabric. But in so doing, we must take care not to repeat the tendency of mainstream economics to seek refuge from the conflicts and uncertainties of economic life in a kind of technocratic positivism and instead embrace the fact that, just as economics is fundamentally tied up with questions of how to live and how to relate to others, it is also inextricably wedded to questions of power and politics.
Dr Michael Byrne is lecturer at the School of Social Policy, Social Work and Social Justice, UCD and director of the Equality Studies MSc.