Tag Archives: Monetarise

Why economists don’t do happiness

Just last week my daughter told me that she was pregnant and it made me realise that there is a gaping hole at the centre of economics.  Economists state that anything that people value is to be considered as wealth. Yet there is an inconsistency according to this criteria  are missing from the lists of what economists classify as wealth. All those pleasures that mean so much, yet which cannot be ‘monetarised’ are ignored. Even if these many uncounted pleasures add to the well being of an individual. Going back to my daughters pregnancy all an economist can tell me is the cost of bringing a child into the world and then the cost of their upbringing, possibly to be offset by the later productivity as an adult. Only the negatives count, pleasure and happiness are missing from the economists index of wealth.

It is not that economists are unaware of the importance of happiness as part of the make up of an individuals well being, its just that they have no method of quantifying it, they cannot count units of happiness, so they just ignore it.

The government has shown some awareness of this problem and they have produced a happiness index. They conduct social surveys to measure the happiness quotient. However there is always a great deal of cynicism about the project and its claim to have identified the happiest town are generally taken with a pinch of salt. Although the governments attempt to quantify happiness and to measure the overall level of happiness can be justified, as it does need to know the state of the nations well being. Yet it is of limited value, a recent international survey claimed that Norway was the happiest of countries. A survey dismissed by one Norwegian who said how can the introverted and anxious Norwegians be happier that the extroverted Greeks.

Although not a professional economist, George Osborne (former chancellor of the exchequer) he does belong in the category of ‘miserablilist’ economists, he made one of the most infamous statements about how human frivolity impacted badly on the economy. When a national holiday was given to celebrate the marriage of Prince William and Catherine Middleton, he bemoaned the lost productivity due to the people having an extra day’s holiday. He as a typical Gradgrind economist, could even give a spurious figure in billions for the estimated cost of lost output. Economists don’t do happiness or pleasure as it does contribute to a measurable increase in the nations wealth.  If it can’t measured it does not count. Economists have contributed a ‘miserablist’ mentality to the national consciousness.

Although I know of no studies of weddings by economists, they are one of those pleasurable occasions that consume large quantities of wealth and that appear to make little meaningful contribution to the nation’s wealth. Therefore they meet with their disapproval. Earlier this year my daughter got married and we spent a substantial sum of money on the occasion.  Economists would describe this as a  potlatch* like ceremony, a ceremonial practice in which the families give away substantial amounts of their wealth. This mood of disapproval infects the media, there are constant censorious articles about the nation’s excessive spending  on weddings. While I don’t intend to defend the spending of the rich, as when one rich young woman spent £12 million on her wedding, what I do want to defend is the spending of the average family on a wedding.

When I looked up the practice of potlatch on Wikipedia,  it reminded me that the practice was intended to strengthen social bonds within the tribal group. Exactly the same is true of contemporary weddings, they add glue to the social cohesion of society. My family is as so many in contemporary Britain an extended family. Social and economic change has dispersed the family across the country. Only at weddings and funerals do the family come together. Weddings being the more effective glue as they are a happy occasion and people are more willing to come together for such occasions. What such family get togethers do is to counter fissiparous tendencies of the free market. A largely unregulated free market such as that which is destructive of all social bonds. This destructiveness also has a cost but one that is never counted.

If I can give an example of this. Teaching was once a family friendly occupation, parental leave was generous compared to other occupations and the maternity leave was assured. However now the free market has been introduced to the education system, maternity leave is no longer celebrated. Losing an experienced teacher to either maternity or paternity leave is seen as taking a valuable asset out of the classroom. The management in schools are now uniformly hostile in their attitude to new parents. Now there is the obligatory out of school hours working that negatively impacts on childcare. Teachers are expected to put in several out of hours work both in school and out of it. When family life is put under such stress it makes breakdown of the family more likely. When 1  in 3 of new marriages end in divorce, the harsh economic and social system in the UK must be a large factor contributing to this.

Durkheim identified this sense of social isolation, which he called anomie, as significant factor that contributed to the individual committing the act of  suicide. Some doubt has been thrown on his research; but there is evidence that the loss of community is a factor in the development of mental and physical ill health in individuals. There is even some research that suggests that those who live alone are more likely to develop dementia. The cost of family and community break up is never costed. Michael Polanyi stated that the free market is a threat to social order. He wrote that the state should intervene to mitigate the worst effects of the free market. He believed that Britain only avoided revolution in the late eighteenth century, because all those thousands of hand loom weavers made unemployed by the factory system could get money from the parish with which to support themselves and their families. In France of the same period it was the unemployed and hungry poor who provided the muscle to overthrow the royalist system of government. They were the sans culottes who cheered the execution of the king.

While the free market in Britain has not created the misery equivalent to that, which the economic upheaval in the eighteenth century caused, it has wrecked damage on the social fabric. Why I as an economist celebrate the ‘excessive’ spending on weddings, is that it is the push back by families and individuals against the destructiveness of the free market system. Governments have  been complicit in this laying waste, removing employment protection laws and enabling the most unfriendly of family employment practices to become widespread. The government is now being forced to recognise the high cost of the free market unfriendly policies of business. Only recently it introduced a policy guaranteeing thirty hours of free child care at a nursery.  An inadequate and under funded child care programme, but least it’s a belated recognition of the problem. However it still remains hostile to those organisations and groups that resist the worst abuses of the free market.

In such a society when the government does little to prevent the divisive forces of the free market wreaking havoc on the social system, it is essential that there is some countervailing force that resists this most destructive of forces. The family is one such unit and the other is the local community. People need some security that comes from the feeling of belonging, something which a market of freely competing individuals does not offer. Although even the government is careless of the health of the family, doing little to offset the damage done to this social institution by the free market. Unlike the free marketeers of business and government, people see the family unit as being essential to their well being and will constant remake the family unit in whatever mutation. The family survives as an extended family, as family members are able to exploit new technology such as the smart phone to strengthen family links.

Economists fail to recognise that the free market can only prosper in an ordered society. A society of all against all is one that is going to fail. In a society whose raison d’etre is competitiveness and insecurity, it is left to the family to provide that sense of security and personal well being that is so essential of personal well being. This is why I value the wedding, as it celebrates the most essential of social units the family. For this economist long may families go on spending large sums on weddings as is a celebration of social togetherness, and as such it is the one remaining bulwark against the destructive individualism of the free market. Economists’ only  have the tools to celebrate production, they have no means of celebrating human happiness or togetherness. Simply put economists don’t do happiness and given their influence on politicians and policies their input into the political process can be very damaging.

*Potlatch a practice of giving away the families wealth, which could involve the destruction of such wealth. It was a custom practised by the Indians of Northwest USA and Canada. It was a practice designed to strengthen social bonds and to maintain social equality. No one individual was able to accumulate wealth and become the rich and powerful individual who would dominate tribal society.