Title page book Happiness

Happiness --- Introduction in a new field

Publication: The penguin press (2005, New York/Londen)

First insertion on Heterodox Gazette Sam de Wolff: 29 september 2014

E.A. Bakkum is a blogger for the Sociaal Consultatiekantoor. He loves to reflect on the labour movement.

During the past decades the interest in happiness economics, also called behavioural economics, has grown significantly1. This research has obtained an extra stimulus thanks to the Nobel price for economics, which in 2002 was awarded to Daniel Kahneman for his psychological studies. It turns out that the modern knowledge of psychology and sociology has drastic consequences for the economic science. Richard Layard studies human happiness already since 1980, but it is the collaboration with Kahneman, which motivated him to finally write the book Happiness. In this way Layard attempts to make this new economic field accessible for a wider public. This attempt is fairly successful, considering among others that a Dutch translation appeared, under the title Waarom zijn we niet gelukkig?.

The result is impressive. The tone is popular, and the text is easily readable and supported by funny cartoons and simple pictures. In contents Layard summarizes almost exclusively the findings of others, and does not add anything new. But in this manner Layard does succeed in presenting an enormous amount of knowledge, for those who are truly interested. His list of literature references even consists of an impressive 25 pages. He also clarifies the connections between the various themes, which are addressed in happiness economics. He does not stop at the boundaries of the various fields. Although Happiness is in essence a textbook about economics, it also contains chapters about brain research, about Buddhism, and about psychic medicines. This all turns Happiness into a standard work, which must be read first by anybody with interest in the theme.

Layard believes that people are searching for a new meaning of life. He proposes to find the social meaning in a shared happiness. In this respect he is a follower of the philosopher Jeremy Bentham, who is a founder of utilitarianism2. Happiness is evidently an emotion. However, it can be measured objectively by registering the brain activity and by filling in questionnaires. People can indicate fairly precisely, say on a scale from 0 to 10, how happy they are. Incidentally, here a large amount of terms is in use, such as satisfaction, well-being or utility. It turns out that all feelings of happiness are physically identical, in other words, there is no difference in quality. Besides, people are motivated by expecting happiness.

In the common economic theory a successful policy is coupled to a growth of the gross domestic product. In reality it would be better to test the satisfaction of people. Layard shows, that the satisfaction indeed increases with the individual income3. However, when that income rises above yearly $20.000, then the income satisfaction slowly saturates. Then other domains of human life become relatively more important. For income satisfaction mainly the reference group is important, since it allows the individual to gauge his own wealth. The relative income is what matters. Thus the inequality is a source of discontent. Another surprising find is that individuals get used to their income. A raise in income makes temporarily happy, but the euphoria soon wanes. This phenomenon has far-reaching consequences, and is called preference drift.

Forming a family on average raises the human happiness. A divorce leads to a drastic fall of the well-being. Incidentally, the same effect occurs for the former employee. Unemployment is a true bringer of misery. An affected health is also an attack on well-being, especially in the case of chronic physical or mental pain. The well-being can also diminish due to social developments, such as the disappearance of close communities. In this respect Layard is inclined to moralize a bit, and is fast with his conclusions. For instance, on p.88 he argues, that people become more aggressive by watching television broadcasting. Layard also does not explain clearly, that it is sometimes difficult to distinguish between causes and consequences. For instance, it may well be, that happy people are better able to form a family. In such instances, the reader must be vigilant.

Layard defends the striking hypothesis, that a preference for virtues such as honesty and reliability is genetically determined. He suggests the same for competition. The meaning of life can naturally not purely consist of searching pleasure. Layard dislikes egoism, and advocates morals. He proposes to apply the Golden Rule of the New Testament as a universal norm: reflect objectively on any situation, and decide on the basis of sympathy for the others4. People must always take into account the external effects of the personal actions. In this respect it is important, that measurements of satisfaction allow for an interpersonal comparison. This is an essential find, because the common economics yet denies this possibility. Layard also rejects too much dynamics in society, because it undermines the familiar relations too much.

Thus it turns out that Layard is not afraid to draw conclusions and do recommendations, which go beyond the recently acquired scientific knowledge. This implies a significant dose of subjectivity. For instance, Layard is an energetic propagandist of family counseling for reducing the number of divorces. And the depression, which is a source of discontent, must be combatted by means of cognitive therapy, mysticism (religion) and Buddhism. It is an interesting suggestion for policy: giving meaning, irrespective of its form, is a social task. Layard wants to start this at the schools. And when some people are insensitive to the mental care, then psychic medication can be the solution.

It must be repeated: the policy proposals of Layard lack a sound scientific basis. His opinions are merely the result of his own life experience. For those, like your reviewer, who are mainly interested in proved facts, the moralizing of Layard appears a bit pedantic. On the other hand, it enlivens the contents. And it shows, how scientific ideas can affect the policy. It is anyway useful to confront the economists among the readers with the findings from other social sciences and with philosophical ideas. Even when some conclusions of Layard are unsound, yet Happiness contains so many innovative insights, that an adaptation of the common economics is desirable.

  1. A problem with the expression happiness economics is that it is also used by groups, that reject a materialistic attitude. They believe that the economic competition is hurtful for the human happiness, and propagate a more sober way of living, which gives priority to nature and meaning. They commonly promote an economic zero growth. This is evidently not the preference of Layard. Layard just wants, that there is an awareness of the psychic processes, which are the foundation of materialism. The expression behavioural economics has the disadvantage, that it does not express the essence. The choice for a certain behaviour is the consequence of the individual mental attitude, and not its cause. The feeling precede the behaviour. (back)
  2. This also holds for Herman van Veen, who writes the song Zo vrolijk: Today I am so cheerful, / so cheerful, so cheerful. / Today I am so cheerful, / more cheerful than I ever was. / Sometimes I am unhappy, / extremely unhappy. / Sometimes I am unhappy, / then I die of grief. / Sometimes I am neurotic, / psychotic and chaotic, / unstable and neogothic, / but clearly not today. (back)
  3. Many jokes about money show that this is a popular wisdom. For instance, the bank director asks to the applicant: "Do you know what working in a bank means?" Reply: "No, but I like using money". Or two policy officers visit the Tour de France. One says: "Man, you can earn money here. Forty bicyles without lights!" Competition can be manipulated. Thus the employee threatens his boss: "When I do not receive a raise of my wage this year, then I will tell all my colleagues that I did get one". Some exchange of satisfaction with other domains is possible. For instance, a man complains: "My divorce has cost me twice as much as my marriage". His friend comforts him: "Well, it will give you much more pleasure". (back)
  4. The total of similar texts in the Old Testament is not thicker than the magazine Donald Duck. Layard refers to Leviticus article 19 paragraph 18: You must not be vindictive and hateful towards the children of your peope, but love your neighbour like yourself: I am the Lord. Also Psalms 119 can be consulted: My heart sticks to truth and virtue; / it will hope for Your testimony; / do not disappoint me; inspire me, loving You, to fear You, Oh Lord. / When You widen my heart by true joy, / I will go the path of Your commands. / Teach me, oh Lord, the way, fixed by You, / then I will continue it until the end; / give me wisdom, irradiated with Devine light; / then my eye will focus on Your laws; / then I maintain these, although my soul may err; / then the heart will coincide with my deeds. / Make me follow the path of Your commands; / support on that track my erring steps; / there all my pleasure and love goes. / Ah, bow my heart and intense desire of the soul, / oh Lord, towards Your testimony alone; / do not let avarice catch me in its snare. Unfortunately, the Psalms are dominated by commanding worship and honour, hostility and revenge. (back)