SANE Views

Vol.7 No.4, 05 April 2007

Can Human Happiness Be Measured?

By Margaret Legum

Economics may be about to be liberated from the narrowness of its assumed purposes. The task of economics is usually broadly defined as measuring what goes into a process (its input) and what comes out (the output), the object being to minimize the former and maximise the latter, and so produce and calculate efficiency in the use of resources. That, combined with measuring the gross domestic product, enables a ranking of countries in terms of efficiency and wealth.

The New Economics Foundation (NEF) in London has come up with a new set of measures that produces surprising results. The somewhat coyly named Happy Planet Index measures for the first time, coherently, both human life and happiness and the impact of an economy on the sustainability of planet Earth. Hence ‘happy’ and ‘planet’ in the title

Objectively measurable aspects of the HPI include incomes, longevity, infant mortality and levels of education; plus the use of renewable resources, the objective quality of the natural environment, including air, water and soil and the use of non-renewable resources- thus a country’s ecological footprint.

Happiness is measured by a set of subjective questions about how people experience the quality of their lives. It includes how participative people think their democracy is. It results in a ranking of countries by human happiness and ecological sustainability. For details go to www.happyplanetindex.org

You may be surprised to hear that the richest countries in GDP terms come pretty low on the HPI – and not only because their developed economies create a large ecological footprint. Their people experience a relatively low level of life satisfaction. Britain comes 108th, and the USA 150th. Poor Zimbabwe comes last.

By contrast the Pacific island of Vanuatu comes top, with pretty long lives and a highly enjoyable lifestyle embedded in flourishing local economies, with a low environmental impact. It is noticeable that islands are generally high in the index - probably because people experience an inclusive, community-based sense of security within their political economy. New Zealand does well – second to Vanuatu only because it uses more non-renewable resources. New Zealand has a large public sector, low unemployment, therefore very little crime.

So if it’s human satisfaction you are after, combined with helping Earth survive, what you measure might help us re-formulate policy. The research has profound implications not only for economics, but also for our view of human nature. One of the assumptions that classical economics makes is that people are by nature driven essentially by the competitive wish to accumulate, and their ‘satisfaction’ is measured by what they acquire.

Nick Marks, who heads NEF’s Centre for Well-being, which developed the HPI, says: ‘governments the world over have been concentrating on the wrong targets for too long.’

That is the result of the limitations on the way that economics is taught and used. It would matter less if the narrowness of measuring output by quantity were acknowledged, and the modesty of its usefulness accepted. Sadly mainstream economists advise policy-makers as though what they measure will produce human satisfaction.

Factors like peoples’ feelings of well-being, optimism and connectedness – assumed not to be measurable, and excluded by economics – in practice make up the stuff of life for most people. We know that from our own lives. We know that money and possessions are not causally connected to happiness. We know for instance that, if you force people to neglect their children to make a living, you create unhappiness unto the umpteenth generation. We know that local connectedness is often the muscle that links everything we do, so that a globally disconnected life, its only advantage cheap goods, is a psychological jungle.

So if physically measurable things are the only ones we count, we will misdirect policy-makers. Unless economics can re-align itself with what matters to human beings, it runs the danger of being seen not only as the gloomy science, but as irrelevant to what matters to people.

Our finest aspirations for the world’s political economy are often contradicted by the global economic dispensation to which we have been committed on the advice of mainstream economics. For instance, the Atlantic Charter, signed by Western leaders after the end of last world war, commits us to enable people to ‘live out our lives in freedom from fear and want.’

In truth, even those whose massive wealth entails enslavement to ‘want’ by others, probably live with constant ‘fear’, because that is an ordinary human response to surrounding ourselves with razor-wire, dogs and insecure ‘security’. So who wins?

The reason we have tolerated for so long a global regime that compels competitiveness, enhances inequality, and leaves millions out altogether, is partly at least because we have been persuaded that it is the only way to run economies.

It is time for a more intentional approach to economics. It would start with defining human outcomes, expressed in terms of real knowledge and research about what humans want. It would include how we can cooperate with planet Earth so that we, our children and it have a future together. The HPI is a wonderful start, conceptually as well as practically.