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| LAYARD 1
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| Introduction
| | <center>[[Happiness]] | [[Methodology]] | [[Global Issues]] | [[Income / Wages]] | [[Workplace]] | [[Consumerism]]</center> |
| • Bentham and others proposed using happiness as an actual study in the 18th century.
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| • They believed that the goal of public policy should be to maximize the happiness in society.
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| • GDP grew into a means of measuring happiness, which historically is simply not true.
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| • Psychology, taken with economics can serve as a useful measure of happiness
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| Definition
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| • "By happiness I mean feeling good - enjoying life and feeling it is wonderful. And by unhappiness I mean feeling bad and wishing things were different. All our experience has in it a dimension which corresponds to how good or bad we feel. In fact most people find it easy to say how good they are feeling.
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| • Happiness and unhappiness operate on the same plane. Unhappiness is a quality of having little happiness.
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| The Fluctuation of Mood
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| • Our mood fluctuates based on internal and external factors all the time. For instance, one study identified 15 episodes in a day and measured the mood as it moved high and low throughout.
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| • Some people are naturally happier than others.
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| Evidence from Neuroscience
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| • There are accurate means of measuring happiness.
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| • Happiness originates from the left side of the brain, while unhappiness derives from the right side.
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| • Some people naturally have more activity in the right or left sides of their brain, making them naturally happier or unhappier.
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| The Desire to Feel Good
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| • Happiness matters because its what people want.
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| • Modern psychologists believe two things:
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| • We are always evaluating our situation and elements in it.
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| • We are attracted to the favorable elements and seek to and repelled by the unfavorable elements. As an extension, we try to increase favorable elements, and decrease unfavorable elements. This is "approach and avoidance"
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| • These two show that people are constantly trying to improve their lot and hence feel better. Evolution forced this for survival. Evaluation, as part of our instinct, is passive.
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| • Conclusion: There is an evaluative faculty in all of us which tells us how happy we are and then directs our actions towards improving our happiness."
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| • Law of demand applies to competing objects of happiness - this is derived from Adam Smith's invisible hand
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| The Overall Social Outcome
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| • Modern economics arises from this desire to be happier. Unfortunately, the model assumes constant tastes, no problems in information and so forth. Because economics and social ideology are so interconnected, this poses massive problems.
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| Trends in Happiness
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| • Generally, the US as a society hasn't increased its happiness. Refer to table 3. This is despite a huge (many times more) increase in the economy. The same holds true in many other Western nations, such as Japan. This is startling, because within any community there is a correlation between happiness and income. NB: Are the same people being interviewed? Faulty data?
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| • Skeptic's reaction: Expectations of happiness have increased, hence while overall happiness increases, people don't feel happier.
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| Comparing Happiness Across Countries
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| • Figure 5 shows cross-section of countries. Happiness impacts income up to about $15,000. Russia and South Africa, with oppression exists is also important.
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| Trends in Depression and Crime
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| • Clinical depression has increased since WWII, even as incomes have skyrocketed.
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| • Crime fell before WWI, but has skyrocketed since WWII.
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| LAYARD 2
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| Introduction
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| • On average, rich people are still happier than poor people. However, over time, societies are not happier.
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| • People want to move on their own with upward income, not with the rest of society. (If my income doubles, and everyone else's stays the same, what's the point).
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| • Expectations factor into happiness. As I expect more and more, and I become satisfied with less and less.
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| Habituation
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| • Strength of survival is adaptation - at which humans are very successful. This prevents people from being constantly miserable, but also incredibly and permanently happy.
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| • Studies in the UK, for example show that only the increase of wages is important for overall job satisfaction.
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| • Hedonic Treadmill: trying to rise up to the next rung on the ladder, but then finding that rung is at the bottom, so repeating.
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| • We get used to material possessions.
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| • Because things don't make us happy as long as we think they will, we tend to, as a society, work more and more to achieve better material goods.
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| Rivalry
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| • Figure 2 - Most people prefer 2nd world, in which people are worse off than the original person. 1970s sucked so much because everyone's wages were not rising as fast as others, which coupled with inflation sucked.
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| • Relativity is important. East Germans, though much better off are unhappy, because they compare themselves much more with West Germans instead of other Soviet bloc countries. Same with women versus men instead of other women.
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| • This makes meaningful economic growth very difficult, because people constantly want others incomes to decrease.
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| • People are NOT rivalrous about leisure. They would always choose more leisure, even if everyone else has even more than that, over simply having less leisure, but still more than everyone else.
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| Rethinking Public Economics
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| • Taxation distorts decisions between leisure and income. Studies suggest that a level of 60% (30% to deal with rivalry, and 30% for habituation) - which is present in Europe. Unfortunately, this much taxation reduces work effort and inevitably reduces GDP - which is a bad measure of well-being anyway.
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| Changing Values
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| • Rivalry wired into our genes. Genetics leads the top monkey to reproduce at a much higher rate, thus weeding out those with no drive for success. Those that win Oscars live four years longer than those who are nominated but fail to win. We now protect weaker members of our society who would have perished in the wild.
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| The Fallacy of Consumer Sovereignty
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| • Consumers and producers are not different. We are both a consumer and a producer. I seek further income and consumption for status.
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| • Happiness function
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| The Record of the 80s and 90s
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| • Despite the fact that in the goal of the happiness function, where alpha should go downward, and beta go upward, it has been reversed throughout the 90s.
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| • Money actually clouds performance - Edward Deci's puzzle experiment proves it so.
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| • The arrival of television before the 80s shows us how other people live, which inevitably leads to less happiness as people directly compare themselves.
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| • Television actually does lead to differences in behavior - more violence and promiscuity for instance. TV tends to diminish our mood as we constantly compare us and our spouses to images we can't hope to achieve on TV. Television "creates discontent by bombarding us with images of body shapes, riches and goods we do not have."
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| Young people are most impressionable. Advertisers likewise target them moreso. To combat this (because this can create a wave of depression!) - Scandinavian countries have banned TV advertisements directed at the under 12 crowd.
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| Equality
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| • We can now prove empirically that money is more valuable to the poor than the rich, using things such as the Eurobarometer.
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| Looking Forward
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| Genes and Previous Experience
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| • People are born different, and these differences are amplified by different subsequent life experiences. Happiness depends on both genes and experience.
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| • Genes are important - Wellbeing of twins survey on page 18th.
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| LAYARD 3
| | <center>''"Although [money's] utter absence, can breed misery, having it does not guarantee happiness."'' - David G. Myers, social psychologist, award-winning researcher |
| Introduction
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| • Happiness depends on more than just purchasing power. It depends on tastes and entire social contexts.
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| | [[Image:Happinesssmiley.gif]] </center> |
| Some Evidence
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| • Seven main factors make people happy: income, work, private life, community, health, freedom, and a philosophy of life.
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| • Table 1 shows general increase / decrease in happiness as a result from these.
| | Happiness is an important study in an economics because it provides a legitimate way of understanding why people make the decisions they do in a free market economy. Through income, consumerism, and the workplace, people strive to accomplish what makes them happy. That may mean taking a bad job that pays a lot in order to obtain status, or taking an easy job without a lot of salary for personal enjoyment. By analyzing not only these trends, but also global concerns and the methodology behind both the economic and philosophical study of happiness, we can understand why happiness plays such an important part of modern economics. |
| • Unemployment has disastrous effects on happiness. From there, the threat of unemployment also plays a large role. In general, happiness can be increased from increasing job security.
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| • Family inflences are also important.
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| • If society as a whole decreased its happiness by one third, it wouldn't actually decrease happiness by one unit (as it does for one individual according to Table 1), because everyone would be suffering together.
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| Policy Implications
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| Work, Job Security, Stress
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| • Similar to a divorce - you no longer are needed. That's why both of these are such devastating outcomes for happiness.
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| • Most economists believe that unemployment has a greater effect on society (loss of income to spend, loss of productivity), but the loss of happiness.
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| • SINCE GOVERNMENT HAS AN IMPLICIT OBJECTIVE TO PROVIDE HAPPINESS (AS PER TRADITIONAL SOCIAL CONTRACT THEORY, AND EVEN OUR CONSTITUTION, THE REDUCTION OF UNEMPLOYMENT SHOULD BE A KEY POLICY GOAL.
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| • Job security is also important. Workers who feel that there jobs are secure tend to be much happier and also much more productive. Job security is important for the economy.
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| • Most people would accept less pay for less hours to work, but as soon as something like this is suggested, an employees commitment to the firm is questioned, and they lose job security. In either case they have less happiness.
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| • Higher taxation for less hours worked would allow government to provide for people, keep incomes in check (resulting in moderate happiness for everyone), and more job security while less exhausting jobs, which allow more time for family. In general, happiness skyrockets across the board.
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| Secure Families and Communities
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| • Geographical mobility is the primary culprit in unhappiness.
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| • It breaks up families, which leads to a decrease in happiness and also leads to an increase in crime. We can empirically prove this by looking at recent skyrocketing crime rates. This is because of less family bonds. Crime is lower when people trust each other and communities are more homogenous.
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| • The resultant rise in crime can be one of the biggest failures.
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| Mental Health
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| • Mental health is very important because it gives us subjective findings, of which happiness is, rather than objective findings.
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| • Another shortcoming is the little attention given to mental disorders. Disorders such as schizophrenia and depression lead to a great deal of unhappiness.
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| • 25% of people suffer from mental illness during their lives, including 15% from severe depression. Only a quarter of those are treated though, and even then, treated poorly.
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| • One of the main reasons for any improvement in happiness is the ability to treat schizophrenia.
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| • Drugs like Prozac are actually good, because they bypass these mental disorders and actually make people happy, letting them lead healthy, fun, productive lives.
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| Personal and Political Freedom
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| • Overall political freedom is also crucial. The overall difference in 1995 Hungary (democratic) vs. 1995 Belarus (communist) is over 1 unit of happiness.
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| • Table 2 extends Table 1 to discuss this.
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| A Philosophy of Life
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| Mood Control
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| • Different people have different ways of disciplining their minds and their moods.
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| • People who believe in God are happier. Does happiness encourage belief or belief happiness?
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| Relations With Others
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| • Happiness depends not only how you interact with yourself, but with others as well.
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| • People don't perceive that other people live as good (moral and honest) lives as they used to. This could be from another thing (the rise of crime resulting from less family bonds). Happiness multiplier?
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| The Moral Vacuum
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| • The decrease in religious belief has precipitated a moral vacuum over the past hundred years.
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| • The Invisible Hand theory espoused by Adam Smith actually is harmful, because if everyone acts only in self interest, people will cease to be moral.
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| • Economics should then NOT be taught as the end all be all. Economcs should deal with market systems, while other government policies can deal with other things to improve happiness and morality.
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| • Economics teaches immorality. (?????)
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| The Greatest Happiness
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| • Layard's Happiness Principle: utilitarian (greatest good for greatest number).
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| i. It is in our nature to want to be happy.
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| ii. We also want our relatives to be happy, a parent’s love being the strongest example.
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| iii. As regards relationships outside the family, humans are innately sociable and in varying degrees helpful to each other. We know genes are involved in this because twin studies show that the trait of cooperativeness is partly heritable. This trait provides the emotional support for the development of a moral theory.
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| iv. So does our next trait, which is an inbuilt sense of fairness, which requires at the very least the equal treatment of equals.
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| v. To these ingredients we bring the power of reason, which reasons about moral issues in much the same way that it reasons about the working of the natural world. In both cases it seeks a unified theory. In natural science this has paid off handsomely and made us masters of the earth. In moral philosophy there has been less progress but, if we persevere, we surely have a chance to better master ourselves.
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| Man's Partial Unselfishness
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| • Humans seek good for more than just themselves. Evolution created cooperation - its how societies were built.
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| • We feel happiness (proven through neuroscience) when we cooperate and unhappiness when we conflict.
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| • Instincts have been hones and refined over experience, and now we cooperate to a certain extent, and gain from it.
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| • We have an inherited instinct for fairness and morality, and we cooperate not because society tells us so, but because it makes us feel good.
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