Funnily enough when you look at the countries in the 'happiness index' they all happen to be countries which fundamentally have pretty good underlying economies (and often they tend to be from european countries that have decent social support structure).
Well-being is probably a third-order effect from a strong economy, good healthcare / social care, culture and a variety of other factors. But because it is a third-order it is very hard to measure the impact of policy, because:
* They are 'arms length' from policy changes.
* The indexes are slow to respond to changes.
* They are noisy and affected by unrelated factors (i.e. does a colder winter decrease happiness?)
* A policy which improves well-being today could very well decrease well-being far into the future (e.g. increasing a countries spending and decreasing tax).
Is the well-being a result of a strong economy or vice versa? You seem to assume directionality that might be the opposite. Perhaps workers not fearful of losing their healthcare if they leave their jobs are more productive, or do more broad schooling because there is less pressure to immediately start making money to avoid poverty, and this leads to more productivity or innovation.
But in one direction you have more wealth enabling people to live better, and on the other direction you have people with better lives being able to work better. It is very clear those effects do not have the same intensity.
A few things worth mentioning: in the countries highest on the happiness indices, taxes are also among the highest in the world, and distribution of wealth less skewed.
If more financially homogeneous (i.e., less wealth skew) societies are happier, would you expect more culturally homogeneous (i.e., shared norms/history) societies to be happier?
Maybe we are measuring happiness incorrectly. Instead of most people being happy, what if we made a small number of people REALLY happy? Maybe the 0.1% are so happy that it balances out the sadness of everyone else?
As sarcastic as this is, you still end up with the same just less intensity. If statistics and estimation are involved, this proposed happiness index will leave some behind and end up with everybody the same.
If you used the median then only actions which affected the utility of someone in the top 50% and bottom 50% would have any moral impact. e.g. two miserable people torturing each other or helping each other would be neither good nor bad, since the median would not change.
Neither of those seem that important at the country level as long as it's true at some level somewhere.
If you're in a small country richer people in the neighboring country seem about as likely to have the same effect. On the other hand, if you're in a large country and they live in a different city you're not running into them.
An issue with nationalism is that nations are in some ways very real and in some ways fake.
I would expect this to be true to some degree, with declining marginal returns to homogeneity after some point maybe even tipping negative with too much homogeneity.
There seems to be a lot of countries that are culturally homogenious, and yet they are poor and miserable. So it does not seem to check out.
It is also not clear how one should calculate this - for example you could have white americans of german dissent violently disagreeing in issues of Trump, or hell, this about civil war. You could have people of different background hold very similar opinions.
My general hypothesis is that most people are happier when they feel typical or normal (even when they claim to value being different). This seems to be the essence of lots of advertising. To increase their own happiness, most people want to "normalize" everyone around them (levels of wealth, values, etc).
Perhaps national happiness (since that is the level of society being discussed) is a joint function of cultural AND financial homogeneity? Many poor countries with high cultural homogeneity have tremendous financial heterogeneity (e.g., wealthy strongmen and their lackeys), which leads to unhappiness.
There are more ways that people want to be normal than just cultural and financial. For example, I would also posit that people with more common personality traits are probably happier. However, money and culture seem to cover a large fraction of how people perceive normality.
Nations that practiced colonialism didn't actually benefit those "nations", more like specific people in the nations. It probably made them poorer if anything, though people will sacrifice wealth for feeling proud of being in a cool empire and getting to drink tea.
The former colonial nations do always show up high in every index, but that's correlation because they're in Europe. The colonised Finland and Ireland are always in there too.
why are we speaking about happiness and not about the colonisation of the solar system or about finding out what truly lies behind our existence? simulation, multiverse or what and if so, why?
That said, a good metric obviously mesures power on this planet so it must be something like how fast an economy can build a space station or advanced military equipment.
Honestly it reminds me most of how some people try to spin Bitcoin’s power use as a good thing.
The comment does have some similarity to a point which I think reasonable, but doesn’t quite capture the thing.
Specifically, it questions happiness as a goal. This, I think, has something to it, but not quite in the way they said. For an individual who is neither unhappy nor “feeling nothing”, “being happy” is, I think, a questionable goal, as I think it puts things backwards.
But, valuing others being happy, is, I think, very often a rather good heuristic, as “things that make someone happy” are often “things that benefit them” (though not always. Non-voluntarily chemically inducing a euphoria in someone, doesn’t benefit them. ) .
Looking at “how happy and satisfied are people generally” is a pretty decent heuristic for estimating how well things are going for people overall, though this heuristic can be goodharted.
Perhaps somewhat better than “how happy are you” would be “how well are things going for you? How much do the general states of affairs align with your preferences, and how is the rate of change of the degree to which the general state of affairs aligns with your preferences? How’s it going?”.
This combination of things is, I think, closer to what we should ideally want for each-other than “happiness”, but, “happiness” is still a pretty good approximation in most reasonable circumstances.
(It is best to avoid the unreasonable circumstances where it ceases to be a good approximation)
I lived and worked in both systems: socialist France and laissez faire capitalist Hong Kong, and I can assure you that despite the constant possibility of losing job and healthcare in Hong Kong, the amount of money, the motivation of the people around me, and the success of the state as a whole (economically) sure trumps all the bells and whistles of the tax heavy nanny state breeding a country of uninspired Karens :D
Im not saying there arent nice things in France but it s not as fun to be in than HK, anecdotally.
I concur. Ask the Filipino nannies fresh out of the Chungking Mansions what their experience is. Or how they’re hoy every Sunday being a public holiday because otherwise their employers would work them 7 days a week, 52 weeks a year.
A key consideration should be how easy it is to 'game' well-being measurements.
It's pretty hard to game economic measurements as a whole. Metrics with smaller scope are generally much easier to game so while they may be a slightly more accurate measurement initially, they may be more vulnerable to corruption.
The US spends more than anyone on healthcare as a percentage of GDP and gets mediocre results at best. The most frequently proposed solution to this is to turn over more of the control of our healthcare to the people who created the current system and also lied us into the Iraq war where we killed millions of people for corporate profits.
>If a genie wish made everyone healthy and brought about world peace, The US's GDP would drop, quite dramatically!
Would it? 'We must invest in a strong military to keep the peace!' and 'Everyone is healthy, lets invest in preventative care and longevity to keep it that way!'
The US could easily take much of that military funding and put it into infrastructure, job programs and healthcare spending and allow European countries to increase their military spending. This would keep our GDP and reduce our deficit with tax collection.
Every time I suggest this, however, I seem to be downvoted into oblivion and poopooed by the Europeans on the forum. I guess a more isolationist policy isn't that great of an idea after all.
I’m European and I fully understand that our free health care and giant social programs (on many countries) are paid for by our minuscule military spending - which turned out to be a terrible idea considering actually we live next to a revisionist and expansionist power.
But Europeans liked to believe that WW2 had somehow “shown the world” that wars were unwinnable bla bla bla while really the US just installed a giant protectorate system on Europe and kept it under their nuclear umbrella (one which the continent largely decided to maintain after 1991).
So yes, there are Europeans who understand (and should) that European prosperity was bought with an American military umbrella, one which we don’t pay for.
But - the Trumpian argument that this architecture is “useless” is also wrong in my view. The system was constructed to benefit the US, and so it did. The problem is that after 1991 everyone got sloppy, and capital took enormous control over politics of the US and the West in general (since there were no enemies but only “opportunities for investment”) and this led to a series of poorly thought out disasters - including China in GATT/WTO hoping it would democratize, etc.
Don't get me wrong, I'm no Trumper, and don't think we should leave NATO. But the US military expansionist policy is tiresome for the US as well as for the European population who complain about it. There are a vocal minority (maybe not even a minority) who want our young men and women to come home and have our spending aimed towards education, our crumbling infrastructure, clean energy, climate cleanup, paying down our national debt, health care and fixing social security. Those are just the top things, there are other items to do that don't involve violent expansion or nation building. We don't mind working with NATO for peace keeping missions, though. Those seem to have broad support, but the media's spell seems to have been broken for a while on this rah rah, invade every country for any manufactured reason so the few can make billions =[
I agree in a sense. As far as US military expansionism - I think the overall security architecture is sound (NATO, AUSUKNZ, Four Eyes and Japan/South Korea means that the US effectively surrounds all of its major challengers on all sides). It’s kept US dominance in place for almost a century now. And I believe that’s a good thing.
But it’s on the implementation that things went haywire.
Because pre-fracking the US was so dependent on foreign energy, adventurism was encouraged in Iraq which led to a major geopolitical disaster (and a huge sink for the country’s resources). In that respect, yes the expansionist policy went totally overboard, due to poor leadership and planning and unrealistic political objectives.
Overall I think:
- the overall architecture is sound. The US dominates and reaps benefits for it, while in my opinion maintaining peace through strength
- but Europe should be spending enormous amounts more in military power - something like 5% of GDP at least - so it has a realistic chance to defeat Russia on the battlefield on its own
- if that happened then the US could probably reduce its military spending (im not even sure they would because of the issues you listed though).
It's easy to game military spending metrics depending on what you choose to include. For example, some countries include pension payments for retired veterans and others do not.
I'd argue that politicians have completely gamed the U-3 unemployment rate based on their positions toward gig work, part time work, minimum wage, etc.
The various unemployment metrics used to be highly correlated, but they've diverged in recent decades.
And you can absolutely dial up GDP without dialing up median income per capita as well.
I remember about a decade ago I was living in Singapore and there was a minor controversy coz the country appeared near the bottom of some "happiness" country ranking. A lot of people felt vindicated by this.
The government got really mad and decided, in true Singaporean fashion that the only logical solution was to create their own metric and ranking. One where, coincidentally they were #1/#2 happiest instead of #1/2 unhappiest. A completely different set of people felt equally vindicated by this.
How does one obtain a realistic and reliable measure of the 'happiness index' for any particular country? I imagine this is something that's subject to massive propaganda efforts (for example, East Germany attempted to keep its suicide rate hidden from view, at least according to the movie 'The Lives of Others').
It's tricky - also because it's very hard to aggregate 'happiness'; for economy you can reasonably get the total and just calculate an average, but any 'happiness' measure inherently has to be bottom-up and then the differences between subpopulations in a single country become critical.
Like, someone can compare their well-being at San Francisco versus Paris and see which one is better but that would be a comparison of well-being for them which won't necessarily hold for Parisians and SanFranciscans of a different income level or with different cultural values - while wealth can be compared directly in a mostly objective manner (e.g. adjusting for purchasing parity).
I suspect that different cultures apply different meanings to "happiness". Heck, if you ask the same person on different days how happy he is, I bet you get different answers. I don't see how such a measure across cultures can be reliable.
Happiness indexes are rather meaningless and arbitrary, often reflecting more the political biases of the index creators rather than things that regular people care about. Instead of making indexes it's better to look at revealed preferences in terms of voluntary migration rate. The USA has a positive net migration rate with all major European countries despite having lower index scores.
A lot of them are also in places where the climate spends half the year trying to freeze you to death. I've always wondered if that's coincidental.
I could imagine it going a few different ways. Maybe every day when you wake up and have not frozen to death, you already feel accomplished, so start the day with a win. Or maybe there's a certain resilience already in people who would choose to continue to live in such a climate. Or maybe you just don't have much time to care much about your neighbors' negative qualities when there are homes to keep warm.
Maybe you can just afford to complain more about everything else when you don't have the weather as an easy (and unifying) adversary to complain about.
My guess was a dark and horrible "adverse selection" where suicide or emmigration already weeded out the unhappy. Reducing suicide decreases overall happiness - even though it also avoids the damage.
Well the most conspicuous thing is that the countries that top these indices have mixed economies with a heavy degree of public participation, plus high and progressive taxation and a strong social safety net.
Good well-being should be the desired outcome. It should be the measurement by which "success" is determined.
What tools are necessary to achieve good well-being should be the topic of research and political debate.
I think the problem we have today is that, politicians in particular, are only interested in the metrics that make their preferred tools look good. So a hard line socialist is inclined to ignore the benefits a free market provides and focus solely on how state-run programs can solve everything. On the flip-side, conservatives see a strong economy, put all their faith behind the free market, and ignore the proven effectiveness social programs have in areas where capitalism struggles like healthcare.
Which of these countries you're referring to doesn't support a highly extractive (no matter the cost as long as there's sufficient profit in it), "greed is good" version of capitalism? If you're referring to the Nordic countries, from a Marxist perspective, they exploit workers plenty, just mostly not their workers. Lenin talks about this practice in _Imperialism, the Highest Stage of Capitalism_ wherein capitalist countries have an incentive to make conditions at home just good enough to stave off revolution, but not so good as to overly damage profit margins. They do so by essentially exporting misery to other countries the way the US has basically turned China into a large US manufacturing annex. The global south is highly exploited by capitalist nations. Norway in particular struggles with huge issues related to climate change, being something like the 13th largest oil producer in the world.
TL;DR: are any of these countries you're referring to not capitalist countries that just export misery?
> So — suppose we give this sort of combined well-being survey to a random sample of people, and also measure what products and services they've used and purchased. From this dataset, we could make reasonable statistical inferences about the amount of well-being increase or decrease associated with a certain product or service among a certain class of people.
Unfortunately, no, you can't. There are lots and lots of problems. Just a few off the top of my head:
1. The effects of products are not uniform across the population. Alcohol, for example, catalyzes well-being for some people, but for others it has a dramatic negative effect.
2. The effects of consumption on well-being change with the time horizon over which you measure them. Eating ice cream might improve my subjective well-being today, but harm it tomorrow when it has a deleterious effect on my health.
3. Externalities. Owning a private jet might improve my subjective well-being, but harm everyone else's with its noise and emissions.
Measuring economic output is actually a not-entirely-unreasonable proxy for measuring well-being because in a free market people presumably make rational choices and spend their money in a way that maximizes their well-being. The problem is not that the proxy is wrong, the problem is that people turn out not to be very good at making these choices. It's not entirely their fault. A big part of the problem is information asymmetry: producers know a lot more about the potential negative outcomes of their products than consumers do.
I think a much better way to tackle this problem is with education and stronger consumer disclosure laws rather than trying to change the metric to something as poorly defined as "well-being catalysis".
Whether or not well-being is as easy to measur, your assumptions about free-market as a stand-in for well-being does not have a solid foundation.
> in a free market people presumably make rational choices and spend their money in a way that maximizes their well-being.
There is no particular reason to presume this is true, and many reasons to presume it is not.
Psychology is littered with well-demonstrated examples of humans acting against self-interest. 1) People are consistently willing to incur personal cost for the benefit of a perceived community, and are even willing to incur personal cost to punish those working against it. Community recognition is not required to observe this behavior. 2) People are quite susceptible to marketing. The history of the American tobacco industry is a great example.
The assumption that self-interested rational entities leads to a healthy or productive society has been similarly discredited. The Honduran Free Trade zones and Eddie Lampert's catastrophic reorganization of Sears are great counterexamples.
> Psychology is littered with well-demonstrated examples of humans acting against self-interest.
That is often claimed, but it is far from clear that it is actually true. The problem is that in order to make this assessment at all, someone has to decide what a person's self-interest actually is. There is no universal objective measure of self-interest because different people want different things (this is the reason trade works at all).
> People are consistently willing to incur personal cost for the benefit of a perceived community, and are even willing to incur personal cost to punish those working against it. Community recognition is not required to observe this behavior.
Sure. But how is this working against self-interest? I for one like being part of a strong, cohesive community. But I also recognize that building community requires effort, and that effort incurs a cost. So who are you to say that the cost I personally bear to shoulder my share of that burden is "acting against my self-interest"?
> People are quite susceptible to marketing
One man's marketing is another man's education.
> The history of the American tobacco industry is a great example.
Sure, but that was, in retrospect, an example of the tobacco industry just flat-out lying to people. If you want to argue that society benefits from having some mechanism to discourage willful deception I certainly won't argue with that.
But even a case as clear-cut as tobacco still has grey areas. People still smoke despite the fact that the risks are now well known. If someone knows the risks and still chooses to take them on because they'd rather have a nicotine buzz than a long buzz-free life, who are you and I to tell them that they are wrong? Because once you take that step it's a very slippery slope from there to not allowing anyone to take any risks at all.
Fair enough. But I think most people are skeptical the government is in a better position to determine what makes them happiest. Government edicts/propaganda may, in fact, do the opposite merely by virtue of being edicts/propaganda.
only applies when countries have similar demographics. e.g. most countries are a magnitude smaller than the US(except for China, India). Most countries have a much more homogeneous population(e.g. China, India). Best comparison I can think of is EU vs US, and if you can show that Europeans are happier, then that calls for a very limited central government that is not elected, and states can model themselves after European countries. Scale and demographics are important.
That post wasn't meant in that way. I'm a supporter of decentralization, a strong local government and a weak federal government (city/county > state > federal), but I wanted to demonstrate how difficult it is to compare different countries. Which was evidently worthy of a downvote :shrug:.
+1! I'd also add that social media seems to have a disproportionate effect on happiness and aspirations, so finding a moderator for social media should be a focus as well. Not as in censorship, but eg. being able to trace news articles back to source, allowing people to weight information/advice from friends, encouraging cross-pollination of memes rather than constructing bubbles etc.
And that is exactly what New Zealand started doing in 2019[0].
A large problem with metrics is that they have a tendency of becoming a goal of their own. Instead of them being used as mere indicators, we end up with entire countries whose sole goal is to eternally increase their GDP - to the extent that it ends up harming the general population.
People do not solely exist to generate revenue, and it is about time we stop pretending they do.
> A large problem with metrics is that they have a tendency of becoming a goal of their own.
I read this in Project to Product:
"As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.
A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right." --Jeff Bezos
"It is possible, after a while, to develop certain dangerous habits of thought. One is that, while all important enterprises need careful organization, it is the organization that needs organizing, rather than the enterprise."
- Terry Pratchett, from Thief of Time (2001)
>We confirm that both mortality and morbidity have a negative effect on GDP per capita growth. The effect of reducing mortality by 10 percent is that of adding at least 9.6 percentage points to GDP per capita growth over a period of about one quarter century, according to [13] bounding strategy.
Given how overwhelming majority of Covid deaths are elderly and sickly people, it is virtually guaranteed that on net, Covid deaths themselves are positive for the economy. The elderly overwhelmingly have their productive years behind them, and in the retirement, they mostly consume the resources instead of producing them. So no, Covid deaths are not bad for GDP. Situation would have been much different if the Covid victims were younger and healthier on average.
The quality sure can, if you can catch COVID and increase your mortality by going to the hospital.
We saw this in the early days of both Wuhan and later NYC. The beds overfilled, then the hallways, then it start spilling into surrounding streets, and then the armed forces had to be called in to set up makeshift hospitals.
If a hospital is saturated then by definition no more people can further enter the hospital.
There's a physical limit to how many people can fit inside a hospital, and that limit is the saturation point, at least in my definition.
It's possible that a mildly sick patient became a moderately sick patient because they received some disease while within the premises that they otherwise wouldn't have.
And in an extreme scenario, hospitals could possibly kick out moderately sick patients to accommodate even more severely sick patients, which could cause the former to spread diseases to otherwise healthy people. But this seems highly likely.
None of the makeshift military hospitals were actually used in NYC. They were only set up in the interest of preparedness, but they did not end up being necessary.
That's a general trend. Obviously it's not going to apply to every case. Usually, reducing mortality is about improving healthcare and nutrition, especially during the period your study tracked (1990-2014). Keeping working age people healthy is obviously going to increase their productivity. This is very different from shutting down an entire city due to a few dozen Covid cases.
While it is true that no _entire country_ has GDP increase for _sole goal_, it is often the main metric used for government driven economic and social policies, and more often than not, compared to concurrent and/or rival country GDPs, when applicable.
Trying to change that means going from a productivity driven economy to a social wellbeing driven economy (as per government economic policies).
That's quite a shift, in line with the idea of universal basic income.
> we end up with entire countries whose sole goal is to eternally increase their GDP
This is a pernicious straw-man. No county focuses only on GDP. No government focuses only on GDP.
Unemployment, interest rates, inflation, balance of payments, national debt etc, are all prominent indicators in any economy.
And show me a country that doesn’t also measure educational achievement, crime rates, divorce statistics, birth rates, suicides, alcohol consumption… the list is endless.
The only people who want an alternative to GDP are the ones who mistakenly think that the economy or society can be summed up in a single measure.
Part of the issue (at least in public discourse) seems to be the conflation of "revenue" in the narrow sense of being measured in money, with "utility" or "value" or "welfare" in the broad sense.
"We should not measure Economic Productivity" isn't a great start.
Increasing well-being is a laudable goal, but it's nebulous in concept and in specifics even more tricky. "Well being" belongs in the world of political or philisophical discourse, but as a basis for economic planning is probably not going to be useful.
But now that we mention politics, we already have proxies for measurement of well-being. In western democracies the people vote for the politicians (or policies) that they believe will increase their well-being. So the polls and vote tallies are one form of measurement. One of the government's roles, as policy maker, is to balance the needs of the people with the ability to provide those needs.
Only a minority of the people living in the US are registered to vote. An even smaller minority actually vote. A vanishingly smaller minority decides who is on the ballot via campaign contributions. Not sure voting results are a proxy of anything for the majority of people.
The first part of this just boils down to "it's hard" and the second is a pure fantasy description of how governments are maybe supposed to work but none ever has in precisely that way.
These are both useful lines of reasoning in some conquests but I don't find them so in this one.
Numerous studies have spent 10s of millions trying to determine which leadership style and which technology made workers more economically productive.
The result was always too many variables creating an impenetrable mess of logic with no practical value. The research was almost unproductive economic activity except it made the researchers realize we are terrible at macro level measure of anything but movement of literal things.
Inferring numbers today from past economic truth is not intelligent guidance but biasing inequality into the system from past imperialism. A whole lot of our rich would not be without our government meddling. What I don’t need is government pissing off the world to normalize business conditions for aristocrats who don’t do real work of keeping themselves alive.
-National income and national happiness are different, but are positively correlated
-Average levels of happiness have been rising internationally for decades, with the notable exception of the united states
-While economic inequality has been rising in countries like the US, happiness inequality has been falling. From a happiness perspective, our lives are less unequal than they were decades ago.
The most interesting Insight from the US data is that happiness is very poorly tied to how much people actually have, and more tied to perceptions of where they stand relative to others.
It is like the classic experiment of a monkey being outraged when given less treats than another monkey, despite having more treats than they otherwise would have.
I think it is tied to the expectation of fairness and the perception of fairness.
If you expect to get the same bonus, and you perceive you were slighted, you will probably be unhappy.
Perspective plays a huge part.
That's not to say people don't have valid grievances, but there is a huge amount of cognitive dissonance, and large gaps between expectations and reality.
Take the parent example of US inequality. Low earners are unhappy that they make so much less than US high earners. Well that's unfair! However, they certainly don't gain much comfort by being a high earner globally. That's not unfair, that is deserved!
Our perception of fairness is parochial, so it's biased against the outgroup, but it works very well within the ingroup. But in- and outgroup are not rigidly defined and can be changed. If you maximize the size of the ingroup, there's nothing wrong with innate farness.
I do strongly agree that we should be clear that we care about GDP because it lets us buy more quality of life (in many cases, literally more life), and if GDP diverged from providing that we should stop caring about GDP
I’m not sure I buy that the right metric is hedonic well-being though; the issues with Mills’ Hedonic Utilitarianism are well-known, and I don’t want to prescribe heroin or wireheading for everyone to maximize their subjective happiness. I think some metric of Eudaimonic Utility is probably more what we want.
What are the factors of human flourishing? How do we measure and improve those? Things like health, education (in the broadest sense including trades/crafts), economic security/opportunity, physical safety, community, etc.
One can easily imagine higher-GDP configurations that trample most of the populace on the above, and we should not choose those merely because “growth is good”.
It seems fundamental to the human condition that working on something (whether mastering the creation of artistic work, building businesses, becoming an amazing teacher, literally any productive use of time) is what drives true happiness. Once a society largely moves beyond Maslow's hierarchy, the ability to productively work on something of your choosing, whether as your main job or as a hobby/side gig is what brings passion and meaning to life.
Being paid in some way for this work is one way for people to support the creator/teacher/builder. This will add to economic activity and continue to grow the economic pie.
No one looks back on their life and wishes they spent more time laying on the couch.
So while economic productivity/growth is a crude measure for sure, it might be the best one we've found so far.
> No one looks back on their life and wishes they spent more time laying on the couch.
Clearly true. Now, how many people look back on their life and wish they had spent more time building their business rather than spending time with family, friends, etc?
Even more fundamental to the human condition is our social nature. Living a life that prioritizes that is what drives true happiness.
> Now, how many people look back on their life and wish they had spent more time building their business rather than spending time with family, friends, etc?
I do. Most of the "social time" has been wasted: some projects I did each bring me more lasting happiness that even all the time spent with family and friends put together.
I'm not sure it's ever appropriate to speculate on what elements of life drive happiness for other people.
Everything everyone does is by definition in pursuit of satisfying some internal motivation, and it doesn't seem reasonable to me to second-guess other people's choices for the purpose of optimizing their happiness against external criteria -- only for the purpose of preventing externalities that harm our own pursuit of happiness.
Attempting to create macro-scale metrics that attempt to approximate the optimality of of individuals' subjective experience, rather than measuring objective consequences of their manifest behavior -- like their actual economic activity -- seems both too abstract to be useful and too susceptible to manipulation by those with ulterior motives.
So I agree that economic productivity is the best measure, but for quite different reasons.
> working on something... is what drives true happiness
Couldn't disagree more. The most joyous time in the past few years has been when I took half a year off work and pretty much spent it playing video games or hanging out with my wife.
In fact the joyous times in my life have been when I have no responsibilities and can just get drunk with my friends. Unfortunately the best way to meet good, fun people is to be involved with some kind of productive activity, but as we get older none of us have time for each other anyway.
I hate responsibility and I somewhat hate being productive because once other people see you're capable, they start expecting more of you, and that's the last thing I want
I know of many people who wish they spent more time laying on the couch. I think you're making the mistake of assuming that your personal / bubble / society cultural preferences are universal.
We should stop failing to measure economic productivity, but instead of switching to failing to measure well-being we should just stop fetishizing the idea of measuring macroeconomic or sociological phenomena.
The economic metric treadmill looks something like "we want to measure 'economic productivity', which is a term that has a colloquial meaning". Second, create a formal definition that almost, but not quite, matches the colloquial meaning. Third, try to measure it in the past using available proxy metrics. Fourth, try to measure it in the present using new proxy metrics. Fifth, try to measure it in the future by introducing new measurements.
The sixth and most complex phase is to stitch together all those measurements as though they are measuring the same thing, and then via sleight of hand to use the colloquial meaning of the name of the metric to derive some sort of conclusion.
Now we get to play the game of repeating steps 3, 4, and 5 in order to draw interesting and new conclusions, and best of all, to try to guide policy decisions to increase "economic productivity" by instead guiding policy decisions to increase the metric for "economic productivity", yielding results that are invariably nonsensical.
Once you see this pattern it becomes impossible to not see it everywhere in econometric research. Even things like "GDP" or "DJIA" are insanely stitched-together pseudo-metrics that we just pretend are actually measuring something but are completely disconnected from reality because of their use in policy-making.
I suspect one of the main things you'd figure out is that wealthy people are inefficiently turning their wealth into well being. I know some people with generational wealth who don't seem to be significantly more happy than your average Joe. OTOH there's also going to be a lot of poor people that we can justify in not helping as they are already happier than you'd think from a consumption point of view. Indeed people I know at the bottom of the income scale don't seem to be any different in terms of perceived well being.
There's been some research I've heard of in the area about people who won the lottery or have some life altering accident, somehow nothing changes how happy they are in the long run. Wonder if the evidence still supports that.
It makes sense that when you take consumption into overdrive, you don't gain much happiness. You can pay a 1000$ for a meal, but it won't taste a 100 times better than my 10$ meal.
You can build a house with 20 bedrooms but you can still only sleep in one, and you've just created a new problem to manage: cleaning all of them.
You can buy a 1$ million car but it's not a 100 times more comfortable or faster, nor does it do anything in a traffic jam. It'll bore you after 2 weeks as it becomes the new normal.
Great article, lots of food for thought. The only thing that seems to be left out is agricultural productivity, which is fairly closely related to ecological productivity.
Economics would be a more reliable field if it incorporated the work of people like the founder of ecological studies, G. Evelyn Hutchinson:
Interesting idea but I am very skeptical that you could collect enough data on people to tease out how much their new toaster or app is contributing to their well-being.
Self selection and lack of random controls will always thwart such an effort.
It is still an interesting concept philosophically, and worthy of consideration.
I'm not too sure where the line is between a well being catalysis metric and old fashioned utils.
It is well understood that people can over or under pay for the utility of their purchases.
That's what the current Mexican president says but it's a really a way to dismiss the economic disasters of his government.
There's really no happiness without fulfilling basic human needs like health, education, security, etc. That cannot be achieved without a healthy economy.
It's very easy for someone living in a "first world" country to take fundamental stuff for granted. I know I did before moving from Europe to Mexico years ago.
Bhutan is a country that does improve on well-being. They measure Gross National Happiness (GNH). That should give a first approximation of the potential of that idea.
This is dumb. We measure productivity because that’s what the people with the power to choose the important metrics care about. There’s no “we” that gets to choose anything! They don’t care about your wellbeing and would happily make you eat bugs if it meant their favourite numbers would go in the right direction.
Except for arbitrary cultural conditioning, there’s really nothing wrong with eating bugs. People who live in the forest eat bugs all the time. At industrial scale I could well believe that bugs would be a better food source than some of our current staples, and if bugs were cheaply available and other foods had all of their external costs priced in, I could imagine substantial numbers of city dwellers choosing to eat bugs. (Which is not to say that anyone should be forced to eat any particular food.)
I disagree here. I think this change is necessary for society to evolve. Society is not a static thing and just because things have been done a certain way, doesn't mean it is right. My suspicion is we are doing many things wrong, electricity hasn't even been invented for much more than 100 years, yet we organize ourselves in a similar way as we have been for millennia. If we do need to change, then what? Well-being may be a great measure, in fact I think it may be the only measure. There are many concerns like gaming, lying, or corruption. But I think with the challenges can be minimized; why? Well induction, if we had this current economic system with all it's faults work, then why can't well-being be another metric? Moreover, I think this is exactly the step we need to make because part of the reason this earth is dying is because humans have prioritized materialistic exploitation. We need to move on from those notions, and if well-being is the new metric, then that sounds great to me.
Hey, bug eating can be fun from a well-being perspective too. Some utilitarians will make you eat bugs of it meant their favourite numbers (yes, your well-being is a number) would go in the right direction. But it probably isn't, maybe a vegan diet is what the utilitarians recommend.
You know, it’s getting to the point where any spiel, headline, whatever with ‘should’ in it I’ll automatically ignore, as it’s almost always impractical for a number of reasons which they always gloss over.
‘We get X if we measure Y with Z side-effects’ however? I can only get so excited.
The biggest miss is the majority of people would be a lot happier if they didn’t have to work to be able to do the things they enjoy but could just do the things they enjoy.
The idea of measuring well-being comes at least in part from the work of the economist Amartya Sen, whose most famous work is his book Development As Freedom.
Sen's work, in turn, has its philosophical ground in the work of Martha Nussbaum on "capability based ethics".
The capabilities approach, by keeping things local, tries to avoid requiring that different cultures all have the same values as tends to happen with utilitarian approaches and materialism.
Upvote because Martha Nussbaum is IMHO the #1 living philosopher working toward real-world real-life improvements for billions of people. Her work on capability ethics helps guide entire countries in their policies, and helps guide the United Nations as well.
Here is her list of the ten most-important capabilities and a brief description of each:
If you ever become so powerful that you can dictate what the gov of a 350 mln nation should do, you'll find it difficult to constrain yourself with a made up metric that you "can't fernangle with".
The happiest people I've seeen are the ones with the biggest families. Lots of siblings, cousins, aunties & uncles and of course grand children. Perhaps this is the best measure for how successful a country is.
Oh man, that's so true. And a universal definition of "well-being" is super easy. It's just like, things that are good you know? Not bad things but good things. A new society is possible.
Just to be clear, we need to measure inflation, and therefore, by accident, we end up measuring productivity. Here is a simplified example:
The nominal money GDP increases by 6%
Population increases by 1.5%
That leaves 4.5% that is either inflation or productivity. If we determine that inflation was 3% then we know that productivity grew by 1.5%. We don't necessarily aim to measure productivity (I mean, we do, but even if we did not) we would still end up with a productivity number, once we had subtracted out population growth and inflation.
Think of the economy as a machine that needs to keep going. It doesn't really care about what keeps it going for as long as it keeps going. In fact, it doesn't even care about the production of value either.
You'll see this in consumption culture, specifically of non-essentials. Consumption for the sake of consumption, fueled by non-stop marketing. Going into a mall and buying lots of useless shit. Or the online version of it.
You'll also see it in work culture. It is of absolute vital importance that you have a job, but absolutely nobody cares about whether its adds value.
The only requirement is that money changes hands, irrespective of "value" or "well-being". Somebody once said that roughly 50% of our economy is effectively just keeping each other busy.
Isn't it highly suspicious how decades of improvements in economic productivity have always converted to "more stuff" but not once have improved work conditions? Say, shorter work days/weeks? That would do a lot for "well-being" but is obviously not the point of our economy.
There isn't really a point other than to keep it going. If there's no point, no metric makes sense.
The issue with GDP-replacements is that GDP is a good proxy for many things, not just one. GDP / capita is a proxy for well being. GDP is a proxy for how credit worthy a country is. It's good proxy for how well a country could wage war if they switched to war economy. It's proxy for how much slack there is in the system that could be used to deal with bad times.
We have a tendency to use indicators irresponsibly. Economic productivity measures can be useful for understanding specific circumstances, like the output of an industrial sector. The broader and more abstract we extend them, the more unmoored it's meaning.
This is also true if we'll being measures, probably.
Below a graph showing 2% growth year over year: "The lack of exponential increase in labor productivity is sometimes used as an argument that tech innovation has slowed down in recent decades..."
Steady two-percent growth is exponential growth. The "exponent" is 1.02.
> The point is not that these measures give us a perfect way to measure human well-being, but rather that they give us a decent stab at it, which is definitely worth taking.
The old motte-and-bailey tactic, nice!
If he thinks productivity metrics are "voodoo", wait til he learns more about those measurements of happiness and well-being. It hurts that we don't have a good way to measure well-being rigorously and consistently, but given that we do not it seems like step one should be to get to the point where we can do that, and only then should we consider whether we should replace existing measurements and paradigms with it.
The Human Development Index is another measure that was developed as a result of similar reasoning back in the 90's, specially accounting for such development in the third world.
Using any sort of aggregate metric is probably a bad idea, as you're losing too much information to generate useful results. It's a better idea to identify particular deficiencies in economic production, such as poor appliance lifespan or lack of suitable housing, and assign specialised teams to address those deficiencies, with a central committee coordinating between those teams.
The premise is that we don't do measures of well-being but there doesn't seem to be anything to back this up in the article? There are well known measures like the HDI, various life satisfaction components in gallups, OECD better life index etc.
It seems to me a better policy argument would be emphasize these over productivity, or maybe propose to improve the measures in some way if warranted.
Measuring possible benefits seems like a good idea. Well being turns out to be complex with multiple factors. For example, happiness itself is rather shallow. Satisfaction is related but less fickle and may be more closely related to what people think of as well being. Having a bunch of such related metrics would allow comparison that could lead to optimization or risk reduction.
I wouldn't say that "Measuring Economic Productivity Is Pretty Much Bullshit" as the author says. Measuring economic productivity is fine, as long as that isn't your end-all, be-all. I certainly think that how we measure GDP should be radically changed and economic productivity should be a SMALL piece of GDP, but not the entire damn thing.
4 sections on how it's tricky to measure economic productivity.
One tiny section on how easy it would be to run an economy wide correlational well being study with product use, whole ignoring the multitude of problems with that. The biggest one being correlational data is mostly trash.
It's funny, I commented about this a few months back saying happiness is a better indicator than GDP and people were so offended by the mere suggestion.
Edit:
Clearly no one is offended, hyperbole is a lost art form, and happiness is at all-time highs judging by the responses I got.
I don't think there's an argument for what you were saying. If you disagree, feel free to justify. You keep replying, so I'm curious as to where you want to go with this.
This is what is being measured. It is the "real" progress happening in the economy. There's no circular logic, you can measure multiple things at once.
Why do people always leave out the time preference in these analyses? It is soo important, especially in countries with non uniform (age-wise) demographies. It‘s easy to completely discount the future and and spend all you‘re resources to be happy short term
it's interesting seeing our intentional or subconscious goal of "dominating" nature disconnect us further from the planetary systems that we are a part of. The economy and money was invented by us. Putting the economy's well-being in front of the human's or the earth's was very plainly a mistake.
This assumes a utopia where all humans are friendly and all countries are at peace. Well-being is great but economic and capital is what gives you power and security. It gives you technology, defense, and weapons. In other words, when your economic power declines, it gives hostile foreign nations with more money (power) to dominate or invade you.
It's not at all at country scale though. Who in Russia wants to attack Ukraine and isn't an oligarch seeking to exploit the people living there (or mentally ill)?
This site would not be the same without a daily dose of uninformed commentary on economics! In this case from a guy who (with a straight face?!?) says “…as The Singularity approaches” ! Wow.
Productivity measurement is hard. The author points to many of the difficulties. We (economists) have been aware of many of these difficulties since the 1930’s or earlier.
No one in this literature thinks “hedonic adjustments get it exactly right!” to take just one example. Instead they think more along the lines of: this is the best solution we can come up with to this very hard problem.
For an informed, recent survey of the difficulties and the importance of getting these questions right, try Syversen and De Loecker’s survey “an industrial organization perspective on productivity” from the recent Handbook of Industrial Organization, available for free via the NBER working paper series.
Why might you care? Here is one fact from that survey: within a narrowly defined industry category, the difference in measured output from the 5th to the 95th percentiles of the productivity distribution can be a factor of 2! To emphasize: two firms with the same measured inputs, but one produces twice as much output than the other. This is visible across many industry categories. It’s a fascinating problem and well worthy of study.
The original author should probably also read “the sad truth about happiness scales” from the Journal of Political Economy in 2019. Such scales are unidentified in quite a fundamental way and the results they give are essentially meaningless.
> Why might you care? Here is one fact from that survey: within a narrowly defined industry category, the difference in measured output from the 5th to the 95th percentiles of the productivity distribution can be a factor of 2! To emphasize: two firms with the same measured inputs, but one produces twice as much output than the other. This is visible across many industry categories. It’s a fascinating problem and well worthy of study.
Having seen inside a few organizations of various types, I am shocked that the difference is so small.
I bet computing 1st to 99th %-ile would be even worse. Also I believe the result they cite is on average. I bet the extremes of the 5-95 comparison can get crazy.
Find the “right” industry and I bet you can make it really horrible.
You are misunderstanding something. The comparison they are reporting is a comparison between the 5th and 95th percentiles of the empirical distribution of measured productivities. The normal distribution has nothing to do with this.
Also, I wish the author would read any of the work by Mumford regarding technics. Or Ivan Illich wrt the over adoption of specific technologies. Many of the issues I think affecting firms wrt productivity declines vs the lack of well being of employees is something we can probably measure reliably, it's probably more that firms and their shareholders don't really care that their employees are basically burning out faster than their demands on ROI and productivity.
The problem I have with economists is that they pour their effort into what is trackable after waving away the softer stuff.
What does it rhyme with?
- Companies that pour their effort into fine tuning their websites and adverts based off of what their analytics tells them. Years later their product dies and nobody really says why. [Narrator: All the best designers and developers left as the product and company slowly turned soulless.]
- City planners that make deals with builders for suburban housing which increases the tax base. Decades later they're stuck dealing with the outsized infrastructure maintenance costs for things like sewer lines without the proper density to afford them.
- Prisons, schools, and hospitals get mandates from the state to include a fruit with every breakfast. Individually packaged jam fits the poorly written bill, so that's what we all get.
And on and on.
The point is, there are things we need to do and problems we need to address that are frustratingly hard to define and agree upon, but the answer is not to wave them away. The answer is the opposite. To head right into them and try to really make a difference without getting lazy.
I could, easily, in an afternoon mention dozens of quantifiable proxies for different aspects of a good life. I'm very sure that countries with the technical prowess of Apple and Tesla are capable of achieving better instruments of our collective wellbeing.
What we need are economists with courage and resolve. There is obviously something horrible going on across the world right now even if GDP keeps growing.
> The original author should probably also read “the sad truth about happiness scales” from the Journal of Political Economy in 2019. Such scales are unidentified in quite a fundamental way and the results they give are essentially meaningless.
Yeah. If we're failing at measuring productivity, are we going to succeed at accurately measuring well-being? Not likely.
Perhaps, accepting the imperfections it is better to try to optimise for happiness, even if the optimisation can only be judged as to whether they're generally heading in the right direction ... perhaps if imperfect measures of happiness are improving then life improves for the many in a way that doesn't improve by measures which reflect mainly financial aspects of society.
You can make a rich person 100 times richer and overall prosperity is probably decreasing. But you can't really make someone 100x happier (especial if there already relatively happy), all that money maybe made the rich person 1.0001x happier (or even <1x). Seems like given this sort of difference in happiness and financial wealth measuring the latter has a built in aspect of relative equality. For those who care about creating societies that benefit the whole population, this is an enticing possibility.
Better to optimize for happiness? Sure, I can go there.
But the title emphasizes measuring happiness, while pointing out that our measurement of productivity is flawed. But measuring happiness/well-being is going to be far more flawed.
The case for optimizing for happiness and well-being does not depend on our being able to measure it more accurately.
People don't want to be happy or well. They want to hoard wealth and hate their fellow man. This is the sad truth that western democratic capitalism reveals :(
Building and maintaining social connections is very important.
Exercise and healthy diet are very important.
Personally helping others is very rewarding.
Comparing yourself to others is very detrimental.
Fixating on things and people you dislike is very detrimental.
Most of these are things that people are told as a child and struggle to do. Most of them you can't buy, outsource, or regulate.
My personal axe I like grinding is TV. The average American watches 20+ hours of TV a week. On average, I don't think it helps their long term happiness and I don't think it is restful.
I think most people would be happier if they literally stared at a wall or slept instead, let alone if they did some of the things I listed above.
The biggest reason it's difficult to measure productivity is because the corporate incentive structure is not based around producing profit; it's based around generating gross revenue to justify over-inflated WS estimates of value so C-suit executives can sell their quarterly share distributions at higher prices than the quarter before.
Well-being is probably a third-order effect from a strong economy, good healthcare / social care, culture and a variety of other factors. But because it is a third-order it is very hard to measure the impact of policy, because:
* They are 'arms length' from policy changes.
* The indexes are slow to respond to changes.
* They are noisy and affected by unrelated factors (i.e. does a colder winter decrease happiness?)
* A policy which improves well-being today could very well decrease well-being far into the future (e.g. increasing a countries spending and decreasing tax).