Monday, July 06, 2009

The pursuit of happiness

Via my friend Kalsoom I found that a group called the New Economics Foundation have released a new report on the state of global happiness. Entitled The Happy Planet Index 2.0 the publication purports to "[measure] what truly matters to us -- our well-being in terms of long, happy and meaningful lives -- and what matters to the planet -- our rate of resource consumption."

The happiness index is calculated using the following formula:

Essentially you ask people how happy they are, multiply that by their life expectancy and divide by their carbon footprint. The result is a ranking that basically rewards people for being poor, since the less money you have the less you are able to consume. Here is the top 35:

If you're curious about the United States we're at #114 behind Congo and Madagascar (which had a coup earlier this year) and just ahead of Nigeria.

Let's take a brief look at a few of the the top 35 countries. Number 3 Jamaica is one of the most violent countries in the world which, along with its poverty, has resulted in hundreds of thousands of its citizens seeking a better life in other countries. Number 7 Cuba, meanwhile, is a country that people literally risk their lives (or imprisonment) to escape. Millions of citizens of #23 Mexico have sought a better life on this side of the border in the allegedly unhappy United States while women in #13 Saudi Arabia are essentially second class citizens.

I actually visited #10 Honduras earlier this year. They certainly get points for having a low carbon footprint:

The village in which this picture was taken had no running water or electricity. Chickens and children roamed freely and people seemed to live a subsistence lifestyle. It's a way of life that the authors of the report, who likely live in London, are probably not terribly keen on for themselves. The glorification of poverty is contemptible, particularly when it comes from those in the developed world that don't have to suffer the same indignities as the poor.

Indeed, what really stands out in the rankings is that immigration flows are typically from the countries cited as the happiest to those ranked as the unhappiest. Are we really to believe that these people are engaged in the pursuit of unhappiness?

Also disturbing is this passage from the report's authors:
The current economic and ecological crises have discredited the dogmas of the last 30 years. The unwavering pursuit of economic growth - embodied in the overwhelming focus on Gross Domestic Product (GDP) - has left over a billion people in poverty, and has not notably improved the well-being of those who were already rich, nor even provided us with economic stability. Instead it has brought us straight to the cliff edge of rapidly diminishing natural resources and unpredictable climate change.
There are a number of misconceptions and distortions here worth addressing. First, the statement that a focus on GDP has left people in poverty is absurd. What the report's authors either forget or ignore is that poverty is the default state of mankind. For the vast majority of human existence people have languished in poverty. That over a billion people live in poverty occurs despite, not because of, the focus on economic growth. Indeed, the story of global poverty over the past 50 years has been its dramatic decline as free market policies have become more widespread. Where such poverty still persists is because of a lack of focus on GDP with policies that retard instead of promote economic growth.

The claim that natural resources are diminishing in any appreciable way is belied by their prices. As something diminishes the price of it tends to increase, just as increased supply tends to make things cheaper. So how has the price of natural resources changed over time? If we look at the five resources that composed the famous Simon-Ehrlich wager we see the following:

While fluctuations occur, the overall trend is unmistakably downward.

Lastly let's discuss the problem of economic stability cited by the authors. In some ways, yes, the modern economy has lacked stability, with the gyrations of the stock market and other economic indicators certainly having an impact on people's lives. But what is this being compared to? Poor, low carbon footprint lifestyles also features economic instability, which on a personal level is often more dramatic than in more developed societies.

In Honduras I was in a village that was next to a river (the main transport artery in the region). A couple of years ago the river overflowed and many people had their homes washed away. That's certainly rather unstable. Or imagine that you drink some contaminated water -- that any Brita would have filtered out -- and then can't tend your field for a week because of illness, that's another form of economic instability. Which is more difficult to stomach, this or a drop in your 401k?

Being poor is not virtuous and certainly nothing to celebrate. We should be seeking to promote economic growth around the world, not trying to create some false romanticization of poverty.


Kalsoom said...

On my own blog, I noted that whoever listed Saudi Arabia as #13 obviously neglected to poll the women.

I think the point of the study was not to quantify "happiness" but to figure out the correlation between resource consumption and well-being. Living in the US, there is a lot of waste of resources here that was sure to impact their ranking. I don't think it was meant to mean that the U.S. is less "happy" than Honduras or Congo (definitely not). However, does the index mean that Americans are leading less meaningful lives than someone in Jamaica? I'll leave that up for discussion.

Colin said...

Well, there is an obvious correlation between resource consumption and well being. If there wasn't we would stop working after attaining a minimum standard of living. Human desires, however, are quite insatiable. Also if the two weren't related then people wouldn't be moving from the high HPI countries to the low HPI countries.

Further, how does one assess what is a meaningful life? Seems to me that this is hard to do when your economic opportunities are limited.

Lastly, what resources in the US are wasted? Resources are only wasted if they are inefficiently allocated. However, I would argue that we are rich precisely because we allocated resources more efficiently than other countries, which implies there is little waste.