Wellbeing – Richard Layard

Economic growth has become a prominent source of public scepticism, making us return to theories from economists such as Richard Layard. The focus on making money, he contends, results in harsher social comparisons and is ultimately the cause of societies’ unhappiness. Developed societies may have better cars, houses, and lifestyles, but Layard questions whether citizens are any happier then they were fifty years ago. Is economic growth, therefore, really what parties ought to be focusing on? Will improvements in the economy really make society happier? Despite some efforts to alleviate the effects of the recession through policies aimed to eradicate inequalities in health, education and society, it is becoming apparent that governments tend to engage in areas of economic growth that further their power. With attention focused on sustaining social meritocracy, individualism is rampant, and the underlying structures of inequality are ignored. By focusing on economic growth, we have forgotten a value once inherent in society: happiness starts from the home, community, family and friends.

Layard looks into the social factors shaping happiness via the integration of research from sociology, economics, philosophy and neuroscience. He concentrates on the common good, with each person counting equally in measuring the average happiness of a society. He argues that unless you are poverty stricken, money will not make you happy. Nevertheless, we find our government drumming into our heads that the more we spend the more fulfilled we will be. What is more, the higher our economic growth rate, the more superior our country becomes. Layard trounces this claim of economics to guide policy for a good society and uses engaging statistics from the ‘new science’ to prove his argument. He passionately pushes the idea that economic desire will not enrich our lives in any way. The example of Indonesia is used to back up his argument as the population is as happy as richer nations. Westerners despite earning more money are no happier than they were 50 years ago.

Layard analyses this ‘happiness paradox’ by examining the relationship between national income and national happiness. He proposes that individuals can never truly be happy when they compare their happiness to what others have, and thus neglect what really makes them happy. Western culture has made people accustomed to use their time to make money to buy products that serve only short-term happiness and purpose. He summarises by claiming that both adaptations and social comparisons offset the gain that income might make in first world countries.

Conventionally, politicians and economists have worked with the intention of increasing the rates of economic growth. Yes: this may increase consumption, improve public services and reduce unemployment and poverty. But nothing outshines the simultaneous increase in inequality and crime, as well as the narrow lifestyle focus on work and money – values now taking precedence over family and community living.  Regardless of how many skilled, well-paid jobs are created not everyone can climb the meritocratic ladder.  And it is this social positioning that determines happiness. Marmot has even found a direct correlation between hierarchical positioning and mortality rates.

Layard’s theory of happiness as he focuses on the common good rather than rampant individualism, is enhanced by progressive economic growth. Parties have spent considerable time looking into ways to strengthen our economy to maintain certain degrees of happiness. It provides society with nicer cars, nicer houses, and a better standard of living. Although what Layard states is that economic policy guiding our society forward, results to the absence of areas such as community, family, and friends. It is this that has in turn caused greater unhappiness as it pushes for longer working hours, and shorter holidays that consequently encourages this obsession with rampant individualism to grow. As people become more individual, Layard talks of harsher social comparisons being made. People compare upwards as well as downwards.  Inequality widens as more focus is placed on economic growth. The poor are forced to work to try and survive while the rich become more ‘rampant’ as Layard would say. The benefits of economic policy thus only seem to benefit the middle and upper classes, and with Layard suggesting that the correlation between national income and national happiness highlights no real increase in happiness; governments should focus on distributing taxes to make more of an equal society. This will surely determine greater happiness as there will also be fewer harsher social comparisons.

In my view there are two adages, one is you cannot keep all the people happy all the time; the other is that ignorance is bliss. So does Richard Layard’s book tell us anything new? Whilst Layard has tried to address the theory of happiness, there is a distinct feeling that all he has done is revisit what we already know. However he does use intensive theory and research to break down the theory of happiness into the areas of lifestyle, money and social position. With regards to money he makes the point that whilst we are happy at work and happy with what we do, if we subsequently discover that the fellow worker next door is doing the same job but is paid more then this makes us unhappy. This reaffirms the ‘ignorance is bliss’ theory, but fails to ascertain why.

However, he then goes on to say that we are not unhappy if say, a film star earned millions, because he or she is outside our direct social contact or sphere of reference. I think this is flawed because it does not take into account media input. Recent years have highlighted footballers, say, earning huge amounts of money, which via the media has caused public resentment and thus unhappiness; people are only happy if other people’s wages are justified for the work they do.This media intrusion which I feel Layard does not cover can be extended to other areas of his definition of the search of happiness. Surely, the obsession with reality stars such as Jordan affects people’s happiness, because it puts them in an unrealistic category which they cannot reach, and therefore creates disillusionment, upset, and therefore unhappiness. This can also be extended to social position and visual material assets which is only evident in high media coverage areas. So if you take the Peruvian Indian who has no electricity, no television, no newspaper or glossy magazines then the ‘ignorance is bliss’ theory, which Layard does not seem to pursue, stands up.

Layard does however extensively define social and monetary comparisons, as he suggests ignoring ‘comparisons with people who are more successful than you are: always compare downwards, not upwards’. In reality this teaching has always existed from the spiritual traditions such as Buddhism but what we now have is media intervention trying to tell you what someone else thinks will make you happy. Even to the extent of New Labour reinventing spin to try and create a society/belief that does not exist to try and make people feel better which in turn leads to happiness.

So how do governments try and create happiness?  In answering this, Layard takes inspiration from Jeremy Bentham’s work which provides an excellent basis for the happiness theory. Bentham believes that the objective of an individual is to be happy and that we want more material goods to make us happier. Similarly, Layard believes that a society should govern with the intent of an individual’s happiness not just the perceived interest of a community. Layard rightfully feels that this is where the problems lie within public policy in so much as it fails to meet the needs of individual happiness and instead concentrates on driving forward economic interest.

The mental oblivion of politicians who push for increased economic activity fails to acknowledge the negative consequences in other areas. This focus on policy seeks to encourage more working hours and shorter holidays. According to Layard, this diminishes the chances of individuals being positioned in the 7 predominant categories that connect with happiness. These are personal values, health, family relationships, financial situation, work, personal freedoms and community/friends that have more of an impact on a person than income. The Equality Trust believe that the outcome of social and health problems are far worse in an unequal society, then remedies of higher minimum wages, more generous pensions and greater distribution in taxes and benefits should eradicate the depression and unfairness that economic policy brings about. Therefore did Bentham get it right all these years ago, that the overall happiness of a community does not actually result in individual happiness?

People have become too obsessed in dwelling over their losses instead of focusing on their gains. Within the world of business this idea of ‘rampant individualism’ has become incorporated into our lifestyles that so many businesses encourage. We are witnessing a hectic and egoistic lifestyle that has caused great influence on all areas of society. Inherent in economic policies are these principles in order to create an individual and unique country. But instead we see it destroying the happiness that was anticipated from an increase in material living standards. In Layard’s vision, policies should be based on virtues such as equality, fairness, and trust, which are more important than generating income. If anxiety and need can be socially constructed, then why can’t society’s agencies manufacture happiness? Therefore, politicians should focus on relieving misery which will have a stronger impact in determining happiness.

Governments in power should focus not on economic growth alone. This only provides superficial and short-term happiness. The solution lies within resolving problems of inequality by effective tax distribution, as well as eradicating segregation in schooling and health. This, not economic growth, is what will create greater societal happiness.

This review by Madeline Cooper, to whom we are very grateful.