Sunday, January 22, 2012

The Pursuit of Happiness: An Economy of Well-Being / Carol Graham -- Washington, D.C.: Brookings Institution, 2011

Economists have been measuring the gross national product and gross domestic product since the middle of the 20th century. These measures often are thought to indicate the "health" of the economy and moreover the aggregate well-being of the nation's people; however, almost as often, these conclusions have been challenged. In a speech on March 18, 1968, Robert Kennedy, now famously said that the gross national product
counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts...the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.
It is surprising, then, that it was only in the last 10-20 years that economists have begun seriously studying an alternative to GNP as a measure of social well-being. In The Pursuit of Happiness, Carol Graham reviews much of this literature and poses important questions as to how and whether happiness research can inform policy debates.

In the second chapter, Graham recognizes the difficulty we face in defining happiness. A number of similar concepts cloud the issue: well-being, satisfaction, contentment, and pleasures of various sorts are among many such concepts, and measuring them involves measuring a number of different factors: health, family, friendships, security, income, freedom, education, expectations, etc. Any of these factors can be complicated by temporary changes in a person's life circumstance. Furthermore, Graham plausibly asserts that individuals have different baseline dispositions toward happiness.

Graham distinguishes two significant forms of happiness recognized in the recent economics literature, hedonism and eudaimonism, roughly labeling them Benthamite and Aristotelian respectively. Labeling the former Benthamite is apt. It refers to simple pleasure or hedonic utility. The latter, while not completely mis-attributed to Aristotle, misses an important aspect of Aristotle's view of happiness. Graham first describes eudaimonia as related to "meaning" or "life evaluation," applying the cooncept to people who establish long-term plans and take steps to complete those plans. A critical component of this is "agency," or the ability to determine the outcome of one's life plans. As the work proceeds, agency becomes the tail which wags the dog in Graham's "Aristotelianism."

Certainly, Aristotle's notion of happiness involves agency. For Aristotle, a happy person is someone who exercises the uniquely human capacity of reason to shape the whole of his or her life; however, Graham's Aristotelian happiness underplays the importance of makarios, i.e., divine, or god-given happiness. Moreover, the etymology of eudaimonia combines the Greek words for "good" and "in dwelling spirit" -- a being halfway between the gods and humans (from which we get our word demon). For Aristotle, happiness, while it certainly is something we work to create by exercising our uniquely human reason, it is also something that happens to us; it is god-given or is a product of being possessed by a good demon. Furthermore, the highest happiness for a person is something that can be measured only after one's full life has been lived and one's posthumous reputation has been assessed. This is certainly a minor academic objection, but overlooking (or underplaying) Aristotle's concept of happiness in its fullness will lead the economics of happiness to policy agendas that overemphasize the autonomy of individuals and underemphasize true human needs.

To better understand policy goal options, one should distinguish three forms of happiness, Benthamite hedonism, Graham's Aristotelian eudaimonism (which might simply be called "liberty"), and the more fully Aristotelian happiness of a good life. Graham's review of happiness surveys makes reasonably clear that Benthamite hedonism is not an adequate policy goal. Our overall happiness requires more than obtaining day-to-day pleasures. By and large, we also require accomplishments that we can trace to our own choices and actions; consequently, we require the social conditions which are conducive to the exercise of our capacity to chose and pursue our own conception of a good life. We require, in the terminology of John Rawls, basic liberties; however, it is doubtful that this will be enough to promote happiness in its fullest sense.

Graham's title The Pursuit of Happiness comes, of course, from the American Declaration of Independence, indicating Carol's bias in favor of a liberal state -- one which is concerned with creating opportunities for happiness where the individual is at liberty to pursue whatever reasonable lifestyle he or she chooses as opposed to a state that seeks to equalize the outcome of the distribution of benefits and burdens. Such a liberal state is clearly an advance over an autocratic state which narrows the life choices of its citizens for the benefit of a ruling minority, but allowing over-wide latitude in life choices has three significant drawbacks. It may allow self-destructive natural temptations to compromise true human needs, it does not recognize the inability of citizens to be fully informed about the consequences of their choices, and it can result in what could be called happiness market failures.

Proper policy decisions might require a recognition that some conceptions of a good life might be objectively preferable to others and that our natures, circumstances, and rational individual actions may sometimes lead us away from the objective good. The remedy would seem paternalistic to the libertarian (or even to the classical liberal), but a way of life endorsed by state policy need not be particularly limiting and it could be justified by appealing to deep psychological and biological needs. Even John Rawls, for example, recognizes that his liberal principles of justice are only apropos to a society that has reached a certain level of development, but the question that Aristotle's view of happiness raises is whether a more communitarian society should be the object of public policy.

My own preferences would be largely to follow Rawls, and protect liberty and equal opportunity before establishing policies that would maximize basic goods for the least well off. As I argued in my dissertation, this alone will result in a fairly thorough-going egalitarianism. Still, I'm not entirely convinced that placing boundaries on the range of permissible conceptions of the good is only relevant for societies in deep poverty or to exclude unreasonable conceptions of the good. The Kantian notion of true human needs obviously applies to conditions of dire poverty, but I'm not entirely certain that it does not reach further into the lives of people who on first glance have all that they need. This is not to suggest that I am especially concerned about what Graham calls the plight of "frustrated achievers" or the "miserable millionaire." As far as I'm concerned, the misery of the millionaire is his or her own damn fault.

According to the happiness literature cited by Graham, an egalitarian society is more conducive to happiness than a society characterized by vast disparities of wealth and I would add that the egalitarian society more effectively respects the full dignity of persons. A truly happy society must provide for equality of opportunity, and mitigate tendencies toward unequal outcomes; but assuming these conditions, a deeper understanding of human nature and the nature of happiness might restrict conceptions of the good life beyond what would be chosen by people without full information, by people without a superhuman ability to withstand temptation, and by people who are not so selfless as to voluntarily accept limitation to avoid happiness market failures. Broadly expressed, an egalitarian society that ensures equality of opportunity may still need a degree of communitarian organization to respect the contours of human nature.

The third chapter of The Pursuit of Happiness is essentially a literature review of happiness economics. Its organization is somewhat confusing and it presents the findings without assessing the validity of the studies. Of course, to do so would have significantly enlarged the book, but at 164 pages (including notes and index), adding a bit more about the validity of the studies would have helped. Hopefully, Graham has carefully examined the studies and is only including those that are most reliable. In any case, one should be extremely cautious about accepting the conclusion of happiness surveys due to the complexity of the concept. Time and again, one is led to wonder if one or another confounding factor is really responsible for results attributed to the independent variable. Even more often, correlations are observed that may be merely a coincidental product of a large data set.

The fourth chapter is entitled, "Adaptation and Other Puzzles." Here Graham demonstrates a good understanding of the concerns that I have raised in this review. Graham understands, perhaps was well as anyone, the difficulties facing happiness economics.

The final chapter describes the how we might incorporate a "gross national happiness" measure into existing social and economic measures to provide a better understanding of the lives of people for making policy decisions. As difficult as measuring happiness is, a "GNH" measure would certainly be worthwhile, if only to de-thrown unlimited economic growth from our policy objectives.

Overall, The Pursuit of Happiness is a valuable contribution to an emerging field within economics. It will probably not become seminal, but hopefully it will prompt further discussion of its important topics.


  1. Excellent point about Aristotle, whose idea of happiness comprised so much more than autonomy. I like your phrase “happiness market failures,” too. It brings home the truth that having and making choices may be necessary but is certainly not sufficient for happiness.

    There is another economic measure I have read about, the name of which escapes me at the moment. It measures goods like civic engagement, public spaces, clean air, clean water, and the score goes down for pollution, crime, etc. In other words, the sad economic transactions Robert Kennedy referred to are not counted as adding to national life.

    Michael Sandel is coming to Traverse City this year. I’m looking forward to the event. Too many nonphilosophers have never even heard the term ‘communitarianism’ and would probably think—well, you can guess what they would think. The debate on the good life definitely needs to be widened. Thanks for your contribution, Alan.

  2. Graham wonders whether the current interest in quality of life indexes are a passing fad. Hopefully, it isn't. Two things that stood out for me in the researh that Graham cites are that increases in material wealth increases happiness, but only to a point. After that, it isn't really a factor in promoting happiness. Second, a person's happiness tends to start out high and decline toward middle age, then increase as we get older. I'm happy to say I'm on the upward side of the slope!

    One caveat just to be on the record: when I advocate prioritizing liberty and opportunity of maximizing the well-being of the least well-off, I'm not including property rights in the means of production as a basic liberty.

    Enjoy Sandel's visit.