One irritating feature of the subjective well-being research is its preoccupation with GDP, or rather its preoccupation with what it thinks is our preoccupation with measuring production. It’s there again in the new economic foundation‘s recent National Accounts of Well-Being: Bringing real wealth onto the balance sheet.
The proposition that GDP cannot be used as an all-purpose proxy for societal well-being is a banality, not a critique. Nobody who believes that it is such a proxy is cited in this publication, and for good reason: nobody of any intellectual or political signficance (and quite possibly nobody at all) believes this to be the case. It is one of a vast number of statistical series collected and used in policy. Government policy is more likely to reduce than increase GDP through regulation and taxation steering resources away from their most productive uses.
The main point of National Accounts is to call for more regular collection of statistics on well-being, broadly defined. They’ve made a start with (in conjuction with Cambridge University) an interesting survey taking a multi-faceted look at well-being around Europe.
But it is not clear why an attack on GDP needs to be part of this argument. On their own account (p.40), it correlates reasonably well with observed differences in well-being between countries. And GDP growth is critical to keeping down one of the main causes of negative well-being, unemployment. This year is going to be a brutal reminder that while more money doesn’t necessarily make people much happier, involuntary loss of an income almost invariably makes them much less happy than they were before.
While I would like to see the nef survey results continue to be published, I very much doubt that they will be, as nef claims, useful to policymakers.
As the report notes, for life satisfaction there is significant stability over time – indeed, this is probably the most stable set of numbers in the history of social science. That self-reported well-being has fluctuated in a narrow range without clear trend for 60 years, despite massive changes in social circumstances over that same time period, should be a warning that what policymakers do really doesn’t have a huge impact on this measure.
Indeed, the familiar argument that higher GDP has failed to increase average happiness can be turned against every other trend and change: the welfare state has not made us happier, new technology has not made us happier, feminism has not made us happier (it hasn’t even made women happier), more education has not made us happier, the sexual revolution has not made us happier. Et cetera, et cetera.
Once various basics of prosperity and social order are in place, well-being levels are primarily due to personal characteristics and behaviours that are very hard for policymakers to get at such as personality, socialising, friendship, and love. No amount of policy effort is likely to make more than the most marginal difference to these things. Frustrating as it must be to believers in big government, some of the most important things in life we just have to do ourselves.