Happiness is so complex and often difficult to define. The topic of happiness has been popular and widespread among philosophers and psychologists for a long time, and now the perspectives of happiness developed within these disciplines are finding their way into the modern economic landscape. In recent times, economic growth has been the metric that governments and organisations have used to measure happiness. However using a metric like GDP, which is quantitative in nature, is incomplete and potentially harmful. GDP only measures a partial amount of economic activity and increases the risk for inequality. People don’t like inequality, and there is a body of research to suggest that people are most unhappy when there is a lack of trust and fairness. This essay provides evidence to support the claim that using GDP as a metric to measure happiness is insufficient, and why using equality as a measure for happiness is better.
GDP as a measure for happiness is insufficient, as it measures only partial economic activities.The World Happiness Report (2019) suggests that a much broader approach is required, with little evidence to support the correlation between GDP and happiness.According to Gianneti et al. (2015), GDP fails to consider all non-monetary production, such as childcare, volunteerism and work done from home. GDP also fails to consider other determinants of well-being and happiness, such as economic security, social relations, personal safety, health and the longevity of people within a nation (Anheier and Stares, 2002).
Reports from Diener and Tay, (2013) also posit that while GDP does predict life evaluations of the people within a nation, it does not predict people’s positive feelings, which is a significant component of subjective well-being. In addition, the measure of GDP considers every expenditure as positive, failing to discriminate between welfare-enhancing activity and welfare-reducing economic activity. An example of this can be found in three countries with high recent growth rates in GDP – China and Chile.GDP per capita income has doubled in the last ten years and 18 years for China and Chile, respectively. Nevertheless, both nations report declining levels of life satisfaction (Easterlin et al., 2010).
Further research suggests that over the long term, happiness does not increase as a nation’s GDP rises (Easterlin et al., 2010).According to Kahneman and Deaton, (2010), although less money is associated with emotional pain, more money does not necessarily buy more happiness. To be precise, $75,000 is the threshold beyond which any further increase in an individual’s income makes no difference to their levels of happiness (Kahneman and Deaton, 2010). Expanding on that point with recent psychological data obtained using priming methods provides evidence suggesting that those who earn higher incomes have a reduced ability to appreciate small pleasures, enjoy time with their families and enjoy leisure activities (Quoidbach et al., 2008). Overall, the use of GDP as a measure for happiness is flawed, as its measure fails to consider a whole litany of other elements that make up a healthy functioning economy and contribute towards many unfavourable outcomes within and between nations.
GDP as a measure for happiness is insufficient because it contributes to many adverse outcomes within a nation. While GDP measures growth, it ignores all of the environmental costs associated with the depletion of natural resources. GDP disregards long term negative consequences for short term gain, exploiting both ecosystems and ecosystem services in the name of financial prosperity. Aiming for higher rates of GDP as a metric for happiness is counter-productive, as its costs to individuals and their environment outweigh the gains realised regarding happiness levels. GDP fails to consider critical aspects of quality of life, and it also triggers activities that are a detriment to long-term well-being. Research indicates that the desire for higher GDP is inconsistent with what it means to be happy (Barker and Martin, 2012).
Barker & Martin, (2012) suggest that the desire for more material status has been shown to foster selfishness, violence and inequality, all of which goes against the definition of what it means to be happy. Concerning social comparisons, which are found to play a role in unhappiness, plus the rise of the global economy, studies suggest that people are now comparing themselves against a global standard of income in which the wealthiest countries set the standard (Beccetti et al., 2010). So, even if GDP were to rise in a particular country, it does guarantee that the nation’s happiness levels will rise with it, as there will always be another country to compare to who is wealthier and has better standards of material living.
Economic growth has the potential to raise levels of happiness, however, it is hardly ever distributed evenly across people of a nation. Rather, it is usually concentrated within a small portion of the population. A major issue with GDP is that it fails to consider income distribution among individuals, sometimes leading to more inequality. Wilkinson and Pickett (2009) state that since the 1980s, western governments have focused on pursuing economic growth. However, these rises in economic growth have been accompanied by rising levels of economic inequality.A report from Giannetti et al., (2015) posits that the growth in GDP of one nation has negative impacts on other nations at the expense of well-being to workers in less developed countries. The effects of inequality on an economy can be significant, impacting opportunity, social mobility, physical health and happiness (Oishi et al., 2011). This can sometimes hinder people’s ability to gain access to adequate health care, education and employment opportunities. This can have devastating outcomes on a societal level, particularly when it results in forms of poverty.
Oishi and Kesebir, (2015) found that the increase in GDP per capita aggravated the effects of income inequality, suggesting that growth in GDP and the adverse effects on inequality that come with it cancel out any positives it may bring to a nation. It seems as though using GDP as a measure for happiness levels can be useful in some respects, however, it has many limitations as stated above. There has been evidence provided to support the fact that economic growth has the potential to result in higher levels of inequality, which in turn impacts people’s levels of trust and security, thus having a negative impact on happiness levels.
There now exists a large body of empirical evidence to suggest that individuals dislike inequality (Ramos, 2014). According to Ramos, (2014), people dislike inequality because they perceive it as a threat, as exposure to inequality can make them feel pessimistic about their prospects. Of course, there is an element of self-interest here. According to Frey et al., (2004), people derive a sense of satisfaction from the process of fairness. It is suggested that the lack of equality poses a considerable threat to happiness levels (Wilkinson and Pickett, 2009). It has been found that some of the negatives that result include added levels of stress, anxiety and insecurity among people, which negatively impacts happiness and health levels. (Daly et al., 1998). In Western society, there is evidence to suggest that inequality, which is usually measured using the Gini coefficient, has a negative coefficient with self-reported levels of happiness (Ramos, 2014).
Morawetz et al., (1977) compared two small Israeli communities that were almost identical in all aspects except for income distribution and found that the individuals who lived in an equal society reported higher happiness levels than the less egalitarian community. In addition, a study that was conducted across 34 nations found that the percentage of respondents who reported being ‘very happy’ was inversely correlated with income inequality. Every time income inequality increased, the number of respondents who reported feeling ‘very happy’ went down (Oishi and Kesebir, 2015). Inequality has been found to undermine social cohesion, hinders the production of social capital and leads to social degeneration (Gallo and Matthew, 2003). When there is a lack of cohesion among a society, unhappiness begins to spread regardless of status or wealth.
Cooper et al., (2014) mention the “pure income” effect, whereby inequality negatively impacts peoples levels of happiness, regardless of where they fall on the income scale compared to others within their society. This is demonstrated by looking at the United States of America, in which a 37-year long study found that people in the nation were less happy on average during those years when inequality was at its highest (Oishi et al., 2011). The authors of this study concluded that inequality decreased the level of perceived fairness and trust among its people, which in turn, negatively impacted levels of happiness. It is evident that happiness is undermined when there is a lack of equality, and perhaps taking a quantitative approach to the matter of happiness that economic growth seeks to achieve will not suffice. It is clear that a better approach to happiness is required, one that is more qualitative in nature.
A more qualitative approach can be taken through the lens of equality. Given the social nature of human beings, it is clear that it is not wealth that is valued the most, but how that wealth is distributed for better cohesion and collaboration as a society. From a psychological perspective, happiness is consistent with positive personal relationships, expressing gratitude, being optimistic, and social cohesion, none of which relate to material status. Humans are social animals who operate in extremely complex social systems that thrive when there is cohesion and collaborations. The data mentioned above highlights how people are largely concerned with perceived fairness and trust in their authorities and institutions, that they will deliver what is best in order for people to flourish.
In the field of psychology, it was the humanist perspective that took rise during the mid-20th century that focused on the health and development of individuals. It emphasises the strength and importance of empathy and good-natured behaviour. In the political landscape, the humanist perspective takes an approach that encourages human rights and equality.It is clear that equality is a sufficient measure for happiness, as it considers matters that are qualitative in nature, such as the positive emotional states that arise when a system fosters trust, cohesion and empathy – all factors that derive from human rights and equality among people.
When there is equality, more people are able to flourish. According to positive psychology, human flourishing is an integral part of happiness and well-being. In a book titled, ‘Flourish’, by Seligman, (2011), it is posited that the main objective in positive psychology is to build human flourishing. According to Crespo and Mesurado, (2014), ‘eudaimonia’, which is a concept from Aristotelian literature translates to ‘human flourishing. Both of these perspectives advocate for justice, social responsibility, teamwork, fairness, virtuous leadership and a strong sense of community. Based on these notions, in order to achieve ‘eudaimonia’, or flourishing, an egalitarian regime that deploys systems that create and sustain governments and organisations that promote family values, adequate access to health and education, and the avoidance of unemployment is required; all of which encompass what it means to live in a society that is equal and fair.
The topic of happiness has been of widespread interest to philosophers, theologians, psychologists and even economists who have long sought to define it. Beyond the most obvious of characteristics being that of a positive mood, the true definition of happiness encompasses something much more significant, including life satisfaction, life evaluation and the sense of meaning and contentment one derives from their lives. This pursuit of happiness is universal to people of all nations, being more desirable than acquiring wealth and material possessions. After all, the pursuit of wealth and material goods are just a means to the end goal of attaining pleasure and satisfaction – two essential components of happiness. Suppose happiness is the ultimate objective for all of humanity. In that case, it is imperative to consider the measures used to interpret happiness levels, particularly in the scope of economics.
While economic prosperity can affect happiness levels to a certain degree, using this measure alone is incomplete and potentially harmful. For this reason, GDP as a measure for happiness has come under considerable scrutiny in recent times, as it fails to consider many other attributes of the economic activity of a nation that contribute to levels of happiness, and fosters negative activity. There is a strong correlation between happiness and in/equality. A better approach to measuring happiness can be found through the lens of equality, as it promotes social cohesion, community and harmony – all essential ingredients for true human well-being.
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