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A happier world
An article from The Guardian, written by Dr Mark Williamson, director of Action for Happiness.
A historic event took place just before Easter, the first ever United Nations conference on happiness with more than 600 delegates including leaders and representatives from nations around the world.
This was the first major step forward in a process which began last summer, when the resolution Happiness: towards a holistic approach to development was unanimously adopted by the UN General Assembly. Taking the lead was Bhutan, the tiny Himalayan kingdom which famously measures its success in terms of “Gross National Happiness” (GNH).
The basic idea is that human progress is about more than just growing the economy. When we measure how well our societies are doing, this should focus on people’s overall quality of life, not just their standard of living. Economic growth can of course be beneficial, for example by lifting people out of poverty; but it can also come with unwanted side-effects, like increases in inequality, mental illness and environmental damage. The economy is a means to an end; the ultimate end is the happiness of the people.
This isn’t a new idea – in fact it dates back at least as far as the Enlightenment and arguably back to Aristotle. So as I walked in to the UN headquarters the big question in my mind was whether this event could lead to anything tangible. Could it be the trigger for a global shift in priorities, or would it be a talking shop with warm words but with no real traction?
In his opening address the Bhutanese prime minister, Jigmi Thinley, referred to a “deeply troubled” world, suggesting that we’d lost our way in our “obsession for creation of wealth at any cost”. He’s an inspiring and articulate man for whom happiness is intrinsically linked to sustainability and preserving the natural world. There are considerable differences between Bhutan and the developed nations, but their GNH concept has global relevance and the underlying methodology is solid. It’s based on 72 different indicators across nine domains, which include community vitality, time use and psychological wellbeing. There’s a lot we can learn.
UN Secretary General Ban Ki-moon was generous in his praise for Bhutan’s leadership. He talked of happiness as a fundamental human goal and universal aspiration, but cautioned that social, ecological and economic challenges have “made the achievement of happiness an unachievable goal for many”. We also heard from Laura Chinchilla, president of Costa Rica, who is rightfully proud of her country where very high levels of life satisfaction are achieved with a relatively small environmental footprint.
After more pleasantries from Australia, Finland, India, Israel, Japan, Morocco, Thailand and the UK, things finally stepped into gear when Jeff Sachs took the stage. The influential US economist is special advisor to Ban Ki-Moon and has recently become vocal in his support for the happiness agenda. “The US has had a three time increase of GNP per capita since 1960, but the happiness needle hasn’t budged” he noted. “Other countries have pursued other policies and achieved much greater gains of happiness, even at much lower levels of per capita income.”
Sachs went on to share the outcomes of a major workshop on Happiness he’d chaired at Columbia University the previous day. I’d been there too and watched with fascination as global experts debated the cutting edge of wellbeing research. Richard Davidson, a neuroscientist, had explained how happiness is a skill that can be learned; public policy expert Robert Putnam showed us the vital importance of social connections; economist Joseph Stiglitz highlighted the flaws with GDP; Buddhist monk Matthieu Ricard explained the reciprocal benefits of altruism; and Martin Seligman, founder of positive psychology, reminded us that there’s much more to a flourishing life than just the absence of misery.
These insights, and many more, formed part of the World Happiness Report, produced for the conference and edited by Sachs along with Canadian professor John Helliwell and British economist Richard Layard. To those who still question whether happiness can be measured in a meaningful way, the report answered with robust and conclusive evidence that it can. And although the findings aren’t necessarily a big surprise, they’re hugely important.
Helliwell explained that the world’s four happiest countries are all in northern Europe (average life satisfaction: 7.6/10) and the bottom four are all in Sub-Saharan Africa (average 3.4/10). Although higher incomes obviously contribute to this vast difference in quality of life, other factors – notably social connections and health – have a bigger impact. Freedom and absence of corruption matter too.
Layard presented the latest research on the causes of happiness and areas in which public policy can support wellbeing. He reminded us in particular of the vital importance of good mental health and the disabling effects of mental illness. It is truly shocking that in most advanced countries only a quarter of people with mental illness are in treatment, compared with well over three quarters for most physical conditions. This is one of the many areas where the state can play a vital role.
So where was all this heading? The main outcome from the event was a commitment to put happiness and wellbeing at the heart of global discussions of Sustainable Development at the major Rio+20 conference this June and beyond.
When the Millennium Development Goals are re-written as new Sustainable Development Goals in 2015, it now seems likely that wellbeing will join the list, alongside poverty reduction, universal primary education and other priorities.
Yet despite this growing momentum, the reality is that happiness remains very far from the top of the agenda for most world leaders. Right now they’re much more focused on kick-starting faltering economies and cutting public sector deficits. If this movement is to genuinely create a new paradigm for economic and social process, it has to use language that resonates with the powers that be. At the moment there’s a real risk of this being portrayed as “anti-growth” and ignored. That would be a mistake.
Like it or not, the notion of growth is deeply entrenched in our psyche; it represents our intrinsic human need to strive, innovate and improve our lot. We need to be redefining our notion of growth, not calling for an end to human ingenuity. Instead of pursuing economic growth we should be aiming for growth in happiness and wellbeing. A vibrant economy is a vital contributor to this but, as the World Happiness Report showed conclusively, other factors play a big role too.
The best way to win round remaining sceptics will be to explain the significant benefits that research has shown come with increases in wellbeing. We learnt that happiness – as well as being a fundamental human goal – also contributes to greater productivity, better health, faster recovery from adversity, less risky lifestyle choices and more pro-social behaviour. These are all highly appealing “spillover benefits” for political leaders.
Proponents of sustainability would be wise to embrace this new focus on wellbeing too, for it brings something crucial that the environmental movement has long been lacking: a positive and hopeful vision. An economy focused on wellbeing will be inherently more sustainable and ecologically sound, but instead of calling for hair-shirt lifestyles, it comes with an aspirational vision of a better future. Curbing our excess consumption is no longer driven by a moralising demand to save the planet, but by a recognition that it doesn’t actually contribute to the growth in wellbeing that everyone wants.
But perhaps the most significant development of all is the fact that Jeff Sachs has jumped wholeheartedly on the happiness bandwagon. This is quite a transition for a man that was once a key supporter of economic “shock therapy” for unleashing capitalism in post-communist states. As one of last week’s workshop participants noted, the “Sachs effect” can be profound in terms of getting an idea to take hold. He, more than anyone, can now help ensure wellbeing becomes part of the global Sustainable Development Goals. This will be a big step forward in galvanising support for measuring what really matters and creating a happier world.
Information as food: JP Rangaswami
If information is food we need to enjoy different subjects!
The economy in haiku
austerity (Photo credit: 401K)
A selection of haikus extracted from The Economist.
Tax the Rich and Now
Borrow to Invest in Stuff
Bring Back the New Deal
Boost U.S. Demand
Need More Money and Tax Cuts
Hands off the long run
Climate change question
Cap-and-trade or carbon tax
Either efficient
Employment down, output up
Doing more with less
Until everything is done by no one
jobs and Jobs are gone
need more Jobs to get more jobs
innovate to grow
Jobs are needed now
Austerity ill-timed
Action is required
Monetary stimulus is all that’s left
Do it right or suffer
Target NGDP to end the quest
More demand is needed
The Fed is responsible
Do not look elsewhere
More public spending
Is needed to fill the gap
Sadly America fails
The US needs jobs
Politicians have theirs now
With which they do little
Those kids blame the banks.
Is Wall Street pre-occupied?
Next: capital strike.
Uncertainty rules
While the economy suffers
Politics rejoices
When Japan fell in 1990s
They were lectured by the world economists
Time for Japanese to smile
The Spanish Trap: Paul Krugman
Spain (Photo credit: NASA Goddard Photo and Video)
(Article from post-gazette.com) The best thing about the Irish right now is that there are so few of them. By itself, Ireland can’t do all that much damage to Europe’s prospects. The same can be said of Greece and of Portugal, which is widely regarded as the next potential domino.
But then there’s Spain. The others are tapas; Spain is the main course.
What’s striking about Spain, from an American perspective, is how much its economic story resembles our own.
Like America, Spain experienced a huge property bubble, accompanied by a huge rise in private-sector debt. Like America, Spain fell into recession when that bubble burst, and has experienced a surge in unemployment. And like America, Spain has seen its budget deficit balloon thanks to plunging revenues and recession-related costs.
But unlike America, Spain is on the edge of a debt crisis. The U.S. government is having no trouble financing its deficit, with interest rates on long-term federal debt under 3 percent. Spain, by contrast, has seen its borrowing cost shoot up in recent weeks, reflecting growing fears of a possible future default.
Why is Spain in so much trouble? In a word, it’s the euro.
Spain was among the most enthusiastic adopters of the euro back in 1999, when the currency was introduced. And for a while things seemed to go swimmingly: European funds poured into Spain, powering private-sector spending, and the Spanish economy experienced rapid growth.
Through the good years, by the way, the Spanish government appeared to be a model of both fiscal and financial responsibility: unlike Greece, it ran budget surpluses, and unlike Ireland, it tried hard (though with only partial success) to regulate its banks. At the end of 2007 Spain’s public debt, as a share of the economy, was only about half as high as Germany’s, and even now its banks are in nowhere near as bad shape as Ireland’s.
But problems were developing under the surface. During the boom, prices and wages rose more rapidly in Spain than in the rest of Europe, helping to feed a large trade deficit. And when the bubble burst, Spanish industry was left with costs that made it uncompetitive with other nations.
Now what? If Spain still had its own currency, like the United States — or like Britain, which shares some of the same characteristics — it could have let that currency fall, making its industry competitive again. But with Spain on the euro, that option isn’t available. Instead, Spain must achieve “internal devaluation”: it must cut wages and prices until its costs are back in line with its neighbors.
Internal devaluation is an ugly affair. For one thing, it’s slow: It normally takes years of high unemployment to push wages down. Beyond that, falling wages mean falling incomes, while debt stays the same. So internal devaluation worsens the private sector’s debt problems.
What all this means for Spain is very poor economic prospects over the next few years. America’s recovery has been disappointing, especially in terms of jobs — but at least we’ve seen some growth, with real GDP more or less back to its pre-crisis peak, and we can reasonably expect future growth to help bring our deficit under control. Spain, on the other hand, hasn’t recovered at all. And the lack of recovery translates into fears about Spain’s fiscal future.
Should Spain try to break out of this trap by leaving the euro, and re-establishing its own currency? Will it?
The answer to both questions is, probably not. Spain would be better off now if it had never adopted the euro — but trying to leave would create a huge banking crisis, as depositors raced to move their money elsewhere. Unless there’s a catastrophic bank crisis anyway — which seems plausible for Greece and increasingly possible in Ireland, but unlikely though not impossible for Spain — it’s hard to see any Spanish government taking the risk of “de-euroizing.”
So Spain is in effect a prisoner of the euro, leaving it with no good options.
The good news about America is that we aren’t in that kind of trap: We still have our own currency, with all the flexibility that implies. By the way, so does Britain, whose deficits and debt are comparable to Spain’s, but which investors don’t see as a default risk.
The bad news about America is that a powerful political faction is trying to shackle the Federal Reserve, in effect removing the one big advantage we have over the suffering Spaniards. Republican attacks on the Fed — demands that it stop trying to promote economic recovery and focus instead on keeping the dollar strong and fighting the imaginary risks of inflation — amount to a demand that we voluntarily put ourselves in the Spanish prison.
Let’s hope the Fed doesn’t listen. Things in America are bad, but they could be much worse. And if the hard-money faction gets its way, they will be.
