TCS Daily

The Happiness Police

By Arnold Kling - August 5, 2004 12:00 AM

"The evidence thus suggests that if income affects happiness, it is relative, not absolute, income that matters...In most cases, the person who stays at the office two hours longer each day to be able to afford a house in a better school district has no conscious intention to make it more difficult for others to achieve the same goal...Yet the ineluctable mathematical logic of musical chairs assures that only 10 percent of all children can occupy top-decile school seats, no matter how many hours their parents work."
-- Robert Frank, H. J. Louis Professor of Economics at the Johnson Graduate School of Management, Cornell University, How Not to Buy Happiness

Suppose that in order to try to illustrate his thesis, Professor Frank had used as an example a person who stays at the office two hours longer each day in order to pay for a tutor for a learning-disabled child. This example leaves us favorably disposed toward the parent, whereas Frank's example does not. Because Frank talks about educational opportunity as a relative concept, and above all because he talks about trying to get into the top decile, he is able to manipulate the reader into seeing the hypothetical parent's choice as a vain and futile quest. Thus, Frank is able to insinuate that working extra hours to try to pay for a better education for your child is pathological behavior.

To put it another way, if every parent were competing to give our children the best possible education, and that resulted in better education for everyone, that would seem rational and constructive. But in Robert Frank's morality play, the main characters are compulsively competing for the highest relative status, with no actual improvement in education. In an essay (based on a book) where he claims to be speaking from scientific authority, Frank stoops to proof by loaded example.

The Logic of Paternalism

The argument that Frank wants to make is this:

1. If we were rational, we would prefer to live in a society with fewer tangible goods but better intangibles, such as shorter commutes to work, more autonomy on the job, and less pollution.

2. However, we over-estimate the happiness that we will receive from tangible goods. Thus, we wind up living in a society with stressful commutes and insufficient resources devoted to having a cleaner environment.

3. This irrationality in our consumption choices is what explains the fact that "happiness research" shows that our happiness has failed to increase at the same pace as other economic measures, such as productivity or per capita income.

The conclusion implicit in this analysis is that government should step in and take away some our tangible goods in order to give us more of the intangibles. That way, instead of increased productivity feeling like a treadmill, we would have more happiness to show for our efforts.

A Heavy Intellectual Burden

In making his case, Frank places a heavy intellectual burden on "happiness research." As I have pointed out before, economists traditionally have not bothered to try and measure happiness. We take it for granted that people act in their best interests.

Frank, on the other hand, takes seriously the notion that happiness can be measured by surveys. He views the fact that surveys show little increase in happiness over the past few decades as evidence that higher incomes do not lead to more happiness.

Frank is fond of using thought experiments. I have one. Imagine that you could go back a few hundred years and ask people if they are "very happy," "fairly happy," or "not happy." Suppose that this survey showed that happiness was approximately the same back then as it is today. Would it be fair to conclude that the tangible goods that we have today contribute nothing to happiness? People a few hundred years ago had no idea what it was like to live with indoor plumbing, abundant food, and antibiotics. People today have no idea what it was like to live without them. How can a "happiness survey" provide a meaningful comparison of the two eras?

In Frank's view, what the surveys show is that consumers have been behaving myopically, striving for more tangible goods without increasing their happiness. An alternative hypothesis is that in answering the surveys the consumers are behaving myopically, reporting on their happiness relative to a near-term baseline. That is, when you ask a consumer in 2004 if she is happy, she instinctively makes a relative comparison to how she remembers 2003. If she could remember how she felt in 1974, and she were focused on that as a baseline, she might answer the question differently.

A Final Thought Experiment

Frank makes a strong claim that people cannot make a rational choice between tangible and intangible consumption, always choosing too much of the former. However, if this theory were correct, it would seem to me that it would lead to a convergence of lifestyles. Everyone would have a similar commute, a similar job, and an almost-identical collection of goods and services.

Instead, what I observe is greater lifestyle diversity. Compared with fifty years ago, there are more women who work outside the home, but many women choose to stay at home or work part time. Compared with fifty years ago, there are more people who retire in their fifties, but there are many people who work well into their seventies. There are affluent people living in parts of downtown Washington, DC that were slums several decades ago, and there are also affluent people living in rural areas 50 miles away. There are people who watch television whenever they are at home, and there are people who rarely watch it.

If anything, it is Robert Frank who wants to impose a rigid conformity on our mode of living. In his model society everyone would commute by mass transit to work. So much for people who like to work from home, or live in a rural environment, or walk to work.

I am afraid that "happiness research" amounts to nothing but a flimsy excuse for left-wing academics to claim that they should be given control over how the rest of us live.

Let me offer a final thought experiment. Suppose that you could choose to live either in our society with its current choice of lifestyles or in a society where "happiness police" tell you how many hours you can work, what kind of job you can have, and what kinds of goods and services you can buy. Which society would make you happier?


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