This comports pretty well with my general understanding of self-reported happiness studies and gives me a chance to print my second favorite graph in the history of economics:
(This particular one is in the UK, but you can find versions of it for the US, or Europe, or pretty much any industrialized country.)
I like this graph because it makes me teeter on the edge of nihilism. If all that growth isn't making anyone happier, what's the point? Why compete for jobs and material rewards at all?
On the other hand, a few points keep me from falling over the edge. They are:
1. This apparent stagnation in happiness only holds for countries that have passed some GDP per-capita threshold. People in the US are not any happier today than they were 40 years ago. But impoverished people in sub-saharan Africa are not happy. Indeed, being dirt poor does not generally make people happy. So, to the extent our growth can help lift some people above the GDP threshold, you might say we have some moral obligation to keep growing.
2. It's unclear what would happen to the self-reported happiness line if the growth line in the graph above were flat. Maybe we need to maintain some minimum level of growth just to keep happiness constant. (On the other hand, growth rates do very between industrialized countries today -- say, between the US and Europe -- and there does not seem to be much variation in happiness.)
3. Maybe we should reject the whole utilitarian calculus and say that growth matters for moral reasons. (I believe Benjamin Friedman makes this argument.) The argument runs like this: There might be some disagreement about the direction of causality, but it's clear that there's an empirical link between growth and democracy. We like democracy for moral reasons. (Pace, Bryan Caplan.) So maybe we shouldn't mess with democracy by abandoning growth.
4. You could say we're just programmed by evolution to do things that create growth. Human nature limits the realm of the possible. Maybe fighting the impulse to compete for jobs and invent new technologies and grow the capital stock is a little like fighting the impulse of jealousy or the fear of heights. Easier said than done.
5. You could question the entire notion of "self-reported happiness." Perhaps these things just depend on the level of generality at which one asks the question. If I were to report my happiness now, I bet it would look pretty much the same as it did three years ago. But if you were to ask me a question like, "Isn't your life better now that you have an iPhone?" I would probably say, "A thousand times yes!"
So which response is right?
I like this graph because it makes me teeter on the edge of nihilism. If all that growth isn't making anyone happier, what's the point? Why compete for jobs and material rewards at all?
On the other hand, a few points keep me from falling over the edge. They are:
1. This apparent stagnation in happiness only holds for countries that have passed some GDP per-capita threshold. People in the US are not any happier today than they were 40 years ago. But impoverished people in sub-saharan Africa are not happy. Indeed, being dirt poor does not generally make people happy. So, to the extent our growth can help lift some people above the GDP threshold, you might say we have some moral obligation to keep growing.
2. It's unclear what would happen to the self-reported happiness line if the growth line in the graph above were flat. Maybe we need to maintain some minimum level of growth just to keep happiness constant. (On the other hand, growth rates do very between industrialized countries today -- say, between the US and Europe -- and there does not seem to be much variation in happiness.)
3. Maybe we should reject the whole utilitarian calculus and say that growth matters for moral reasons. (I believe Benjamin Friedman makes this argument.) The argument runs like this: There might be some disagreement about the direction of causality, but it's clear that there's an empirical link between growth and democracy. We like democracy for moral reasons. (Pace, Bryan Caplan.) So maybe we shouldn't mess with democracy by abandoning growth.
4. You could say we're just programmed by evolution to do things that create growth. Human nature limits the realm of the possible. Maybe fighting the impulse to compete for jobs and invent new technologies and grow the capital stock is a little like fighting the impulse of jealousy or the fear of heights. Easier said than done.
5. You could question the entire notion of "self-reported happiness." Perhaps these things just depend on the level of generality at which one asks the question. If I were to report my happiness now, I bet it would look pretty much the same as it did three years ago. But if you were to ask me a question like, "Isn't your life better now that you have an iPhone?" I would probably say, "A thousand times yes!"
So which response is right?
So what's your first favorite graph, Conor?
http://www.google.com/books?id=uHWj6wy36oEC&printsec=frontcover&dq=a+farewell+to+alms#PPA2,M1
Also, I guess I don't find the graph surprising at all for reasons that have nothing to do with economics and everything to do with psychology.
There's a great little book called "Stumbling on Happiness" by David Gilbert, a Harvard shrink, that talks about our "emotional thermostat" -- that is, the ability of non-depressed people to achieve an incredibly consistent equilibrium of satisfaction no matter what their life circumstances are. Gilbert cites a popular study about the effect of losing a limb, or losing the ability to walk, that concluded that such traumatic injuries had, somewhat incredibly, NO longterm effect on the vast majority of their happiness. Quadriplegics and the non-handicapped: just as happy, it turns out.
So Conor, you could have attached a graph that plotted, somewhat crudely, self-reported number of limbs vs. self-reported levels of happiness and it would have looked the exact same! As the number of human limbs increased, the level of satisfaction would have stayed the same. That doesn't mean we should get all nihilistic and say, "Well, what's the point of legs?" And I don't think that such a graph should make people rethink their decision not to cut off their arms. It just means that long-term happiness is extremely inelastic.
That's reassuring. Why don't we start calling this economy what it really is then? "Recession, Depression" I like opera as well as the next person but, really, Friedman's book would have been so much calmer as 'The Causes of the Great Negative Growth.'
I vote for #5 kind of. I forgot who said it, but people always think everything is getting worse, even though its always getting better.
If the survey asked: Would you be happier with less longevity and access to comforting medicines; more dangerous, smelly boring work; worse opportunities, health, education for one's children (a big component of happiness); fewer gadgets; fewer entertainment and conciousness expanding sources? Then you'd get more "No, I'm more happy" answers, I think.
Or put another way, Baba, growth may eliminate background causes of unhappiness, but this is not the same as generating genuine happiness. Rarely, for example, do we think about the absence of illness in one of our average days. And yet that absence allows us to live a much fuller and more pleasant day.