By James Kwak
A few days ago I wrote a post addressing Mike Konczal’s question of whether behavioral economics, as a whole, weakens the case for the welfare state or, more generally, for activist liberal policies. I said the answer was “no.” But I think positive psychology—otherwise known as happiness research—presents a more difficult question.
I’ve only consumed popular versions of happiness research, such as The Happiness Hypothesis, by Jonathan Haidt, but basically the story is something like this. For much of its history, psychology had a pathological bent: it was concerned with figuring out why people had psychological problems and how to cure those problems. (Whether it had any success whatsoever is a question for another day and another blog.) A few decades ago, however, some psychologists decided they would try to figure out what makes people happy, and they started a wave of happiness studies that continues today. In many of these studies, people are pinged at random times and asked to rate how happy they are at that moment. Then treatments are introduced so you can measure the difference in happiness between the treatment and control groups. For example, if people find a quarter in a pay phone,* afterward they will report they are happier than people who didn’t find the quarter; not only does this effect persist for a surprisingly long time (into the next day, I think), but also affects people’s reported happiness about unrelated parts of their life, like their family life.
Happiness research is vaguely related to behavioral economics research in that both show that people can be easily tricked, but it has a different emphasis. Happiness research is in a sense less threatening to traditional microeconomics, because it is about figuring out how to measure utility. In economics, money has always been just a proxy for utility. The idea is that people maximize utility under constraints; since we can’t measure utility, we assume that they maximize money under constraints.
Well, we still can’t measure utility directly, but we know some things that make people happy: Short commutes. Predictability. Control over the environment (random noises are bad). Eating, but only until satiation. Sex, but only until satiation. Money—but only to a point; once your basic needs are met and you don’t face constant insecurity, more money no longer buys you more happiness. Participation in social groups. Marriage, usually. (Children, not so much.) Being appreciated by your boss. Generosity toward other people—even if the generosity is not observed by anyone. Work that is challenging but not overwhelmingly so. Physical contact with other people. And finding quarters in pay phones.** (This is a partial list based on my current recollections of things I read at various points in the past, so it may not be perfectly accurate. But you get the idea.)
Now, understanding these things can be very important for your personal well-being. For example, it implies that you should choose a short commute over a higher-paying job (for some range of commuting and salary differentials).
But what does this mean for public policy? It still means we should be ensuring a minimum standard of welfare for everyone, since uncertainty about obtaining the basic necessities of life is a major source of unhappiness.
But you can also draw some conservative implications from the research. For one thing, a central principle of the research is adaptation: people tend to adapt to the situation they’re in. Once you have the basic necessities, if your income goes up, you quickly adapt to it, so the added income doesn’t make you happier. If you make a big purchase, most of your happiness is consumed in anticipating it; by the time you actually get it, you’ve already adapted to having it. In other words, most economic changes in your life aren’t going to have much lasting impact on your happiness—not as much as, say, going to church every week. And the implication of adaptation is that you should try to be satisfied with what you have, because having more of it isn’t going to make you any happier.
Another possible implication is that, if we want to promote happiness, government should encourage the formation and strengthening of community organizations. While this may not necessarily sound conservative today, the conception of society as composed of tightly knit local groups was historically a conservative one, while the progressive movement (formerly known as the workers’ movement) was framed much more in classically economic terms: getting people more money for fewer hours of work. And today, the strongest community organizations are churches. Again, churches are not inherently liberal or conservative, but the idea that people should seek fulfillment in their church community rather than by improving their economic station has a conservative tinge to it.
As you can tell, this isn’t a black-and-white issue, and breaks differently in different contexts. But I personally have had some second thoughts when reconciling my belief in the importance of happiness with my general support for traditionally progressive policies. And I think the general question is certainly worth thinking about: If we believe in maximizing happiness as we understand it today, what kind of public policies does that entail?
* Pay phones, for the kids out there, were fixed-line telephones that were installed in public places (train stations, street corners, etc.). To use such a phone, you had to put money in it, hence the name. They have mainly been rendered obsolete by the rise of mobile phones.
** There is one huge caveat to this list. These are factors that contribute to happiness in the moment, which is what is primarily measured by studies that ask people how happy they are right now (and measure the effect of treatments administered in the last few hours or days). Daniel Kahneman has a brilliant TED Talk making the point that there are two different kinds of happiness: happiness in the moment and satisfaction with your remembered life.