Happiness is no laughing matter. The economic stakes are much too high – but increased economic productivity is more likely to be the result than the cause of happiness.
The disconnect between wealth and happiness was shown in the 1970s by the economist Richard Easterlin. He demonstrated that despite a steadily growing American economy since World War Two, average levels of happiness were little changed.
The same point was made in a different way in 2004 by the psychologist Barry Schwartz, who introduced the concept of the “paradox of choice.” This states that greater levels of choice in, for example, consumer goods leave us less, not more, happy. A huge array of consumer goods gives us too much information to process and too much mental work to do. “I only wanted a pair of shoes …” .
The argument is extended to other areas of life. Many people in developed countries have far greater levels of choice over all aspects of their lives than previous generations. Yet, somehow, happiness for many of us seems to be elsewhere.
As the World Happiness Report shows, material well-being, beyond a certain threshold, has little impact on our happiness. The top seven countries are not the richest in terms of GDP, but are very closely clustered in geographical terms: Finland, Denmark, Switzerland, Iceland, Norway, the Netherlands and Sweden. These countries share high levels of social protection, confirming that it’s essential to have a social safety net if anxiety is to be reduced.
All of them also benefit from high levels of trust in national institutions: this confidence is much weaker or absent in the countries at the bottom of the table. That might suggest that happiness can be managed on a top-down basis: in 2016, the United Arab Emirates even set up a Ministry of Happiness.
The daily grind together
Rather like material wealth, we need institutions to function well to reduce our fears about the future. But that is still not enough to make us happy. Intuitively speaking, happiness grows from the bottom up, rather than the top down.
The World Happiness Report found that levels of trust in institutions and social connections between them explain 60% of the happiness gap between the Nordic countries and the rest of Europe. The report was published in March, and so the world’s experience of COVID-19 is largely uncaptured. It may be years before the impact of the pandemic on our levels of happiness is fully understood. But experiences of lockdown have underlined the importance of social contact.
The report’s research found that unpleasant activities such as commuting, queuing or waiting to see the doctor, which usually worsen our mood when done alone, are in fact transformed into net positives if done with someone else. These are measures of mood at a given moment in time, rather than of our overall sense of happiness with our lives. Yet these are routine tasks which most of us have to do often. They are not going to go away. Mood has a cumulative influence on happiness: if we are regularly in a bad mood, it is unlikely that we will be happy.
For many, the dangers of social isolation have increased as a result of the pandemic. We are all in a position to do something about it that could usefully focus on ways to invest in happiness by allowing people more flexible time that can be spent with others. Parental leave for men who become fathers is slowly becoming the norm rather than the exception, and organisations which grant it are much more likely to retain valued employees. Much more can be done to raise happiness and long-term productivity for all of us.
