Happiness (and how to measure it) The Economist

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Affluence
Happiness (and how to measure it)
Dec 19th 2006
From The Economist print edition

Capitalism can make a society rich and keep it free. Don't ask it to make you happy as well

"Getty ImagesHAVING grown at an annual rate of 3.2% per head since 2000, the world economy is over half way towards notching up its best decade ever. If it keeps going at this clip, it will beat both the supposedly idyllic 1950s and the 1960s. Market capitalism, the engine that runs most of the world economy, seems to be doing its job well.



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As for capitalism's wasteful materialism, even Adam Smith had a problem with it. “How many people ruin themselves by laying out money on trinkets of frivolous utility?” he complained. It is hard to claim that pyramid-shaped tea-bags (developed at great expense over four years) have added much to the sum of human happiness. Yet if capitalism sometimes persuades people to buy stuff they only imagine they want, it also appeals to tastes and aptitudes they never knew they had. In the arts, this is called “originality” and is venerated. In commerce it is called “novelty” and too often dismissed. But without the urge for material improvement, people would still be wearing woollen underwear and holidaying in Bognor rather than Bhutan. Would that be so great?

The joys of niche capitalism
If growth of this kind does not make people happy, stagnation will hardly do the trick. Ossified societies guard positional goods more, not less, jealously. A flourishing economy, on the other hand, creates what biologists call “a tangled bank” of niches, with no clear hierarchy between them. Tyler Cowen, of George Mason University, points out that America has more than 3,000 halls of fame, honouring everyone from rock stars and sportsmen to dog mushers, pickle-packers and accountants. In such a society, everyone can hope to come top of his particular monkey troop, even as the people he looks down on count themselves top of a subtly different troop.

To find the market system wanting because it does not bring joy as well as growth is to place too heavy a burden on it. Capitalism can make you well off. And it also leaves you free to be as unhappy as you choose. To ask any more of it would be asking too much.

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1. The economy has to be mixed..that means not dividing the middle class

into have and have nots. But I like the idea of a general wellbeing index (GWI) which gages how people are feeling about their lives instead of GDP.

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2. Link isn't working. I guess you need a membership.