Unregulated markets do not make people ‘Happy’.
By Sue Davies
One of David Cameron’s more risible policies has been to ask the ONS (Office of National Statistics) to gather data on the UK’s happiness. Not laughable because of gathering information about ‘well-being’, but because asking statisticians and economists to devise a questionnaire, is the equivalent of asking brain surgeons to perform Shakespeare or build a house. No doubt they would give it a go, but frankly, it would be better to ask someone with the expertise.
The apparent intention of monitoring the UK’s ‘well-being’ should be applauded, because increasing the sum of global well-being should be the over-arching and ultimate motivation for every politician and policy. However, this practice of letting economists have undue influence outside their field of competence, has a history which is not always positive. For example, the currently over inflated faith in Cognitive Behaviour Therapy (a perfectly good approach in some instances but by no means a cure-all) stems from the unwarranted influence of ‘Happiness’ economist, Lord Layard, over New Labour’s mental health policy.
Several years ago, I attended a talk about ‘Happiness Economics’ given by Richard Layard, and ventured to suggest that all his examples of things-that-make-people-happy, are examples of ‘secure attachment’; attachment to others, attachment to the world and attachment to oneself. At that point, the woman sitting next to me said sternly “Richard, I checked your index and you have not one entry for ‘attachment’!” I later realized that she was Penelope Leach (a name well-known to many parents, as the author of ‘Your Baby and Child: From Birth to Age Five’ (1977)), an expert in infant psychology, who is ideally placed to verify ‘security of attachment’ as the appropriate context for ‘happiness’ studies. Naturally, it also follows, that a lack of ‘secure attachment’ is significant in creating unhappiness.
(Definition of attachment: an emotional bond or tie to somebody or something. Related to bonding: the formation of a close emotional tie between people, for example, between a mother and her newly born infant.)
There have been many attempts to measure ‘Happiness’ or ‘Well-being’ using economic indicators or personal wealth.
A 2005 report (1), by the International Labour Ofﬁce’s ‘Economic Security for a Better World’, found that ‘economic security’ (not economic growth) coupled with democracy and equality were key determinants of well-being and social stability:
People in countries that provide citizens with a high level of economic security have a higher level of happiness on average …. The most important determinant of national happiness is not income level – there is a positive association – but rising income seems to have little effect as wealthy countries grow more wealthier. Rather the key factor is the extent of income security, measured in terms of income protection and a low degree of income inequality.
John Barry (2009), suggests that such ﬁndings give empirical support to … ‘arguments stressing the need for policies to increase well-being and quality of life, rather than conventionally measured economic growth and gross domestic product (GDP), rising personal income levels or orthodox measures of wealth and prosperity. Therefore, one possibility is for ‘economic security’ to replace ‘economic growth’ as a macro-economic objective.’
Statistically, therefore, income level is positively associated with a rise in the average level of ‘happiness’ in poorer countries, but after a certain level of wealth is achieved, the effect ceases. However, it should be remembered that an increase in the statistical average (means, medians and so on) does not necessarily indicate a uniform increase in the distribution of wealth, and usually wealth is not evenly spread. The rich invariably become disproportionately ‘more rich’ than the poor (for example, what has happened in China, Russia and India).
Nevertheless, the research unequivocally indicates that the ideology of continuous ‘economic growth’ is not associated with a proportionate increase in ‘well-being’.
This should be no surprise. It is clear that the identified goals of income security, and a low degree of income inequality, are completely incompatible with the requirements of the current economic system (Thatcherism or Reaganomics) which has dominated globally for the past three decades. Implicit to the unregulated market, or neoliberalism, is flexibility in the labour market. In other words, there may be little job security for a worker because of temporary or short term contracts; the undercutting of wages because of the free movement of labour within the EU, out-sourcing of jobs abroad, anti-union legislation and so on. Toleration of high levels of unemployment is also implicit. Redundancies, increased work loads, pay freezes, closing of pension schemes and pay cuts are implemented in the name of ‘efficiency’ or ‘the bottom line’, without seemingly questioning the underlying desirability, or implications, of such ‘efficiencies’ or increased profits, for either society or the individuals affected.
The ‘trickle down’ theory of wealth from the richest to the poorest has also been largely discredited. It is estimated that globally, super-rich individuals have deposited $11.5 trillion in tax havens, which results in an annual loss of tax revenue of about $250 billion. This is five times the 2002 estimate needed by the World Bank to facilitate the UN Millennium Development goal of halving world poverty by 2015 (3). The existence of tax havens, another prominent feature of neoliberal capitalism, allows the streaming away of the income which is due to each country’s population, in a manner reminiscent of the average tapeworm. In the UK, the taxpayer helps to rear, educate, and provide health and welfare services for the workforce. The taxpayer also pays for or subsidizes much of the country’s infrastructure (roads for example), which is of benefit to any business or corporation … but the transnationals, the banks and the super-rich do their utmost to avoid paying anything back. Tax avoidance strategies are the very antithesis of ‘attachment’ to the UK.
Furthermore, the free market system justifies large disparities in wealth, as allegedly the means to promote and reward, innovation and entrepreneurialism. But as Wilkinson and Pickett (2009) write in their book ‘The Spirit Level: Why More Equal Societies Almost Always Do Better’:
” (There are) pernicious effects that inequality has on societies: eroding trust, increasing anxiety and illness, (and) encouraging excessive consumption“.
Wilkinson and Pickett identify eleven different health or social problems, which are significantly worse in more unequal rich countries … physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust, community violence, teenage pregnancies and child well-being. A psychotherapist would suggest that, in each instance, there would almost certainly be ‘attachment’ difficulties, which might be organic, familial, societal, cultural or existential in origin.
It is also clear that, irrespective of the overall wealth of a particular nation, any individual who is unable to adequately feed, house, clothe, educate or keep healthy, their dependents or themselves, is likely to have a decreased level of ‘well-being’ and quality of life.
Essentially, Homo sapiens are social beings. Our need for relationship is reflected in the fact that solitary confinement is a punishment. We ‘know who we are’, by the innumerable ways in which other people, our environment (social, occupational, physical and natural) and our own actions (successes and failures), combine to reflect back to us our different attributes and capacities…. and our ‘lovability’. Our brains contain ‘mirroring’ neurons, which allow us to intuit another person’s feelings, to have empathy and to know what to do or say next, in order to hopefully establish connection. This connectedness or attachment makes us feel ‘happy’ when things are going well, but it also produces an empathetic discomfort when others are suffering. This discomfort can result in an altruistic desire to ‘help make the other better’; or … and this is particularly so when there is a perceived scarcity or a threat to survival … a desire to separate from the other’s distressing circumstances by attributing ‘blame’ to the other. For example, the other may be considered culpable for their own situation because of ‘laziness’ or ‘scrounging’. This breakdown in ‘attachment’ is associated with anger, sadness or fear but not happiness.
The policies of the Tory-led government play on this negative reaction. Since the general election, they have deliberately created a false scare about the UK having been on the verge of bankruptcy from a sovereign debt crisis, in order to justify the privatisation of public services and a redistribution of wealth upwards into the coffers of the City. The proposition that ‘The credit card has been maxed out.’ is a cynical but believable ploy, which is intended to frighten voters into accepting the unacceptable. The coalition has sought to undermine people’s empathy for those worse off than themselves, by suggesting that the unemployed are all lazy scroungers, and that those on disability benefits are fraudulent. This argument simply does not stand up to scrutiny. There are five unemployed people for every vacancy and anyone who has tried to obtain disability benefits knows how the process is irrationally difficult. The government attacks the Public Service workers through the two year pay freeze, increasing pension contributions, increasing the pension age and reducing the pensions … which will effectively result in a 10% pay cut … the underlying agenda is to ready the public services for privatisation, but the rationale is to set one group of workers against another; the public vs. the private sectors. Even Eric Pickles’ own department acknowledges the huge scale of displacement from their homes which is likely to occur for families, if the proposed cuts to housing benefits remain unchanged. Our homes are our ‘place of safety’, to which we are usually firmly ‘attached’, and these measures will cause enormous distress. Overall, many more individuals will find themselves struggling to adequately feed, house, clothe, educate or keep healthy, their dependents or themselves, as a result of the Conservative-led government’s policies.
A future Labour government must seek to implement policies that will reconnect the population, and enhance our capacity for altruistic and co-operative responses. But first, many former LP members and voters need to be able to reattach to the LP. The significance of Ed Miliband’s statement on the 30th June strike was not what he actually said, but the fact that for many, it damaged the beginnings of trust that the LP was indeed a political party that was on the side of the vast majority of people. The vast majority will have their incomes, schools, hospitals, pensions and public services unfairly eroded by the Conservative-led government and its disastrous ideological policies of privatisation. This has been facilitated by the failure of New Labour (with its commitment to managerialism and accommodations with the City) to maintain an ‘attachment’ with the voters. It should be remembered that:
Public services were won by trade union struggles in an effort to establish the basis of a civilised society. Driven by the desire for maximum profits, the private sector fails to provide effective and efficient public services. (4)
The real ‘Big Society’ was created by the Trade Unions, the Co-operative movement and the mutual building societies over 200 years ago, and it is the very opposite of the contemporary Conservative vision.
There are still too many Labour activists and politicians whose only concern is seemingly about gaining votes. Instead, the Labour Party needs to focus on new policy directions which are positive, and which could be said to potentially play a part in creating a secure attachment between the people and the role of the State. However, it is fundamental to implementing the sort of policies that increase ‘well-being’ and quality of life, that the LP must also dismantle the ‘the huge institutional blockage of neo-liberal capitalism … ‘The elephant in the room’ (5).
The Political Economist might say there is a need for policies to increase well-being and quality of life, rather than conventionally measured economic growth and gross domestic product (GDP), rising personal income levels or orthodox measures of wealth and prosperity (Barry, 2009).
The Psychologist would say there is a need for policies that value people, and facilitates and respects their ‘attachment’ to others, to themselves and to their world.
The Parasitologist would say that the majority’s financial security, and all that that implies, is being exploited by the few, and there is an urgent need for an ‘immune response’ to be activated.
The Environmentalist would say that this lifestyle is not sustainable in the long-term; and it is bio-physically impossible for this contemporary, globalised, carbon-fuelled, climate-changing lifestyle (which does not even increase human ‘well-being’) to be extended to the world’s population.
All in all, the abandonment of Hayek and Friedman’s experiment in unregulated capitalism and globalisation is long over-due. As has already been said, ‘… this practice of letting economists have undue influence outside their field of competence, has a history which is not always positive.’
(2) Richard G Wilkinson and Kate Pickett (2009). ‘The Spirit Level: Why More Equal Societies Almost Always Do Better.’
(5) Red Labour must address the Elephant in the room. https://think-left.org/2011/07/21/red-labour-must-address-the-elephant-in-the-room/