Trojan Horse of 'Happiness Research'
Thomas J. DiLorenzo
by Thomas J. DiLorenzo
by Thomas DiLorenzo: More
Loophole Lobbyists, Please
A very large
literature has built up over the past several decades in the area
of so-called "happiness research." Such research is based
on several very dubious assumptions: namely, that utility
is cardinal and measurable after all; that interpersonal utility
comparisons can therefore be made; and that the great unicorn of
economic theory the "social welfare function"
has finally been spotted. Armed with these assertions, socialists
around the world believe they have finally discovered their holy
grail. Now that governments supposedly know with "scientific
certainty" what constitutes "happiness," there can
be no argument (or so they think) against virtually unlimited government
intervention in the name of creating happiness.
actually a disease that generates massive unhappiness, says the
Australian author of a popular book in this field, entitled Affluenza.
The government of Brazil is in the process of enshrining
this notion into its constitution, and similar movements exist
in Great Britain and other countries.
rest on the proclamation that public-opinion surveys are sufficient
measures of cardinal utility. The economists who make such assumptions
studiously ignore all of the reasons why economists have disavowed
such practices especially the notion of demonstrated preference
for generations. As Murray Rothbard explained in his essay,
a Reconstruction of Utility and Welfare Economics,"
of demonstrated preference is simply this: that actual choice
reveals, or demonstrates, a man's preferences; that is, that his
preferences are deducible from what he has chosen in action. Thus,
if a man chooses to spend an hour at a concert rather than a movie,
we deduce that the former was preferred, or ranked higher on his
value scale. ... This concept of preference, rooted in real choices,
forms the keystone of the logical structure of economic analysis,
and particularly of utility and welfare analysis.
to explain the folly of relying on public opinion surveys, as opposed
to the actual demonstrated preferences of economic decision
One of the
most absurd procedures based on a constancy assumption [i.e.,
the false assumption that people never alter their preferences]
has been the attempt to arrive at a consumer's preference scale
not through observed real action, but through quizzing him by
questionnaires. In vacuo, a few consumers are questioned
at length on which abstract bundle of commodities they would prefer
to another abstract bundle, and so on. Not only does this suffer
from the constancy error, no assurance can be attached to the
mere questioning of people when they are not confronted with the
choices in actual practice. Not only will a person's valuation
differ when talking about them from when he is actually choosing,
but there is also no guarantee that he is telling the truth.
The one economist
who is arguably the leader in the field of "happiness research"
(at least among economists) is Bruno Frey of the University of Zurich.
When I asked him at a conference in Prague several years ago about
the age-old criticisms of replacing actual demonstrated preferences
with questionnaires, his response was that his "data"
were no worse than GDP data. As bad and as unreliable as GDP data
are, "happiness research" questionnaire data are at least
no worse, he said.
But in fact,
much of the happiness-research data are much, much worse.
in fields outside of economics have gone even further with their
research of "happiness." A bestseller in Europe is The
Spirit Level: Why Equality is Better for Everyone, by Richard
Wilkinson and Kate Pickett. The book is an excellent example of
the misuse and abuse of statistics by these two British epidemiologists.
It is an abuse of statistics because the entire book is a fishing
expedition for simple correlations between the degree of material
"inequality" in a country and myriad other variables.
Wilkinson and Pickett don't even attempt the use of multiple-regression
analysis, as is typical in their own field, in economics, and elsewhere.
Consequently, they arrive at contrived statistical conclusions that
greater material equality in a country supposedly leads to improvements
in community life, mental health, drug use, physical health, obesity
rates, intelligence, teenage births, recycling, violence, imprisonment,
social mobility, dysfunctionality, anxiety, and self esteem. (One
critic of this research mocked its abuse of statistical methods
by presenting a scatter diagram that purportedly showed a positive
correlation between recycling and suicide, suggesting that the more
one recycles, the more likely that one will commit suicide!)
these scientific-sounding conclusions (which have been lavishly
praised by politicians, of course), the people of the former Soviet
Union must have been the happiest people on earth, since the pursuit
of equality was always the pronounced objective of socialism. As
F.A. Hayek wrote in the 1976 edition of The
Road to Serfdom, socialism was originally defined as government
ownership of the means of production, and then changed to mean the
redistribution of income and wealth through the auspices of the
welfare state and progressive income taxation. In each case, "equality"
was the ultimate end; only the means changed over time.
make no mention at all of the long-recognized deleterious effects
of welfare statism, including destruction of the work ethic, family
breakup, the growth of dysfunctional citizens who are paid by the
state to remove themselves from the work force, etc.
is no socialist, but the area of research that he champions is being
very enthusiastically embraced by interventionists, socialists,
and would-be central planners within the economics profession. Frey
himself explained this in his June 2002 survey article in the Journal
of Economic Literature entitled "What Can Economists Learn
from Happiness Research?" (with Alois Stutzer). Among the things
economists can learn from this strange branch of psychology, Frey
and Stutzer approvingly report, are the following:
functions have sometimes been looked at as the best existing approximation
to a social-welfare function. It seems that, at long last, the
so far empirically empty social welfare maximization ... is given
a new lease on life."
has increased dramatically since World War II, but "happiness"
supposedly has not. The counterintuitive implication is that work,
investment, and entrepreneurship the ingredients of economic
success do not produce happiness, but human beings nevertheless
keep doing more and more of it year in and year out.
utility comparisons have also been resurrected, supposedly proving
that "social happiness" can be created by the state's
theft of one person's income and the redistribution of it to another
(while keeping a tidy sum for "administrative expenses").
people impose a negative external effect on poorer people but
not vice versa." The supposed negative external effect is
the envy of "poorer" people. Welfare parasites are assumed
to impose no negative effects by being given the income of their
hardworking, taxpaying hosts.
unemployment rises by 5 percentage points the inflation rate must
decrease by 8.5 percentage points to keep the population equally
satisfied," write Frey and Stutzer. Thus, the rotted corpse
of the Phillips
curve and of Keynesianism is given new life
by happiness research.
payments should be increased "to compensate for a larger
family," write Frey and Stutzer, so as "to maintain
the subjective well-being of the family." Again, there is
no mention of the harsh negative effects of welfare statism, or
of the negative effects of massive tax increases on economic growth
rates. Affluence is a disease.
fight for relative positions is socially wasteful, and ... the
high-income recipients, as winners of these races, should be more
heavily taxed," happiness research informs us. Thus, Frey
and Stutzer define hard work, saving, production, and entrepreneurship
as merely "the fight for relative positions" in society,
and a rather trivial "race" rather than a job-creating
engine of prosperity.
- Not surprisingly,
Frey and Stutzer point out that the socialist John Kenneth Galbraith
is widely regarded as the "father" of "happiness
research" because of his numerous anticapitalist, prosocialist
books such as The
everybody's income does not increase everybody's happiness,"
but improving one's income "in comparison to others does."
These, like other claims mentioned here, come from the two British
socialist epidemiologists mentioned above.
If one were
to go to a university library and survey some of the top economics
journals, it would be easy to find dozens of articles that seem
to employ a blur of mathematics in page after page, followed by
mind-numbing econometric pyrotechnics, to prove that water runs
down hill. For example, I can recall reviewing a book on innovation
for the Southern Economic Journal that required 66 equations
to arrive at the conclusion that businesses are likely to invest
more money on innovations that promise a higher rate of return on
their investment. Much of happiness research that is conducted by
economists is exactly like this, very often stating conclusions
that are extraordinarily simplistic and downright comical. The following
are a few examples from the Frey/Stutzer article in the Journal
of Economic Literature. Every one of them could be appropriately
concluded with the expression, "Duh."
with higher income have more opportunities to achieve what they
lottery winners ... reported higher mental wellbeing the following
is more to subjective wellbeing than just income level."
average, persons living in rich countries are happier than those
living in poor countries."
of unemployed persons is much lower than that of employed persons."
unemployment makes people very unhappy."
and happiness are positively related."
people smile more during social interactions."
receiving an inheritance reported a higher mental wellbeing in
the following year."
with higher incomes ... can buy more material goods and services"
and can therefore "achieve what they desire." This contradicts
the other statements about how increased income supposedly does
not increase happiness.
One thing these
mundane, pedestrian statements demonstrate is that happiness research
has indeed been a gold mine for résumé-building academic
economists whose econometric game playing is no longer limited by
the requirement of digging up actual economic data. They can make
up all of their own data by simply mailing (or emailing) out questionnaires.
himself has published dozens of articles and several books of this
sort, and may well win the Nobel Prize in Economics for them. It
would not be a shock if the Swedish socialists who decide on the
prize, funded by the Swedish central bank (not the estate of Alfred
Nobel), gave the award to Professor Frey some day. That would be
an enormous boon to all the socialists of the world, who have never
let economic reality or economic logic stand in their way. As explained
in an excellent critique of happiness research in the form of a
book entitled The
Spirit Level Delusion: Fact-Checking the Left's New Theory of Everything,
by Christopher Snowdon (p. 147),
for Marxism have made myriad excuses for their ideology's failure
to provide the same standard of living and liberty as was enjoyed
in capitalist nations. Until recently, few have been so brazen
as to claim that lowering living standards and curtailing freedom
were the intended consequences, let alone that people would be
happier with less of either. In that sense, books like The
Spirit Level represent a departure for the left. Limiting
choice, reducing wealth and lowering aspirations are now openly
advocated as desirable ends in themselves.
research" is really a crusade to persuade the public that poverty
and servitude to the state are superior to prosperity and freedom.
It is what 20th-century communists referred to as "socialism
with a smiling face" during the last days of Soviet and European
J. DiLorenzo [send him mail]
is professor of economics at Loyola College in Maryland and the
author of The
Real Lincoln; Lincoln
Unmasked: What You’re Not Supposed To Know about Dishonest Abe
Capitalism Saved America. His latest book is Hamilton’s
Curse: How Jefferson’s Archenemy Betrayed the American Revolution
– And What It Means for America Today.
Best of Thomas DiLorenzo at LRC
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