Objective Measures of Happiness

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Economic analysis is the science of establishing an intelligent allocation of scarce resources available to us, one of which is manpower.

Monetary analysis of an economy has been the standard measure since economics began, but it is of only limited value. Its failure is to measure many aspects of life, such as emotional wellbeing arising from factors such as relationships and security.

Shortcomings of Happiness
Enter Happiness. It is in the process of developing into the second plank of economics analysis. Its key attraction is it provides for subjective input, to complement the heartless, emotionlessness of money. Happiness (which might more appropriately be termed Well-being or Quality of Life) is depends entirely on subjective evaluation. This is one of its raisons d'etre. But we are very poor at measuring our own happiness, which makes it also one of its key flaws. Even from hour to hour, we are inconsistent in our assessment of how happy we are. We are too easily swayed by how tired we are, what other people think about us, what we think they have, or more accurately what we think they ought to have. Key to our perceived happiness is where we are relative to our expectations. We can accept being "poorer" than a corporate boss, but we are very much less happy at feeling poorer than our neighbour, even if we are wealthier.

Solutions - the third leg
If we persist with using exclusively subjective measures of our own personal well-being, we risk economic policy descending into mind games. There are demonstrations in Hong Kong at the Chinese government's introduction of a new school curriculum that many in Hong Kong see as brainwashing. If our sole measure of effectiveness of our economy is well-being, which is dependent on what we think we should have, what is wrong with that? Reduce expectations for an instant rise in happiness, providing you can maintain industry's productivity in the process.

The answer is that there are objective measures of happiness that we can relate to. Even if we do not see it at one level (eg. when asked how happy something makes us), we do see it at another (eg. when comparing latest technology with previous periods).

The conundrum is that economic success can not be measured without regard to subjective assessments of our quality of life, yet we lack the skills to provide sufficiently reliable, useful feedback. At its heart, it is this poor ability to judge values reliably and consistently that is the weakness of monetary economics. If we were more skilled in this area, we would be much better at converting our likes and dislikes to their monetary equivalent, and we would be able to avoid piling resources into economic structures that will be doomed to be wasted at the next economic downturn.

There are two parts to the solution. Together, they form the third leg of the stool against which the effectiveness of an economy can be gauged. Before listing them, it is important to remember two factors. Firstly, we want to evaluate subjective outcomes in order to help develop a society that makes efficient use of its resources. Failure to incorporate subjectivity reliably is almost certain to result in use of resources that is not in our best interests. Secondly, it is important to know what is "our best interests". In my view, the objective of a society is to maximise the aggregate quality of life for members of society, of which material output is only a part.

The first component of the solution is provision of old-fashioned material gain. It needs some reference points. One is absolute poverty. It is universal. It is the freezing point of human existence. The boiling point has something to do with the point at which an increase in consumable wealth (consumed resources + changes in wealth in any given period) produces a declining increase in value to the recipient (the 45 degree gradient of a point on an asymptotic graph).

The second component requires some objective measure of happiness. If we are not very skilled at judging our own happiness, it does not require much human contact to know how much worse we are at judging someone else's. By their nature, objective measures have subjective elements to them. So the best we can do is to try hard to achieve objective measures, to complement the subjective measures which our current level of data processing capacity is only just starting to be able to monitor.

The basis of the objective measures is a model of society that establishes the benchmark for its efficiency. The key challenge of society is to devise a way of our living and working with each other in a way that allows achievement of the objective to maximise the aggregate quality of life. Elements of the structure achieve the objective indirectly. Physical infrastructure, for example, accommodates efficient movement of physical resources as part of efficient productive systems, which in turn provides greater levels of wealth available to consume. Relationship infrastructure, for example, delivers the trust needed to accommodate specialisation, which in turns provide greater levels of wealth. But betrayal of trust is a direct injustice, which directly impacts on quality of life.

A reasonable approximation to an objective measure for quality of life are indexes that measure the strength of the Pillars of Society, or the Relationships infrastructure. They include truth, trust, justice and rights (which incorporates respect of basic human worth). There are many clever measures of aspects of each of the infrastructures, such as the social justice index.

Superimposed onto the structural patterns are individual cultural or societal behaviours. The level of cohesive behaviours (such as integrity, patience and compassion) and divisive behaviours (such as corruption, prejudice and hate) that individuals experience cumulate to impact on the quality of life. The balance may be subjective, but the overall impact provides some level of objective approximation.

Illustration of the importance of objective measurement
Humans are adept at adaptation. Most of us belong to several cultures. They might include local communities, national cultures, the work place, family and social structures, playtime environments such as playgrounds or sports clubs, educational institutions and religions. Each community has its own way of doing things. Many of the rules are common to many communities. Some direct clash with each other. We are skilled at adapting our behaviours to match our situations. We model our behaviour on our environment.

An interesting initiative is Values-based Education. It helps schools to adopt universal positive behavioural values in every area of its activities. It inspires and guides the school to strengthen and expand the scope of its explicit teaching of values, which its pupils experience first hand. The principle is that pupils will model their behaviour on the environment in which they spend at least one third of their waking time.

In practice, it turns out to be hugely successful in advancing the quality of life of both students and teachers. Its benefits even seep into the wider community. Its key success is the strengthening of relationships amongst students, teachers and between the two groups. As a bi-product, there is an enormous amount of anecdotal evidence that pupil's educational attainment rise. It delivers fairness and a sense of self-worth. It advances quality of life, but by how much?

Quality of life for each individual is an immensely complex mix of expectations, circumstances and perspectives. This is partly why each of us finds it so difficult to give a reliable self-assessment. So in the case of eight year old pupils at a school, comparing the influence of a school's Values-base on their individual quality of life is moderately easy in terms of "better or worse" when compared with a traditional Imposition-based school, but it is profoundly difficult to quantify. Objective measures of quality of life, despite elements of subjectivity and their necessary simplicity, give an insight that is not available without such measures.

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