I’d strongly suggest that anyone looking into this kind of issues explored more the current research on how wealth distribution affects wellbeing. I recommend The Spirit Level by Wilkinson and Pickett as a point to start, is the single most relevant book I’ve read in my whole psychology curriculum.
Countries hardly find themselves better off due to economic growth and GDP alone, what matters the most is how this increased wealth is distributed, and economic growth is getting more and more decoupled with people finances.
A separated problem is that people seem to be pretty bad at finding an anchor against which to evaluate their happiness level. I’d be pretty skeptical of any program that tried to improve the quality of life and used the people subjective reports of happiness as a measurement.
I read The Spirit Level a few years back. Some notes:
a) The writers point out that even though western countries have had a dramatic rise in economic productivity, technological development, and wages, there haven’t been a corresponding rise in happiness among westerners. People are richer, not happier.
b) They hypothesize that economic growth was important up to a certain point (maybe around the 1940s for the US, I’m writing from memory here), but after that it doesn’t actually help people. Rising standards of living can not help people live better.
c) And!, the writers also say that economic growth has actually led to an increase in depressions and other social ills, in rich countries.
d) Their main argument is however that equality/inequality is one of the most important factors that determines how happy people are in rich countries—and that it strongly influences the outcome of various social ills (such as the prevalence of violence, mental illness, and teenage pregnancy). Rising inequality has resulted in a broken society.
e) The core of the book are some cross-sectional studies of (i) some rich countries that fit certain criteria and (ii) the fifty states of the US, where they compare how well some social measurement (e.g. thefts per capita) correlate with the average wage and some inequality measure.
f) The writers do not present any numbers on how these variables correlate.
g) Instead, the writers produce a graph, for say “mental illness per capita”, with one axis saying how prevalent the problem is (“many” vs “few”) and the other axis measuring either the wage-level or the inequality level (“high” or “low”). And they also produce a line that is supposed to measure the strength of the correlation. (I didn’t note at the time what exactly kind of regression analysis they did, but, again, they didn’t produce any numbers).
h) Usually, they say that variable X wasn’t correlated with the wage-level—but that it was correlated with the inequality-level.
i) Except for “health”, they found a positive correlation between it and the wage-level.
j) Even though they found a correlation between social variable X and inequality, sometimes the most unequal society performed better than the most equal society (of the countries in the sample).
Some criticism of the book:
1) They state, but don’t show that economic growth won’t help people in the future—even if you accept their belief that it has had negligible or negative effects on people’s happiness today.
2) The cross-sectional analysis has at least two problems. The first is that they don’t tell you how correlated inequality is with some social ill. Maybe a 1% increase in inequality would increase the rate of teenage births by 2%, 20%, or 200%. Who knows?
(Furthermore, some writers say that they can not find these correlations, that they disappear if you include more countries, and that some social variables seems to be cherry picked (expenditure on Foreign Aid is used as a proxy for a virtuous society, but private expenditure to poor countries is not used). I haven’t checked the validity of these claims, however.)
The second is that the writers don’t show that the correlation (if it exists) really shows that higher inequality brings about the social ills they discuss. A relatively simple test they could have done would have been to see if a particular problem was correlated with inequality in a society through decades or centuries. That is, can inequality explain the rise and fall of, for instance, the homicide rate within a particular country? If you look at inequality as how much the 10% owns of GDP....then the historical record shows that it doesn’t move in tandem with the homicide rate, for instance, for England & Wales, Sweden, and France. Inequality doesn’t seem to influence the homicide rate at any visible level. And maybe some more thoughtful analysis will show its influence. … Or it could be dwarfed by other factors. Or it has different effects depending upon what ideologies people have adopted.
I’d strongly suggest that anyone looking into this kind of issues explored more the current research on how wealth distribution affects wellbeing. I recommend The Spirit Level by Wilkinson and Pickett as a point to start, is the single most relevant book I’ve read in my whole psychology curriculum.
Countries hardly find themselves better off due to economic growth and GDP alone, what matters the most is how this increased wealth is distributed, and economic growth is getting more and more decoupled with people finances.
A separated problem is that people seem to be pretty bad at finding an anchor against which to evaluate their happiness level. I’d be pretty skeptical of any program that tried to improve the quality of life and used the people subjective reports of happiness as a measurement.
I read The Spirit Level a few years back. Some notes:
a) The writers point out that even though western countries have had a dramatic rise in economic productivity, technological development, and wages, there haven’t been a corresponding rise in happiness among westerners. People are richer, not happier.
b) They hypothesize that economic growth was important up to a certain point (maybe around the 1940s for the US, I’m writing from memory here), but after that it doesn’t actually help people. Rising standards of living can not help people live better.
c) And!, the writers also say that economic growth has actually led to an increase in depressions and other social ills, in rich countries.
d) Their main argument is however that equality/inequality is one of the most important factors that determines how happy people are in rich countries—and that it strongly influences the outcome of various social ills (such as the prevalence of violence, mental illness, and teenage pregnancy). Rising inequality has resulted in a broken society.
e) The core of the book are some cross-sectional studies of (i) some rich countries that fit certain criteria and (ii) the fifty states of the US, where they compare how well some social measurement (e.g. thefts per capita) correlate with the average wage and some inequality measure.
f) The writers do not present any numbers on how these variables correlate.
g) Instead, the writers produce a graph, for say “mental illness per capita”, with one axis saying how prevalent the problem is (“many” vs “few”) and the other axis measuring either the wage-level or the inequality level (“high” or “low”). And they also produce a line that is supposed to measure the strength of the correlation. (I didn’t note at the time what exactly kind of regression analysis they did, but, again, they didn’t produce any numbers).
h) Usually, they say that variable X wasn’t correlated with the wage-level—but that it was correlated with the inequality-level.
i) Except for “health”, they found a positive correlation between it and the wage-level.
j) Even though they found a correlation between social variable X and inequality, sometimes the most unequal society performed better than the most equal society (of the countries in the sample).
Some criticism of the book:
1) They state, but don’t show that economic growth won’t help people in the future—even if you accept their belief that it has had negligible or negative effects on people’s happiness today.
2) The cross-sectional analysis has at least two problems. The first is that they don’t tell you how correlated inequality is with some social ill. Maybe a 1% increase in inequality would increase the rate of teenage births by 2%, 20%, or 200%. Who knows?
(Furthermore, some writers say that they can not find these correlations, that they disappear if you include more countries, and that some social variables seems to be cherry picked (expenditure on Foreign Aid is used as a proxy for a virtuous society, but private expenditure to poor countries is not used). I haven’t checked the validity of these claims, however.)
The second is that the writers don’t show that the correlation (if it exists) really shows that higher inequality brings about the social ills they discuss. A relatively simple test they could have done would have been to see if a particular problem was correlated with inequality in a society through decades or centuries. That is, can inequality explain the rise and fall of, for instance, the homicide rate within a particular country? If you look at inequality as how much the 10% owns of GDP....then the historical record shows that it doesn’t move in tandem with the homicide rate, for instance, for England & Wales, Sweden, and France. Inequality doesn’t seem to influence the homicide rate at any visible level. And maybe some more thoughtful analysis will show its influence. … Or it could be dwarfed by other factors. Or it has different effects depending upon what ideologies people have adopted.