Friday, 7 March 2003

Money and happiness

The evidence is clear: our wellbeing depends on cooperation and the public good, not personal enrichment

When God died, GDP took over and economists became the new high priests. That has been the story of the last century, with prophets from Hayek to Keynes. The "dismal science" - economics - rules our lives and politics. So when one of the wizards of economics breaks ranks spectacularly and rips away the curtain of his own profession's mystique, it is time to take notice.

Lord (Richard) Layard, the LSE's director of the centre for economic performance, has this week delivered three startling lectures which question the supremacy of economics. It doesn't work. Economies grow, GDP swells, but once above abject poverty, it makes no difference to citizens' well-being. What is all this extra money for if it is now proved beyond doubt not to deliver greater happiness, nationally or individually? Happiness has not risen in western nations in the last 50 years, despite massive increases in wealth.

This sounds like the stuff of vicars, Greens and prophets of doom with sandwich boards in Oxford Street. Yes, we've considered the lilies of the field while getting on down to Dixons, humming "money can't buy me love" all the way to the bank. Retail therapy feels good. So most of serious politics, and thus our national life, revolves around cash, its getting and spending.

Layard is not the first to say this: there is a growing new scientific movement studying happiness. Daniel Kahneman, the winner of this year's Nobel Prize for economics - yes, economics - is best known for his work on hedonic psychology. Suddenly the big question is being asked by those who spent their lives on making and measuring money: what's it all for?

For doubters, he offers a wealth of hard scientific evidence. Neuroscience has backed up social and psychological surveys: brain scans now prove that people's reported happiness levels are remarkably accurate, as easy to measure as decibels of noise. And people are no happier than they were.

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