Book Review: Wellbeing Science and Policy
Richard Layard and Jan-Emmanuel De Neve. 2023. Wellbeing Science and Policy. Cambridge University Press. ISBN 978-1-009-29892-6 Hardback.
Annavajhula J C Bose, PhD
Department of Economics (Retd.), SRCC, DU
Are you wondering if there is any scientific non-Marxist, non-socialist policymaking to promote wellbeing or happiness in the world, i.e. without radically altering the structural inequalities in the socio-economic system? If so, this is the new Bible, so to say, you must read. In other words, this book gives you the confidence of realising the possibility of a planetary El Dorado based on individualistic positive psychology instead of social determinants of inequality.
The book is a fascinating four-in-one exposition of new knowledge on what is the proper goal of our society and on the idea that the best goal is the wellbeing of the people; the determinants of wellbeing and the policies that can improve it; many different ways of studying causal relationships in social science; and how different disciplines, especially psychology, sociology and economics, can each contribute usefully to understanding how we can produce a happier world. The external validation to read this book has come from the behavioural economics Nobel-laureate Daniel Kahneman: “This is the best book I have read in a long time—a fountain of knowledge and an inspiring call to action.” Incidentally, he was recently in limelight for having exited the world by assisted suicide at the age of 90 years or so in Switzerland.
Wellbeing means how you feel about your life, how satisfied you are. It is measured by asking people, “Overall, how satisfied are you with your life these days?”. Typically, people are asked to respond on a scale of 0 (not at all satisfied) to 10 (very satisfied). People’s answers reveal a lot about their inner state even as their answers correlate with relevant brain measurements and with judgements of their friends. Life satisfaction is determined on the one hand by what we contribute to our wellbeing as ‘agents’ through our behaviour, our thoughts and our genes and our physiology; and on the other by how we are affected by our environment in terms of our family, our schooling and our experience of social media; our health and healthcare services; having work; the quality of our work, our incomes, our communities, our physical environment and the climate of the planet; and our system of government.
Policy makers and governments can use this knowledge to choose policies that create the greatest wellbeing for the people. The mainstream traditional economic model is useless in this regard. “In the traditional economic model, people do whatever is best for their own wellbeing, and the process of voluntary exchange leads to the greatest possible wellbeing all round. On this basis, laissez-faire will solve most problems. But modern behavioural science challenges this view of the world…There are two main problems. First, people are not that good at pursuing their own best interests. Many people overeat or take little exercise. Some become addicts. Others make changes that they think will improve their lives, without realising that they will soon get used to the new situation and feel no better than before. Moreover, people are hugely affected by how choices are presented to them so their preferences are often not well-defined. And in the short term, people are loss-averse, which can lead to greater losses in the long term. The second issue is that everybody is hugely affected by how other people behave in ways other than through voluntary exchange. This is a case of what economists call externality—things that happen to you that do not arise from voluntary exchange. Economists have always been explicit that externality calls for governmental action, but they have not always realised how pervasive externality is in human life: It really matters to us what the pool of other people we live amongst is like—are they trustworthy; are they unselfish? Other people (society at large) influence our tastes, for good or ill. If other people or colleagues get higher pay, this reduces the wellbeing we get from a given income. For all these reasons, there is a major role for governments and for educators in affecting the context in which we live and thus our wellbeing.”
There are some interesting findings to note. Both government conduct and government quality are significantly related to wellbeing levels around the world. Residents of low-income countries are more affected by their governments’ provision of basic goods and services, while residents of high-income countries place a higher value on democratic influence. Decreased opportunities for democratic involvement in politics decrease wellbeing. Government size (measured in terms of both welfare expenditures and government consumption) is generally positively associated with wellbeing. Higher levels of national happiness are predicted by the level of social benefits as well as the ease by which citizens can access them. Right-leaning individuals are generally happier than left-leaning individuals. But residents of countries with left-leaning governments are generally happier than those living in countries with right-leaning governments. Research has also shown that wellbeing predicts incumbent party support even as there is limited experimental research to examine whether or not low wellbeing leads to populist support.
Very few countries are implementing wellbeing policies. The exemplary case is New Zealand where, in 2019, the Labour government announced its first Wellbeing Budget. Its novel feature was to focus any new additional expenditure on things that increase wellbeing in a cost-effective way (mental health services, reduction of child poverty and domestic violence, Maori wellbeing and climate change). The rest of the budget was justified in terms of its effect on physical capital, human capital, social capital and natural capital, which were seen as contributing to the sustainability of wellbeing—but that contribution was not quantified.
Thousands of experiments would be essential to evaluate possible specific policies. We need quantitative models of how wellbeing evolves over the lifespan—and of the claims which people in different circumstances impose on the public finances. Building these models is a priority for research. The better the knowledge base, the better the chances that policy makers would use it. The explanation of wellbeing would become a central aim of all the social sciences.
In light of this, it is a moot question as to why the ruling government and policy makers in India are not yet drawn to the wellbeing science and policy briefly mentioned on the above lines, leave alone why the mainstream economic pedagogy is immune to this new science. It is high time the ruling classes in India and economics professors in general shouted in chorus with President Xi of China who is at least known to have repeatedly stated the sense without sensitivity towards his own people that “the wellbeing of the people is the fundamental goal of development”!
References
https://www.hrw.org/news/2023/01/12/china-unprecedented-nationwide-protests-against-abuses
