Are Happiness and Economic Growth Linked?

What makes you happy? Family, friends, a strong community? How about “economic growth”? It’s not typically a buzzword to trigger your feelings, but a recent report suggests a nation’s economic growth is a variable in one’s personal happiness.

Of course, happiness isn’t entirely dependent on economic growth, a national measurement for determining overall well-being, but it sure seems like it could contribute to one’s personal outlook.

Yet, the authors of a global happiness report seem to suggest that happiness and economic growth have been decoupled. The just-released World Happiness Report 2017, an annual survey of 1,000 people in 150 nations, places the United States just 14th on the happiness scale. But the real eyebrow raiser is that the top five happiest countries are facing slower economic growth.

Business journalist (and Former Jeopardy champ) James Pethokoukis says that the authors’ conclusions may not be what they seem.

One of its highly touted findings is that the world’s ‘happiest’ nations — such as Norway, Denmark, and Switzerland — have been growing more slowly than the world as whole, including the number 14-ranked U.S., in recent years. The report’s authors fully embrace the goal of pushing ‘happiness’ as the best measure of social progress rather than the ‘tyranny of GDP.’ And as economist Jeffrey Sachs writes in the report: ‘The predominant political discourse in the United States is aimed at raising economic growth, with the goal of restoring the American Dream and the happiness that is supposed to accompany it. But the data show conclusively that this is the wrong approach.’

But is that what the data show, really?

The whole thing seems a little weird when you take a closer look.

Pethokoukis points out that the “happiest” countries are small — an average of 11 million people in the first 13 happiest nations (all the ones in front of the U.S.). The “happy places” are also culturally homogeneous, particularly the Nordic nations that rank at the top. Not surprisingly, the happiest nations also want faster-rising incomes, a component of economic growth.

Pethokoukis adds that the happiest nations also suffer from their fair share of unhappiness, with high suicide rates (and possibly low expectations)! Americans, on the other hand, “are demanding, complain when dissatisfied, and by the way, also produce the hard-driving entrepreneurs like Steve Jobs and Bill Gates who push the technological frontier so Europe doesn’t have to.”

He suggests national identity and culture most certainly has to be a variable in the happiness outlook, but more than that happiness isn’t the result of higher incomes, but more opportunity to create “a life of deeper human flourishing.”

Read Pethokoukis’ full article.

Harvard Business School Study Blames Gridlock for Lower Economic Growth

In a world where over-reliance on government to steer, monitor, and correct private behavior has sucked the courtesy out of human discourse, it should come as no surprise that one of America’s largest educational institutions is reporting that political gridlock is hampering economic growth.

Harvard University’s Business School blames political stalemate in Washington for limited economic growth.

“The federal government has made no meaningful progress on the critical policy steps to restore U.S. competitiveness in the last decade or more.”

Reporting on the study says:

U.S. gross domestic product grew at a rate of about 2 percent since 2000, well below the 3 to 4 percent average in the prior half-century. … The study contends that factors including a growing wealth gap, declines in productivity growth, and a rise in the number of working-age people neither employed nor seeking jobs show that the U.S. economy is becoming less competitive.

At the same time, Harvard reports that the companies most likely to benefit from Washington’s corporate cronyism — larger companies and million-dollar-funded Silicon Valley startups — are keeping the wheels turning, while small businesses are no longer the lifeblood of America’s economic engine.

More damaging still, the authors were quoted saying that the distortion is growing in a political election season filled with mis- and disinformation.

To us, the confused national discussion about our economy and future prosperity in this election year is our worst nightmare,” they say. “There is almost a complete disconnect between the national discourse and the reality of what is causing our problems and what to do about them.

This misunderstanding of facts and reality is dangerous, and the resulting divisions make an already challenging agenda for America even more daunting.”

The lingering premise of the study, which has the subheadline: “Political Dysfunction is the Greatest Barrier to Strengthening U.S. Competitiveness,” suggests that Americans can’t drive economic growth without central government.

Could dismantling some of the regulatory hurdles that businesses face make it easier for Americans to contribute to growth? Of course, but that can’t be done without Washington’s cooperation in reducing government. So if America’s politicians can’t cooperate, how are the rest of us expected to get along?

One major irony of the report, which was cited in more than a dozen news stories on Wednesday and Thursday, is that its conclusions came from an overwhelming consensus  of … Harvard alumni. That’d be Harvard alumni across party lines. Bet you didn’t know that was a thing. More amusing still, Harvard Business School’s tag line is: “We educate leaders who make a difference in the world.” What is less amusing is the likelihood that Harvard alumni populate a great number of the institutions faulted for the gridlock.

While a concurrent study showed that only a portion of the blame for lower economic growth goes to government among the general public across party lines, the Harvard study did make some suggestions that many may find at least somewhat appealing. They include changing the corporate tax code, allowing more highly skilled immigrants into the U.S., streamlining federal regulations, improving infrastructure, reforming the K-12 education system, and addressing unfair global trade practices.

Many of the news reports were cited on Harvard Business School’s news page, but the report itself was not clickable. It linked to an empty comments page. There’s gotta be irony in there somewhere.