The Well-being Agenda: Measuring Economic Progress

In a distinct vision of the good society envisioned by Friedrich Hayek, Milton Friedman or Gary Becker, individual liberty and freedom can best be protected and achieved by an institutional structure, made up of strong private property rights, free markets, and free trade: a world in which individual initiative can flourish. Well-being would be tied to economic freedom and the inclination to act in ones own self-interest. The theory worked well for the economic and political elite until the financial crisis, then neoliberalism was unable to provide many individuals with the sense of the good life that they longed for. Happiness was to be found in this super competitive environment, if only people worked hard enough to personally achieve it. All unhappiness and dissatisfaction is reduced to a lack of positive attitude. In this fantasy ‘choice’ economy structured barriers to aspiration, achievement and contentment were supposed to melt away.

Gary Becker’s position was that we can understand all social life through the lens of the market (e.g. education, crime, marriage, etc.) Becker’s perspective is interesting because it comes closest to assuming that everything is already a market and, therefore, there is no need to work towards a society in which perfect markets determine our decisions. We’re already there, according to Becker. Every decision and choice can be conceived as a market decision, a finely honed calculation of the benefits and costs of every action we take. If we accept that everything has a market price – that is, the market is expanded to include all social activities – then the benefits of markets are only ensured with the intensification of these market transactions (i.e. frequency, speed and shortened duration) since the market is only efficient if it’s able to re-price everything constantly under conditions of market competition.1

Increased ‘flexibility’ is part of this ‘perfect market’, but it makes it harder for individuals to separate their work from their life. Underneath the freedom of always being your own boss is the reality of fiscal precarity mixed with never having enough time for yourself. All happiness and dissatisfaction is reduced to lack of positive attitude. Since social class is no longer relevant, everybody ends up with the socio-economic position they deserve. This produces a chronic sense of self-blame, unease, anxiety and self-recrimination, with individuals having nobody to blame but themselves for not being famous, very rich or more attractive. The absurdity of the situation is that you can play the neoliberal game to perfection, and still end up with very little in return. Positive psychology enables a new happy subjective perspective from where happiness, rather than a long-term objective, is considered to be a precondition of work, a radical new form of human capital.

There are obvious flaws in neoliberalism, which appear not only at the level of the individual, but also the city, nation, school or university, namely that it views ‘excellence’ and ‘winning’ as the mark of value. But this implies that being normal, average (let alone below average or ‘sub-normal’) is to be without value. The majority of people, institutions and spaces are eliminated via competition, and found to be too weak to excel. Moreover, because it was a competition that revealed this – and not, say, tradition or the power of class stratification – they have only themselves to blame. There’s been a rising sense, since the 1960s, that health is the opposite of pain and unhappiness. One effect of this shift is to pass responsibility for mental well-being towards the individual, directing them to self-help techniques and drugs to address their own unhappiness, which is also a way to avoid  making it part of a public discussion.

Instability and insecurity are also hugely damaging to well-being. The promotion of ‘flexible labour markets’ in the name of growth and competitiveness may therefore not make us better off if it leads to the proliferation of insecure work. A recent paper by economists at the London School of Economics even suggested that capitalist instability might help to explain why well-being has failed to increase over recent decades in countries like the US and UK. For example, the New Economics Foundation’s analysis of European data found that the difference in well-being between temporary and permanent workers was actually greater than that between temporary workers and the unemployed. If this seems surprising, that’s perhaps because we so drastically underestimate the anxiety and stress caused by insecurity.

Donald Trump ran on a promise of restoration, a nostalgia for a time gone by, and the sense that America, particularly white America, is losing and has been losing for years. He promises to bring back the kind of greatness that once existed, but has been taken over by the politically correct that is too focused on diversity to recognize and support the forgotten white man. The problem is that this is also the context that fascism thrives in, with its own seductive promise of solidarity.2 With the failure of the neoliberal paradigm to deliver for most, the most powerful political force in the world one could tap into is nationalism. As Orwell said, “A nationalist can justify anything in the cause of ‘protecting’ his construct of the state.” Used intelligently, the concept of well-being can open up political space to debate the things that really matter to us, both as individuals and as a society.

The present economic model is broken – failing to make us better off. It is necessary to produce a model of mind and body more suited to the post-industrial workplace, in which positivity and energy are viewed as the source of economic value. Amongst the most worrying practical effects has been the incorporation of positive thinking into workfare programs, with benefit claimants being told that their negative attitude is the reason they are unemployed, and they must therefore overcome that using various cognitive and behavioural techniques. This, and other examples, produce an ideology in which the social world is a fixed set of institutions, no matter how unjust, but the psychic-emotional world is sufficiently malleable as to compensate for that. The well-being agenda is not just a sideshow to neoliberal economics: it points towards a new economics, one which values equality, stability and community rather than simply growth for growth’s sake.

The IMF now suggests that inequality undermines growth itself. So the neoliberal project does not address social welfare. Well-being data indicate going for growth while ensuring the markets work efficiently to allocate goods to people who value them most, then social welfare is not optimized. A rising tide does not lift all boats. It now appears that reducing poverty and promoting equality are more important goals than simply increasing the size of the economy. Well-being should not be placed outside the economic sphere – seen as nice-to-have, a luxury for good economic times, hardly a priority in a recession. The problem is that people tend to sit well-being atop of the neoliberal economic approach to economic policy, rather than rethinking or challenging it. A focus on well-being would provide support for a more radical economic agenda – one that cares more, not less, about reducing poverty and inequality.3

The truth about most situations is we know what will make people better. Individuals require stability or adequate predictability for a person to concentrate on the here-and-now, and on future growth and change, and where small obstacles do not set off big cascades. Of importance is safety, the degree to which a person can be his or her authentic self and not be at heightened risk of physical or emotional harm. Where there is adequate predictability a person feels in control of his or her fate and the decisions he or she makes, and where he or she experiences some correlation between efforts and outcomes. Meaningful access to relevant resources ensures a person can meet needs particularly important for his or her situation in ways that are not overly onerous, and are not degrading or dangerous. From the key elements for well-being – happiness, optimism and self-worth – comes the belief the desired result is achievable.

Alleviating poverty and inequality need to be core and explicit goals of macroeconomic policy. We need a new emphasis on positivity in a system that presently informs you at every stage you are already a loser. This affects mental health – the effect is magnified the more unequal the society. This problem is particularly acute for those already caught up in the punitive grip of ‘incarcerative care’. Societal progress is about improvements in the well-being of people and households. For well-being measures to start making a real difference to people’s lives, they have to be explicitly brought into the policy-making process. The measuring well-being agenda calls for new and improved statistical measures, aimed at filling the gap between standard macroeconomic statistics that sometimes are used as proxies of people’s welfare, and indicators that have a more direct bearing on people’s lives. These will augment statistics such as GDP that do not provide a sufficiently detailed picture of the living conditions that ordinary people experience.4

1 Kean Birch. ( 29 Jan 2016) How to think like a neoliberal: Can every decision and choice really be conceived as a market decision?

2 William Davies (16 Oct 2017) Mental Health and Neoliberalism

3 Christine Berry (23 April 2014) Well-being is more than a side-show to neoliberal economics.

4 OECD Better Life Initiative: Measuring well-being and progress.

This entry was posted in economic inequality and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *