Evaluative measures: The life satisfaction approach

In the first of these, people are asked how they feel about their life these days. The most common question is ‘Overall, how satisfied are you with your life nowadays?’Footnote ⁶ To answer it, individuals have to choose a score between 0 and 10, where 0 means ‘Not as all satisfied’ and 10 means ‘Very satisfied’. This is a question on life satisfaction. Alternatively (which gives very similar answers), people are offered a continuous line with the same answers at either end, and they are asked to mark where their answer lies in between. The results of using a ‘visual analogue scale’ like this are very similar to those from whole-number answers between 0 and 10 – both in terms of the score recorded and the factors that explain it.Footnote ⁷ The results are also similar when, the phrase ‘satisfied with your life’ is replaced by the phrase ‘happy with your life’.Footnote ⁸

In another variant, people are asked the following question, known as the Cantril ladder question:

The World Happiness Report uses the answers to the Cantril ladder question given when people reply in the Gallup World Poll.Footnote ⁹ This poll covers over a thousand people a year per country, in nearly every country. In surveys where people were asked both about life satisfaction and the Cantril ladder they were very highly correlated.Footnote ¹⁰ So for ease of language we shall describe the results of the Cantril ladder as ‘life satisfaction’.

The Gallup World Poll shows the huge spread of life satisfaction both within countries and between countries. For illustration, Figure 1.1 gives the spread in the United States and in India. Some key facts emerge:

• In each country there is a very wide spread of life satisfaction. This corresponds to our own experience, across the range of people we meet.

• The average of life satisfaction is much higher in the United States than in India.

There is indeed a huge variation of life satisfaction within any country, and this within-country variation actually accounts for 78% of the overall variance in life satisfaction across the world’s population.Footnote ¹¹ Exploring the within-country variation provides key information about the personal factors that matter most in human life (see Chapter 8). For example, as we shall see, income differences explain some 2% of the variance of life satisfaction within countries – much less than the 20% explained by mental health, physical health and human relationships. (Somewhat surprisingly, average life satisfaction in most countries is very similar for men and women.)

Figure 1.1 Percentage at each level of life satisfaction (0–10): United States and India

Source: Gallup World Poll 2016–2018, Cantril ladder

There are, however, also huge differences in average life satisfaction across countries. This is shown in Table 1.1,Footnote ¹² which reveals the extraordinary variation in the human condition around the world. Average wellbeing is evaluated at 7.5 or above in four Scandinavian countries and at 3.5 or below in war-torn countries like Syria, Yemen, Afghanistan, the Central African Republic and South Sudan. Explaining this variation provides many clues to the social factors that matter most in human life (see also Chapter 8).

One obvious question is, ‘Has wellbeing increased over time, as living standards have risen?’ The answer is in some cases yes and in others no. For the world as a whole, average wellbeing rose between the 1970s and 2007.Footnote ¹³ Since then, however, it has stagnated.Footnote ¹⁴ And in some countries wellbeing has not risen since research began. This is true of the United States (since the 1950s), West Germany (since the 1970s) and China (since 1990).Footnote ¹⁵ Figure 1.2 shows the figures for the United States.

If only we knew more about trends in wellbeing in earlier periods.Footnote ¹⁶ There is certainly strong evidence that most of the external conditions of life are now better than in most of human history. As Stephen Pinker has shown,Footnote ¹⁷ there is less violence, better human rights and so on. So in most parts of the world, life is probably as good now as it has ever been.

Figure 1.2 Average happiness in the United States (on a scale of 1–3)

Source: AIPO (1956–1970); NORC (1963–1976); GSS (1972–2018) grafted together onto the GSS scale based on overlapping years (see online Annex 1.1)

Hedonic measures based on ‘affect’

Our findings so far are based on people’s replies to a single question about how respondents evaluate their life ‘nowadays’.Footnote ¹⁸ But some people prefer a different approach to the study of human wellbeing – where we study more directly how people feel at the time. By comparison with this, the evaluative measures cover a longer unspecified period of time and involve an element of judgment (although they are generally completed within a few seconds).Footnote ¹⁹

The alternative measures are known as hedonic measures (from the Greek word hedone meaning pleasure). Psychologists use the word ‘affect’ to describe feelings of different sorts. Some types of affect are positive (happiness, enjoyment, laughter) and some are negative (worry, sadness, anger and stress). There are three main ways to capture these feelings. One is in real time by beeping people and asking how they are feeling just now (Ecological Momentary Assessment). The second is to sit people down a day later and have them record how they felt on the previous day hour by hour – and what they were doing and who they were with (the Day Reconstruction Method). The third, also used by the Gallup World Poll, is to ask them to summarise their different feelings over the previous day by asking Yes/No questions like ‘Yesterday did you experience a lot of happiness?’

How people feel when they are doing different things is hugely interesting. A team led by Daniel Kahneman used the Day Reconstruction Method to investigate the feelings of around 900 Texan women during the course of the previous day.Footnote ²⁰ Table 1.2 shows what they enjoyed most and what they enjoyed least.

Such information is highly relevant to how each of us can improve our daily life.Footnote ²¹ And, in principle, hedonic measures could be used to produce a single measure of wellbeing over a period of time. You could either pick a single question (such as How happy are you right now, or yesterday) or you can calculate an ‘affect balance’ by adding up all the positive scores and subtracting all the negative ones.Footnote ²² Or, altogether novel, you can analyse people’s social media activity (especially Twitter) and calculate the balance between positive and negative words or remarks.Footnote ²³ Or you can analyse Google searches.

Comparison of evaluative and hedonic measures

So which of the two preceding criteria is best for use as a guide to the choice of policies? As we argued at the beginning of the chapter, it self-evidently matters how people feel. This is extremely obvious when it comes to pain versus contentment/enjoyment (the ‘hedonic’ dimension of experience). But it also applies to how people ‘feel about their life’ (the ‘evaluative’ dimension).

As a measure of wellbeing, life satisfaction has many good features. First, it covers more than a day or two.Footnote ²⁴ Second, researchers and policymakers know what it means – it is based on a single question that they themselves could answer. Third, it is democratic – it does not require analysts to compile a list of indicators and then use their own arbitrary weights to produce an overall index.Footnote ²⁵ Instead, each citizen applies her own weights and tells us the result – how she feels about her life. And fourth, policymakers are used to asking people how satisfied they are with their services, so why not ask people how satisfied they are with their lives?

Hedonic measures are an even more direct measure of experience, but they are much more difficult to collect over a long enough period to be relevant to many basic social issues. They are, however, essential in analysing brief experiences – like a country walk or a game of tennis or a gig. And, as science develops, they will become easier and easier to measure (including via the use of biomarkers – see Chapter 5). So, in this book, we use both life satisfaction and hedonic measures but mainly life satisfaction. When possible, we report where the two approaches yield different results.Footnote ²⁶

Eudaimonic measures

The third wellbeing measure in common use is usually called ‘eudaimonic’ after the word ‘eudaimonia’ used by the Greek philosopher Aristotle. Eudaimonia is difficult to translate but it means literally having a ‘good demon’, which Aristotle understood, roughly, as having a rounded and virtuous character.Footnote ²⁷ So it includes the idea that virtue ought to be included in any measure of wellbeing. A typical question is ‘Do you feel that the things you do in your life are worthwhile?’

There are, however, two objections to this approach. First, virtue is difficult to measure. If you want to know whether someone is virtuous, you cannot find out by asking that person – the Nazis felt that what they did was positive and worthwhile. Second, in the wellbeing approach, virtue is a means to an end.

We want people to be virtuous for two reasons: it will raise the wellbeing of others, and it will often (though not always) raise the wellbeing of the virtuous person. So, for example, in Figure I.1, my wellbeing is higher if

1. (i) the people I meet – my ‘social connections’ – are virtuous, and

2. (ii) I myself have good altruistic ‘values’.

But these are just some of the many things that determine wellbeing – they are not part of the wellbeing outcome itself. To include virtue in the outcome is to confuse means with ends. We should study virtue deeply, but we should not include it in the measure of wellbeing.Footnote ²⁸ So, in this book, we do not use the eudaimonic concept of wellbeing.Footnote ²⁹ We rely mainly on evaluative and hedonic measures of wellbeing, which we also sometimes call happiness. As an aide memoir, Box 1.1 summarises the preceding discussion.

Can we believe self-reports?

As time passes, we shall undoubtedly get better at measuring wellbeing. Neuroscience will improve, and we shall also use more and more big data from sources like Twitter and Google. But do the questionnaires we currently use really supply any useful information? When we ask people these questions, are their answers accurate? Do they really mean anything, or do different people interpret the question and the scales so differently that their answers cannot really be compared? In other words, are the measures ‘reliable’ and ‘valid’ evidence on the thing they purport to measure.

On reliability, the question is ‘Do people give consistent answers when retested?’ In one study, the correlation between the two sets of answers two weeks apart was 0.55 for life satisfaction and 0.64 for net affect.Footnote ³⁰ This is not bad, but it shows that there is some noise in the data.

A quite different issue is whether the scale is a ‘valid’ representation of what we want it to represent, including whether different people use the scale in the same wayFootnote ³¹ There are at least four reasons to believe that people’s answers provide significant objective information about how their subjective wellbeing compared with that of other people in the same country.

The reporting scale

A different issue is exactly how people use the reporting scale they are offered (0,1, … ,9,10). Do they treat it like a metre rule, where the difference between 3 and 4 centimetres is the same size as the difference between 8 and 9 centimetres? This practice would make the scale an ‘interval scale’ (or what economists call a ‘cardinal scale’). Or do the points on the scale simply reflect a ranking of different mental states (making it an ‘ordinal scale’)?

So what would it mean to say the scale is cardinal? If we want to measure differences in the level of a sensation, the standard basic unit of difference is one that is just noticeable by the person experiencing it. In other words, the natural unit for sensations is the just-noticeable difference (JND).Footnote ³⁷ So we would call a scale an interval scale (or cardinal) if the number of JNDs between the answer 3 and the answer 4 were the same as the number of JNDs between 8 and 9.

Are they? There is a simple empirical test of whether the scale is cardinal: when people are asked and then re-asked to record their life satisfaction (0–10), the average absolute difference in replies should be similar at all points on the scale. It is.Footnote ³⁸ So there is good reason to suppose that people use the scale in a cardinal way, as we have defined it – apparently, respondents naturally reply as though the difference between 3 and 4 is as noticeable as the difference between 8 and 9.

We have already mentioned another relevant fact. Sometimes people are asked to score a variable not by selecting an integer but by selecting a point on a continuous scale (the ‘visual analogue’ method). Studies of the kind give very similar regression results to those using integer scales.Footnote ³⁹

So, when psychologists study sensations, they generally assume people treat the scale as cardinal (see Box 1.2 for further details). By contrast, it is difficult to see how respondents could use the scale (0–10) in an ordinal fashion. There would have to be a ranking of all their possible states of wellbeing, and they would then somehow divide this up into eleven ranges (0–10). However, since there is no concept of distance between one state and another, it is extremely difficult to see how they would undertake this process in any way that is consistent over time or across people.Footnote ⁴¹

Box 1.2 ‘Reporting functions’ in psychology

The study of sensations assumes that humans report their sensations in a cardinal fashion. It then addresses the question: How does their sensation relate to the intensity of external phenomena – like brightness? In other words, what is the ‘reporting function’ that relates the reported sensation to the external stimulus (measured in its own units)? For example, how does the reported brightness of light relate to its actual brightness measured in lumens per square metre of receiving surface?

In this case, the just-noticeable difference (JND) in brightness corresponds to a given proportional change in actual brightness (measured in lumens per square metre). Thus the ‘reporting function’ for brightness is

$\text{Sensation}=alog\text{Brightness}$

This is known as the Weber–Fechner effect. Similar ‘reporting functions’ have been found for the intensity of sound and indeed for many other things that can vary over a huge range from 0 upwards. But when the range of variation is narrow relative to the average (as with human height), the reporting function becomes roughly linear.Footnote ⁴⁰

These reporting functions are telling us how people report on an external phenomenon. When it comes to wellbeing, we are talking about something quite different – how people record an inner state. There is no obvious reason why they would not do this in the cardinal way we have described, and the science of psycho-physics assumes they do so.

So we shall assume throughout this book that different individuals use the scale in the same way, that the scale used is stable from period to period and that the scale is a normal one (like a metre rule).

What causes wellbeing?

So what determines their wellbeing? If we want to improve wellbeing (for ourselves or others), we have to know what affects it and by how much. To find this out we have two main sources of evidence. The first is surveys in which people are asked about their wellbeing – but also about many other aspects of their life. The relationship between wellbeing and these other things tell us how much different things matter to people. But precise causality is always difficult to establish from such surveys, nor do they tell us in any detail what we can do to make things better. For this, we need evidence from experiments where some people have received a particular treatment and their change in wellbeing can then be compared with that of a control group. In the last 40 years, evidence of both types has developed at such a rate that we now have the new science of wellbeing, whose findings are the subject of this book.

Wellbeing helps us achieve other valuable objectives

There are, however, many people who question the idea of wellbeing as the objective. We shall discuss this issue in Chapter 2. But even people who do not value wellbeing for its own sake should value wellbeing because it is an important means to many other objectives that they do value. Here are some striking examples.

• Education. Making children happier makes them learn better.Footnote ⁴⁴

• Health. Your wellbeing has a powerful effect on your longevity.Footnote ⁴⁵

• Productivity. Greater wellbeing increases productivity and helps with problem-solving.Footnote ⁴⁶

• Family/Social cohesion. Happy people create more stable families, and happy people are more pro-social.Footnote ⁴⁷

• Political stability. Wellbeing affects election outcomes more than the economy does. And unhappy people tend to support populist parties.Footnote ⁴⁸

• Charitable giving. Happy people give more to others.Footnote ⁴⁹

These consequences of wellbeing are of major importance. So throughout this book we shall discuss the two-way relation between wellbeing and the different aspects of human life.

To re-cap, the two relations are these:

• One relation is the effect of each aspect of life on overall wellbeing. This was displayed in Figure I.1, with the arrows pointing towards wellbeing.

• The other relation is the effect of wellbeing on each aspect of life. This involves a diagram just like Figure I.1 but with the arrows pointing in the opposite direction.

In this book, we look at both sets of effects, but our strongest interest is in the first relation: how wellbeing itself is determined.

Human needs

So let’s examine some basics about how wellbeing is determined and use this to explain the structure of the book. There is evidence that all human beings have similar fundamental needsFootnote ⁵⁰ and that their wellbeing can be (at least partly) explained by how well these needs are met.

A typical list of these needs includes:

• Food and shelter,

• Safety from attack,

• Love and support,

• Respect and pride,

• Mastery of what you do,

• Autonomy in what you choose to do.

Since 2005, the Gallup World Poll has surveyed representative samples of people in every country in each year. It asks about their life satisfaction and also whether their different needs are met.Footnote ⁵¹ The analysis confirms that satisfaction with life increases when more of these needs are met – and people are more satisfied both when their own needs are met and those of their fellow citizens. This confirms a common finding that wellbeing is contagious.Footnote ⁵²

But are some of these needs prior in importance to others? For example, if your life is physically hard, how important is it to experience respect and pride? According to Maslow,Footnote ⁵³ there is a hierarchy of needs (proceeding upwards from Physiological to Safety, Love and Belonging, Esteem and ultimately Self-actualisation): and the best strategy is to satisfy the needs by progressing up the sequence. Thus ‘respect is a disposable luxury when compared with food or safety’. Though hugely famous, there is little supporting evidence for Maslow’s hierarchy. The evidence from the Gallup World Poll is that when each need is satisfied, wellbeing improves. But having one need satisfied has little effect on the value of satisfying another need.Footnote ⁵⁴

How people interact with their environment

This book is about what determines how far our needs are satisfied. A first answer to that question is that it depends on the interaction between our genes (with which we enter the world) and our external environment – meaning by external environment the whole social and physical world outside ourselves. This is illustrated in Figure 1.3.

Figure 1.3 How genes and external environment determine wellbeing

But this gives the impression that the individual herself is a passive player in the drama, with the environment simply interacting with the person’s genes to produce the outcome. Yet in fact every human being has some degree of agency. We influence our own wellbeing in two key ways:

• By our behaviour, we significantly influence the situations we experience and the behaviour of others towards us.

• By our thoughts, we influence how these experiences affect us – both through our attitudes and how we think about our life.

Figure 1.4 tries to capture some of this. Outside us there is a given social environment, but how we experience it is hugely affected by what we bring to it. So the individual’s behaviour interacts with the environment to produce the individual’s experience. This experience then affects the individual’s wellbeing – but how much depends also on how she thinks. This process is repeated over and over again. At each phase, the person’s wellbeing feeds back into her character and behaviour in the next phase of her life (as shown in the dotted lines).

Figure 1.4 How the individual and the external environment interact to produce wellbeing

From this analysis it is clear that our wellbeing does not only depend on our social environment. It also depends on what we bring to the table, in particular

• our behaviour,

• our thinking and

• our genes.

In Chapters 3–5, we discuss each of these processes, before we discuss the details of the environment in Part III of the book.

What kind of a subject is wellbeing science?

Finally, what kind of a subject is wellbeing science? It is a new, emerging field, which is totally interdisciplinary. Many of the most important subjects that have emerged in recent years are interdisciplinary – subjects like molecular biology or human geography. But this one is rather special, because it provides a rationale for each of the separate social sciences: they are only important because they help to explain wellbeing. If you look at Figure I.1, you will see what we mean. For example, international relations are important because of how they contribute to human wellbeing, and so on. In this sense, wellbeing science could be the queen of the social sciences: it gives a role to each science by showing quantitively how its own outcomes contribute to the overall good.

But, as we shall see in the chapters that follow, there are four key disciplines that are most central to the study of wellbeing: psychology, sociology, economics and statistics.

• Psychology. The study of wellbeing started in psychology.Footnote ⁵⁵ Psychologists study how human nature works at the individual level, using both surveys and experiments. They study how individual personality, family experience and education affect wellbeing. They also study how to make things better for individuals (clinical psychology) and at work (occupational psychology). However, except for social psychology, psychologists tend to ignore the role of social norms and social structures upon human wellbeing.

• Sociology. That is where sociologists come in. They study, above all, the way people interact in groups and how that affects their wellbeing.

• Economics. Economics brings four main contributions. First, economists have always focused on wellbeing as the overarching outcome (calling it ‘utility’), even though they often have a rather narrow view of it and what causes it. Second, they discuss policy in terms of maximising that single outcome. Third, they distinguish clearly between the things people choose and the things that just happen to them (which they call ‘externalities’). And fourth, they bring understanding of markets, income and unemployment.

• Statistics. This is central to the preceding disciplines. When it is used to analyse the distribution of characteristics in a population, it is sometimes called epidemiology.

There are three other fields of study, which, though relevant, are not the same as the science of wellbeing.

• Behavioural science. In recent years, economists have been developing, jointly with psychologists, a deeper understanding of how people actually behave – a subject sometimes known as behavioural economics. But the study of wellbeing is a different endeavour. It does not study how to get people to behave in a certain way. It studies the results of behaviour and thus which behaviours would maximise social wellbeing.

• Health and wellbeing. This phrase, increasingly used, signifies a welcome extension of health science to include mental states as well as physical conditions. But it does not typically view wellbeing as the overarching good, with health as just one of many influences upon it. Wellbeing science, in contrast, studies the effects of everything in life upon the wellbeing of the population.

• Finally, philosophy. ‘What is wellbeing?’, ‘Is it all that matters?’, ‘How should it be distributed?’, and so on, are, of course, philosophical issues. We turn to these issues in Chapter 2. After that, the rest of the book is about the science of what causes wellbeing and how it can be improved.

Questions for discussion

1. (1) Is there anything more important than how we feel? Is wellbeing the overarching goal? If not, what is, and how should we weight multiple goals?

2. (2) What is the best way to measure wellbeing? Are these measurements ‘cardinal’?

3. (3) How does wellbeing science relate to other subjects you have studied?

Greece and Rome

We can begin with the great Greek philosopher Aristotle (384–322 bc). He, more than anyone, is responsible for the idea that there must be some ultimate end that we should aim at – with other things like wealth, health and good relationships being good because of how they contribute to that end. That is the hierarchical idea we already displayed in Figure I.1. The ultimate end he called ‘eudaimonia’, which he envisaged as a balanced, rational and virtuous state of being. He especially emphasised virtue, which he considered essential if your experience of life is to be truly fulfilling. He did not define virtue exactly as this book does, but he had a realistic modern empiricist view on how it should be acquired – by constant repetition and habit-formation.

Greek philosophers who came after Aristotle emphasised different aspects of his message. Epicurus (341–270 bc) emphasised the importance of a simple life, focused on things you really enjoy, like friendship and family life. Zeno the Stoic (333–264 bc) emphasised civic virtue and the ability to calm your mind whatever adversity befell you. The ideas of these two thinkers spread widely through the Roman world. Eventually, it was Stoicism that became the philosophy of much of the Roman middle class – and of the emperor Marcus Aurelius (ad 121–180), who wrote much about the secrets of happiness. Similar ideas had already been developed in China by Confucius and in India by the Buddha.

However, in the centuries that followed, Christianity brought in a quite different perspective. Happiness was still to be sought but only in the afterlife. In this world, the aim was virtue alone and this would bring happiness after death.Footnote ²

The eighteenth-century Enlightenment

It was only in the late seventeenth century that philosophers dared to re-establish happiness on earth as the goal of life. The great English philosopher John Locke (1632–1704) took it as axiomatic that people wanted to feel good and that to acquire that feeling was their principal motivation. But it was a Scotsman, Francis Hutcheson (1694–1746), who took the first huge step towards establishing happiness as the goal for society, rather than just for the individual. He taught that the moral thing to do was whatever produced ‘the greatest happiness for the greatest number’Footnote ³ – or, more precisely, what produced the greatest total happiness. And he argued that this is what any ‘impartial spectator’ would think.

From the wellbeing point of view, this idea was probably the greatest idea of modern times. It has three key implications.

1. (1) For judgements: If we want to compare two different situations and to say which is better, we should use the happiness of the people as the test. This would be so, for example, if we were asking which country is doing better, or whether the present is better than the past or which is the best way to spend public money.

2. (2) For individual action: If we ask, ‘What is the ethical thing to do?’, the answer is, ‘Whatever produces the greatest overall happiness’.

3. (3) For government policy: When we ask, ‘What should the government be trying to achieve?’, the answer is, ‘The greatest possible happiness for the people’.

As the eighteenth century progressed, these ideas took a firm hold among the educated classes in the English-speaking world, including in North America.Footnote ⁴ Thomas Jefferson, who drafted the US constitution, would write, ‘The life and happiness of the people is the first and only object of good government.’ But the writer who immortalised these ideas was the Englishman Jeremy Bentham (1748–1832) in The Principle of Morals and Legislation. In this book, Bentham argued that all actions should be judged by their consequences – by their impact on the happiness of everyone. In other words, actions should be judged by their ‘utility’. Thus Bentham’s concept of ethics, which is so humane, became known as ‘utilitarianism’, which makes it sound quite the opposite. (Similarly economics, which was founded by Adam Smith (1723–1790) to study the economic conditions for the greatest happiness, chose the word ‘utility’ to describe individual wellbeing rather than the word ‘happiness’).

During the nineteenth century, the principle of the greatest happiness inspired many major social reforms. It was forcefully presented by John Stuart Mill (1806–1873) in his book Utilitarianism and in his essay ‘The Subjection of Women’. However, he also proposed that some pleasures are intrinsically better than others (for example, poetry was better than the game of pushpin). This was in our view a confusion of means with ends. You will certainly be happier in general if you have a clear purpose in life (as we show clearly in Chapter 4). And you will make others happier if you are virtuous. But the ultimate test of a society is how happy people are (irrespective of how they became so).

During the nineteenth century, economists continued to focus on happiness as the ultimate test of economic arrangements, and the economist Edgeworth (1845–1926) foreshadowed the modern science of wellbeing when he talked about the need for a ‘hedonimeter’ – a technique to measure happiness in a cardinal fashion. In the nineteenth century, most economists believed that an extra dollar gives more extra happiness to a poor person than to someone who is better off. Similarly, in psychology, the great psychologist William James was primarily concerned with life as people experienced it from the inside.

Behaviourism

But then in the twentieth century, psychology turned away from the study of wellbeing – to behaviourism. Scholars like Ivan Pavlov and John B. Watson argued that we could not know what occurred inside people or how they felt. One could only study how they behaved and how this was affected by external stimuli. This doctrine soon impacted on economics, and in 1932, the economist Lionel Robbins asserted that we could not compare the happiness of one person with another.Footnote ⁵ Even for the same person, he argued, we could only rank different situations, A, B and C, in order; we could not say whether going from A to B gave more (or less) extra happiness than going from B to C.

The consequences for economics were serious. It became impossible to evaluate any issue involving income distribution. We could not say whether it was better if two people had $50,000 dollars each or if one had $20,000 and the other had $80,000. All that could be claimed was that a change was good if some people gained and no one lost (a so-called Pareto improvement). When, as generally happens, a change involves some gainers and some losers, economists, according to Robbins, could say nothing. But in fact, this did not stop them from pronouncing in such cases, and John Hicks and Nicholas Kaldor quickly provided what they considered a justification. They argued that, even if some people lose, a change is good if the gainers could have compensated the losers – even if they actually didn’t.Footnote ⁶ This was the so-called Hicks–Kaldor criterion for a welfare improvement.

This criterion also justified a second dubious practice: the use of national income (or gross domestic product, GDP) as a measure of national wellbeing. GDP is a measure of the scale of economic activity, the things that happen for which people get paid. In the national income, everybody’s dollars are added up regardless of who has them; and, if the national income increases, that is a Hicks–Kaldor improvement, even if many poor people have become worse off. But GDP was invented for a quite different purpose – by Simon Kuznets – as a way of analysing the business cycle and the fluctuations of unemployment. It was not meant to measure wellbeing. As Kuznets himself said, ‘The welfare of a nation can scarcely be inferred from a measurement of national income.’Footnote ⁷ There are two obvious reasons for this view:

• GDP adds up the dollars of rich and poor as if they are of equal value.

• GDP fails to include any source of wellbeing other than things you can buy. As Robert Kennedy put it, ‘GDP does not allow for the health of our children, the quality of their education, or the joy of their play.’Footnote ⁸

But despite all this, GDP per head became the totem of national success in the post-WWII period.

In recent years, there has, however, been a massive pushback against the idea that GDP is an adequate measure of national progress. In 1974, the economist Richard Easterlin used psychological surveys to show that wellbeing in the United States had not risen since WWII, despite massive economic growth.Footnote ⁹ And subsequent research has shown that economic growth is no guarantee of increased wellbeing (see Chapter 13). So it is not surprising that even before the economic slowdown in the West from 2008 onwards, there was increased public demand for a wider goal than economic growth.

Taking feelings seriously again

But key to the demand for a new approach has been our increased ability to measure wellbeing and to understand its causes. The key figure here has been Edward Diener (1946–2021). Beginning in the early 1980s, he showed that wellbeing could be effectively measured and explained.Footnote ¹⁰ As time went on, more and more psychologists joined this enterprise, including Daniel Kahneman who in 2002 won the Nobel Prize for Economics. Economists also joined in, using large population surveys to throw light on the effect of different experiences upon individual wellbeing.

At the same time, ordinary citizens have become increasingly aware of their own mental states and interested in how to improve their own feelings. Two forces are at work here. The first is cognitive psychology (embodied in cognitive-behavioural therapy) and the second is mind-training techniques imported from the East. We discuss both at length in Chapter 4.

Wellbeing over time and WELLBYs

Of course, most decisions affect wellbeing over a period of time. For example, decisions affecting the climate will affect generations yet unborn. So we need a social welfare function that enables us to find the best path of wellbeing over the future and not just in the current period. So how should we value future wellbeing?

An obvious starting point is that the wellbeing of every human being in every year matters equally. However, since there is major uncertainty about the future, we should slightly discount the wellbeing that could be expected in future years – by multiplying wellbeing in t years hence by ${\left(1-\delta \right)}^t$ where δ is the discount rate per annum. (In Britain, the official value of this ‘pure time preference rate’ is 1.5% per annum).Footnote ¹³ In proceeding in this way, we are assuming that a person’s suffering in any one year is equally important, whether or not the rest of their life is happy.

On this basis, intertemporal social welfare (S*) becomes simply the discounted sum of all future wellbeing, whoever is experiencing it:

$\text{Future Social Welfare}=S^{\ast }=\begin{array}{c}\Sigma \\ i\end{array}\begin{array}{c}\Sigma \\ t\end{array}{\left(1-\delta \right)}^t{W}_{\mathrm{it}}$(2)

So if we want to decide whether a policy change is desirable, we should evaluate whether the following expression is positive:

$\Delta S^{\ast }=\begin{array}{c}\Sigma \\ i\end{array}\begin{array}{c}\Sigma \\ t\end{array}{\left(1-\delta \right)}^t\Delta W_{\mathrm{it}}$(3)

To make this practical, we have to decide on the length of each period. If we take it as a year, $\Delta W_{\mathrm{it}}$ would be the change in wellbeing for person i in year t. In other words, it is a change in Wellbeing-Years (or WELLBYs). So when we come to methods of policy evaluation in Chapter 18, the key issue will be how a policy affects the number of (discounted) WELLBYs.

Sustainability and climate change

Thus the wellbeing approach provides a comprehensive framework for considering the future of our society from the smallest choices to the biggest. Of these, the biggest of all is the future of the planet. A central issue here is the wellbeing of future generations.Footnote ¹⁴

Wellbeing science favours a low discount rate, so that what happens to future generations is really important when we decide what to do now. The only legitimate reason for discounting future wellbeing is ‘pure time preference’, based on uncertainty about the future. Typical rates of pure time preference are 1.5% a year. By contrast economists mainly analyse the future in terms of levels of real income. They generally assume that real incomes will rise steadily, which will reduce the impact of extra future income on future wellbeing. They therefore discount future income by at least 3.5% a year – making the future appear much less important relative to the present.Footnote ¹⁵ So it is not surprising that those who want everything analysed in terms of wellbeing find strong allies among those who want more attention to the future of the planet. For both groups, sustainability is crucial.

Length of life and the birth rate

There is one further issue – the issue of life and death. One way to increase future social welfare (as in equation 2) is to help people live longer. If someone lives longer and has wellbeing greater than zero, that increases social welfare.Footnote ¹⁶

But can we also increase future social welfare by increasing the birth rate? If we could, it would be one of the least expensive ways of increasing future social welfare, and we would therefore choose to do it even if it decreased the number of Wellbeing-Years (or WELLBYs) per person born. John Stuart Mill rejected the idea that social welfare depended on the size of the population, and we shall focus instead on the number of WELLBYs per person born.

Today’s medical policy-makers have adopted the same approach. Their aim is to produce the highest possible number of Quality-Adjusted Life Years (suitably discounted) for each person born.Footnote ¹⁷ We shall follow this approach. So when we use equation (3) to evaluate a policy change, we do not include in our evaluation any effect of the policy change upon the number of people born.

How egalitarian should we be?

We have thus far adopted the stand of classic utilitarianism – that all that matters is average lifetime wellbeing, regardless of how unequally it is distributed. This means that the following distributions of wellbeing are of equal value:

But today many people are more egalitarian than Hutcheson and Bentham were and believe that it is more important to raise the wellbeing of the least happy people than to raise by an equal amount the wellbeing of those who are already quite happy.Footnote ¹⁸ In other words, the social value of i’s wellbeing is not identical to W_i. Instead, it rises with W_i but it rises at a declining rate. So the social value of W_i is a ‘function’ of W_i, f (W_i), which has the property we have just described.Footnote ¹⁹ And social welfare is the sum of f (W_i) added up across all members of society. Thus,

$\mathrm{For}\text{egalitarians}:S=\begin{array}{c}\Sigma \\ i\end{array}f\left(W_i\right)\left(f^{\prime }>0,f″<0\right)$(4)

There are thus two alternative concepts of social welfare that we could use to decide whether one situation is better than another. Which of them should we use? In choosing between the Benthamite (or strictly ‘utilitarian’) view and the more egalitarian (or ‘prioritarian’) view, a good approach is the one pioneered after WWII by Jan Harsanyi and John Rawls.Footnote ²⁰ In this approach, we imagine ourselves in an ‘original position’ behind a ‘veil of ignorance’, not knowing which actual human being we are going to be. We then ask ourselves to choose between different situations, not knowing who we will be in each situation.

So how would we evaluate different situations? Egalitarians who use this framework believe that most individuals have a degree of risk-aversion. They would not therefore evaluate a distribution of possible levels of wellbeing entirely according to its average value. They would also look at the spread of the possible outcomes. And they would prefer prospects where the probability of experiencing low wellbeing was low. In other words, for any given average wellbeing in the population, they would prefer a more equal to a less equal distribution of wellbeing.Footnote ²¹ The simplest way to represent this set of values is by a concept of social welfare of the type we have already described, $\begin{array}{c}\Sigma \\ i\end{array}f\left(W_i\right)$ where the social value of additional W declines as W increases.Footnote ²²

If one accepts this argument, the issue is then ‘How fast is the decline?’Footnote ²³ The most extreme view is one inspired by the work of the Harvard philosopher John Rawls.Footnote ²⁴ In this view, the decline is so sharp that the only thing that really matters is the wellbeing of the least happy person. So the social welfare equals the wellbeing of the least happy person.

$\mathrm{For}\text{followers of Rawls}:S=Min\left(W_1,\dots ,W_n\right)$(5)

A less extreme view is that the only thing that really matters is the number of people below some acceptable level of wellbeing.Footnote ²⁵

Choosing a social welfare function is not a scientific matter – it involves normative considerations, even if we try to solve the issue by ‘positive’ thought experiments or by surveying the population. This is why, however much the science of wellbeing improves, there will always be a spread of views on the exact definition of social welfare.

Therefore, the most practical approach in any choice situation is to begin by first examining the difference in $\begin{array}{c}\Sigma \\ i\end{array}{W}_i$ and then seeing how far the result would be altered by varying assumptions about the form of $f\left(W_i\right)$.Footnote ²⁶ A further practical step is to begin the search for new policies in those areas of life that account for the greatest amount of misery (on which Chapter 8 provides relevant evidence).

Consequentialism and rights: The fat man

The first criticism is that we only take into account the consequences of actions (even though we do include in that the experiences that occur during the action itself). Critics often use the following example.Footnote ²⁷ You are on a railway bridge. You see a train approaching from one side of the bridge, while down the line are five people on the track who will be killed by the train. However there is a fat man sitting on the bridge. Should you push the fat man to his death in order to save five others?

The calculus says there would be a net gain of four lives from this action (5 minus 1). So is it the right thing to do? Critics argue that the wellbeing approach says Yes, and this shows that the wellbeing approach is inadequate. However, how would millions of people in our society feel about their own lives if such actions became acceptable? Clearly, society has to have rules that make its members flourish. The philosophy of utilitarianism thus has two functions.Footnote ²⁸ First, it helps us to choose the rules we should generally follow, and second, it helps us to decide when we should break the rule (for example, when we should lie to protect a Jew in hiding from the Nazis).

Some of the rules will be moral principles we teach our children, while others will be rights enshrined in law. We will teach our children to be kind because that makes other people feel better. But we also need legislated rights, especially for minorities. If we wish to prevent misery, we have to establish many legal rights. But these are deliberate legislative acts designed to promote social welfare; they are not the recognition of some pre-existing ‘natural rights’.Footnote ²⁹ The only natural right is that each individual’s feelings count equally.

The experience machine

But are good feelings the only things that matter? In 1974, the Harvard philosopher Robert Nozick questioned the primacy of feelings by posing the following hypothetical question: ‘Suppose there was an “experience machine” you could link up to, which would make you feel anything you desire and which was equally available to other people. Would you link up to it?’Footnote ³⁰

Many people say No. They say it matters that the experience is real. But what if the real experience was awful and that we reverse the sequence of the question. So imagine you are having a lovely time in the experience machine and are offered instead the real experience of solitary confinement in a rat-infested cell. Which would you choose?Footnote ³¹

A more likely possibility is that scientists come up with a drug that makes everybody feel better and has no bad side effects. This issue was raised in a striking form by Aldous Huxley in his book Brave New World. In it he has people taking soma to make themselves feel better. This was meant to appal the readers. But most people throughout history have used alcohol or other substances to improve their mood. The problem has been that all known substances of this kind also bring bad side effects. But it may be hard to object to a substance that improves mood without any bad side effects.

Adaptation

Then there is the issue that our feelings adapt (see Chapter 3). Most people adapt to hardship to a considerable extent, so that it causes less misery than might be expected.Footnote ³² If we take this fact into account, critics say, we shall do less to reduce hardship than we should.Footnote ³³ But this does not follow, because people who are more fortunate also adapt to their good fortune. So if we take from the privileged and give to the deprived, the privileged will also suffer less than might be expected. Thus the case for redistribution is hardly affected by the fact of adaptation: the poor may gain less extra wellbeing from it than might be expected, but the rich also suffer less than might be expected.Footnote ³⁴ The balance of the argument is thus unaffected.

However, adaptation does have important implications if some experiences are less subject to adaptation than others. It is therefore important to distinguish between hardships that cannot be adapted to and those that can be. Hardships that are hard or impossible to adapt to include mental pain, chronic physical pain, incarceration, torture, indignity and intolerable noise.Footnote ³⁵ These types of hardship need high priority in public policy.

Selfishness is encouraged

Critics often complain that, if we accept wellbeing as the supreme goal, this means that individuals should simply maximise their own wellbeing. Far from it. For each person’s wellbeing depends hugely on the benevolent behaviour of others. This is illustrated in Figure 2.1.

Figure 2.1 How wellbeing is determined by behaviour

In this profoundly important diagram, the outcome we care about is the overall wellbeing of society, represented by the whole right-hand side of the diagram. How can it be maximised? The answer is: only if everyone chooses to behave so as to maximise the overall wellbeing of society. That is the fundamental ethical principle proclaimed by Bentham and by all other supporters of the greatest happiness principle. This aspiration should inform a person’s whole life – both in private matters and also in the job they choose to do. In this view, morality is not just about what you should not do but also what you should do. For example, it is wrong to hurt someone but it is also wrong not to help them.

Some people say this is too ‘demanding’Footnote ³⁶ – it takes over too much of your life. As with all other moral theories, it is hard to specify exactly how far we should sacrifice our individual happiness for the sake of others. But, if we want to reduce suffering, we clearly have to avoid not only hurting people (sins of commission) but also failing to help them (sins of omission).

To encourage good lives, we have two key psychological traits we can build on. The first is the pleasure that people derive from helping others: doing the right thing is not always pleasurable but it often is (see Chapter 3). The second is the impact of norms on habit. If people are expected to behave well from an early age, it just becomes a habit. This was the route that Aristotle stressed.

Both of these routes are at variance with the doctrines of Immanuel Kant, the great philosopher of the German Enlightenment, which provide the main alternative system of ethics to that based on the maximisation of wellbeing.Footnote ³⁷ In the Kantian system, the ethical rightness of a person’s actions are judged by the person’s motives and not by their consequences. A moral action has to be a conscious act of will, and pleasure and habit are considered antithetical to truly moral action. There is, however, one key feature on which both Kantian and Benthamite approaches are agreed: every individual is of equal ultimate importance. This is fundamental to any ethical theory based on reason.

The nanny state

Turning to political theory, critics of the wellbeing approach sometimes claim that, if the government concerns itself with how people feel, this will lead to excessive interference in people’s lives. But wellbeing science itself shows the huge importance of freedom for personal wellbeing (see Chapters 8 and 16). So any government aiming at wellbeing will be constantly restrained by that consideration. Whenever possible, the government will provide opportunities that people can use or not, as they prefer.

It is, however, crucial to realise that many of the things that matter most to people are intensely personal (their mental health, their family relationships and their work situation) and failures in these dimensions are major sources of human misery. So a benevolent state is bound to offer help, if there are cost-effective forms of help that can be made available.

Social justice

A final problem is one that affects all ethical theories – how much weight to give to the interests of the least fortunate. Classic utilitarianism can be criticised because it gives equal value to more happiness whether it accrues to someone who is already happy or to someone who is miserable. But the ‘prioritarian approach’ we advocated earlier avoids this problem, and it provides a stronger basis for the legal creation of rights. It also asserts that income inequality is bad because an extra dollar is worth more to a poor person than a rich one. So a good society establishes rights (as a form of safety net) and it redistributes income.Footnote ³⁸

No ethical theory is without problems. If you find the wellbeing approach problematic, can you think of a better criterion for how to live or how to make policy?

We can end with a different question. Is wellbeing an experience that humans were designed for? The answer from ‘evolutionary psychology’ is ‘Partly yes and partly no’. The basic features of human nature were created by natural selection about 200,000 years ago in Africa. The genes that survived in the struggle for survival were those that maximised our ‘inclusive fitness’ – in other words, the genes that were most likely to produce successive generations carrying the same genes. So how conducive to wellbeing were the genes that got selected? We were certainly constructed to enjoy many of the things necessary for survival and reproduction – sex, food, drink and a capacity to cooperate (see Chapter 3). Moreover, as we have seen, wellbeing is extremely good for many other things that are good for our survival – good for our physical health, for our productivity and for our creativity.Footnote ³⁹

There were, however, some traits that were essential for survival in the Savannah that are not particularly conducive to an enjoyable life. The most obvious of these is anxiety. If lions are about, it is a good thing to be anxious. But life today is a lot more safe, and most people would have a more enjoyable life if they were less anxious (see Chapter 4).

As this book shows, we have the knowledge to improve our own wellbeing and that of others – a noble cause.

Questions for discussion

1. (1) Do you agree that coherent policy-making requires some single overarching criterion? Should this be wellbeing?

2. (2) Should the same idea govern our personal ethical choices?

3. (3) Should the social welfare function be the simple sum of wellbeing across people? Or should it give extra weight to the scale of misery?

4. (4) What is your view on the main criticisms made of the wellbeing approach to ethics and policy choice:

   • Consequentialism, rights and social justice

   • The experience machine.

   • Adaptation

   • Selfishness

   • Nanny state