Who last said that Ireland was a happier society on account of recent strong economic growth? Certainly, 50 years after the declaration of a republic, Ireland is not yet ready for the next step and to declare itself Utopia. A lot more people want to point out how Ireland has actually got worse than argue it is a better and happier place.
You can, as they say, barely open a newspaper without reading the sort of "How come?" questions posed by the Greens at their party conference. In the midst of economic success, how come the suicide rate is up? How come stress is up? How come traffic is worse? How come houses are not affordable? How come wide inequality persists? How come begging and homelessness have increased? These are legitimate questions. No doubt they will fill the responses to a letter in last Saturday's paper inviting submissions to the Irish Catholic Bishops' Conference for its preparation of a pastoral letter. It will focus on "Christian faith and values in a time of rapid economic expansion". The document, it is hoped, "will help develop a common commitment to ensuring that our increased prosperity is used to enhance the quality of life, in a meaningful sense, for everyone". For present purposes, assume that "to enhance the quality of life" means to increase happiness. If our economic growth has led to increased quality of life, increased happiness might also be expected. On the other hand, if the negative side effects of growth are so great, then our society may have become less happy. Has growth made us happier? An interesting analysis about happiness, economy and institutions was reported last week in the Econo- mist. Using "reported subjective well-being" as a definition of happiness, two Swiss economists in a paper reviewed some of the literature on the subject. Studies have shown that "unemployment is correlated with substantial unhappiness". No surprise there.
What is less obvious is that the relationship between income and happiness is weak. An increase in income leads to a very small increase in happiness. Indeed, a key analysis concludes, "an enormous amount of extra income would be required to compensate people for having no work". In general, the results of that analysis show that "happiness is high among those who are married, on high income, women, whites, the well-educated, the self-employed, the retired and those looking after the home. Happiness is apparently U-shaped in age (minimising around the 30s)". So that's why they made Thirtysomething.
Inflation damages happiness more than loss of income. Another study concludes, "One percentage point of inflation corresponds to a well-being cost of approximately 2 per cent of the level of income per capita".
What these studies suggest for Ireland is that recent increases in employment, decreases in unemployment, and the maintenance of low inflation, should have made us a happier people (at least, more likely to report "subjective well-being"). They imply that the key standards by which our economic performance should be measured for the achievement of happiness are, after all, employment and inflation. They mean that criticism which focuses on income distribution within Ireland misses the point about the creation of a happy economy. Employment matters hugely more than income levels. The Government ought to be congratulated if it focuses on getting people back to work rather than flattening out income levels. The former will make people a lot happier, the latter will have only a tiny effect on happiness.
We don't even use the term, "a happy economy". We speak of a just society, an equal society, but not so much a happy society. The achievement of a happy society is surely an important social objective. What if these economists of happiness are right and changes in income levels don't make people much happier? It would imply that the achievement of a more income-equal, a more just society, would leave us not much happier. Their analysis would also imply that the first duty to happiness in the economic area is to enable the creation of employment, and that the job-creating private sector should be recognised as the engine of a happy society.
This is not what I expect submissions to the Catholic Bishops' Conference to say. It would be useful for them and for social policy critics to review some of the literature on happiness and the economy. It might also check the common inclination to point out that every silver lining in our economy has a dark cloud inside it.
Oliver O'Connor is an investment funds specialist
