Bryan Caplan  

Freedom for Happiness

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From my WSJ review of Nick Powdthavee's The Happiness Equation:

Mr. Powdthavee deserves credit for concluding his book with some of the big questions: "Is happiness overrated?" "Should government force people to be happy?" But he neglects the many ways in which government could sharply increase happiness by intervening less.

For instance, happiness research makes a powerful case against European-style labor-market regulation. For most economists, the effect on worker well-being is unclear. On the one hand, regulation boosts wages; on the other, it increases the probability that you will have no wages at all. From the standpoint of a happiness researcher, however, this is a no-brainer. A small increase in wages has but a small and ephemeral effect on happiness. A small increase in unemployment, by contrast, has a massive and--unlike most other factors--durable effect on happiness. Supposedly "humane" regulations to boost workers' incomes have a dire cost in terms of human happiness.

At the other end of the political spectrum, consider immigration. The most pessimistic researchers find that decades of immigration have depressed native wages by about 5%, total. The effect of immigration on Third World migrants' wages, by contrast, is massive: One recent paper finds that allowing a Haitian to take a low-skill job in the U.S. increases his earnings 10 times. If you care about happiness, the implication is clear: Government should get out of the way.

The final factoid comes, of course, from Clemens, Montenegro, and Pritchett's "The Place Premium."  Unfortunate my full-length shout-out didn't make the final cut.


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COMMENTS (6 to date)
Peter writes:

Are we really to the point that we actually have to say out loud: "If you care about happiness, the implication is clear: Government should get out of the way."

Government can do many things, but happiness is not one of them. The closest it can come is the warm fuzzy feeling our national defense provides.

Happiness comes from within the self.

Kris writes:

Here's an idea, make Wednesdays a part of the weekend. People are over worked to only have their retirement accounts washed away in economy blizzards. One day in the middle of week would make people happier, and cause people to spend more on what they want to do. Those with kids wouldn't have to deal with their children until they get out of school so in effect, it will probably save marriages as well.

What's life if you're not living?

Michael Strong writes:

"the many ways in which government could sharply increase happiness by intervening less."

One of my primary themes is that we should "Legalize entrepreneurship in happiness and well-being." As an education entrepreneur who, in some respects, focused on creating schools at which students experienced significantly greater happiness and well-being than the norm, while learning positive habits that are likely (according to happiness research) to lead to greater lifetime happiness and well-being, it has always struck me as an outrage that, thanks to government, it is easier to innovate in the fields of gambling and pornography than in the fields of education and health care.

For more see:

http://www.edspresso.com/index.php/2006/07/legalizing-markets-in-happiness-and-well-being-michael-strong/

as well as the chapter on Happiness and Well-Being in "Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems."

Michael Moore writes:

Right on!

The way I try to give people who I am conversing with an incentive to consider my view is by talking about how much happier I have gotten since mastering econ101.

I also do it to try and make them self-aware of their cognitive dissonance (the will to believe A though evidence supports ~A)

Just as being free from Racism is joyful, so to is it joyful to be free from market-hate. That part I don't tell them

Dan writes:

Bryan, I think you're absolutely right that happiness should be a key metric in evaluating public policy. Although, I think government getting out of the way may not always be the best way to get there. If you're interested I look at maximizing wellbeing with government intervention at my blog: http://danbraganca.com/2011/08/16/libertarian-case/

Arthur_500 writes:

We absolutely cannot let government get out of the way. We need government regulations.

the average person is too ignorant to understand what happiness is. therefore it is the responsibility of government to do what will be necessary to make us happy.

Some smoke cigarettes because they are too ignorant not to realize life is better without them. then government will keep a terminal patient alive at all costs because they are too ignorant not to realize that being a vegetable is preferable to death.

Periodically a medical professional will remove all the drugs a patient is on and add them back only as necessary. They often find one medicine has been used to solve an interaction among other medicines.

I would suggest that we should really go drastic and cut out a lot of what our government is involved in. I believe that desired services will be picked up by the private sector.

Then if we feel the need to help people out we give them an allowance and let them use it well or suffer from not doing so. Now government isn't making those choices but the individuals.

After all, if government is "of the people" then I posit that our politicians really aren't smarter than the rest of us in chosing our happiness.

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