Happiness: a review

Richard Layard wants to improve my moribund sex life. He wants the government to compel Kathy Sykes to shag me.

This is the natural inference from the crude utilitarianism he proposes in Happiness. He says (p115): “the greatest happiness is the right guide to public policy.” He adds that there are diminishing returns to good things; if we have little of them, a small increase makes us happier, whereas if we have a lot, a small decrease doesn’t make us much less happy. He says (p52):

If money is transferred from a richer person to a poorer person, the poor person gains more happiness than the rich person loses. So average happiness increases. This means a country will have a higher level of average happiness the more equally its income is distributed.

What’s true of income might be more true of sex. As Layard rightly says, people adapt to higher incomes. Maybe they don’t adapt so quickly to better sex lives.

By Layard’s logic, then, sex should be transferred from people getting a lot, to those of us not getting much. Forcing Professor Sykes to have sex with me would greatly increase my welfare (and possibly hers), far more than it would diminish her partner’s well-being. It would therefore improve aggregate happiness.

Now, every idiot knows there’s an objection to this. It would violate Professor Sykes’ rights, if not her interests.

And every idiot also knows that libertarians believe there’s a rough analogy between forced sex and taxation. In both cases, the state is using someone’s body for ulterior purposes. It violates rights. It “doesn’t take seriously the distinction between persons”, to use Rawls phrase.

What does Layard do about these well-known objections? He ignores them. He scandalously misrepresents libertarians, saying they object to redistribution because it panders to envy (p153). This, he says, “is an extraordinarily weak argument.” Indeed it is – which is why intelligent libertarians don’t use it.

Layard’s one page discussion of rights (p123) is just useless. Rights, he says, can be justified as means of increasing happiness. He concedes that they should not be violated “even if that would sometimes produce more happiness in the short-run.” But this, of course, begs the question: is there a right to be free from forced labour? And if not, why not? Arguing that there shouldn’t be such a right because it would subtract from happiness is just circular reasoning.

This ignorance of critics’ arguments wouldn’t be so lamentable if Layard defended utilitarianism well. But he doesn’t. There are other deficiencies:

1. He elides the question: can there be enough interpersonal comparisons of well-being to make utilitarianism useful for policy purposes? Does it really follow from the claim that happiness is an objective quantity that it is interpersonally comparable?

What matters for policy purposes is not happiness as measured in laboratories. It’s happiness over people’s lifetimes, as this, not momentary well-being, is the proper object of policy; it would be absurd for the government to intervene every time someone feels a little down in the dumps.

In this context, it might be worth distinguishing between utilitarianism as a moral guide for individuals and utilitarianism as a political ideal. I (might) know enough about my friends and family to make interpersonal comparisons between them. It doesn’t follow that the state knows enough about its citizens to do so.

2. Layard’s one-page discussion of consequentialism (p119) is also inadequate. His only concession or awareness of the problems of bounded rationality or limited knowledge comes when he says:

Forecasting is of course difficult in ethical decisions as it is in business decisions. This is no argument against forecasting, but clearly we should give special weight to the earlier and more forecastable results.

This fails to acknowledge that our inability to forecast consequences can render utilitarianism useless as a guide for policy. Take the war in Iraq. Utilitarians can reasonably disagree on whether this was a good thing or not. But Layard’s advice to give special weight to earlier results is little help. How do we weigh the deaths and injuries of tens of thousands of people against the freedom (hopefully but not certainly for many years) of tens of millions?

I suspect Layard’s true view on these questions is given away on p145. In a different context, he says: “the different experts need to put their heads together.” Pure managerialism.

3. Layard seems to assume that utilitarianism is the solution to the problem of how to trade-off different goals. He says (p112 and 225):

The problem with many goals is that they often conflict, and then we have to balance one against the other. So we naturally look for one ultimate goal that enables us to judge other goals…Happiness is that ultimate goal….No-one has proposed any other ‘ultimate’ principle that could arbitrate when one moral rule (like truth-telling) conflicts with another (like kindness).

But he is utterly silent on the problem of incommensurabilities. What if goals and values are just incommensurable? Of course, we’d like this not to be the case. But wishing doesn’t make it so. Layard just assumes this problem away. Again, this is pure managerialism.

Layard’s utilitarian argument for redistribution, then, fails. But he has another argument for it. Income taxes, he says, would deter the status race. He says (p47):

If I work harder and raise my income, I make other people less happy [because their income and status falls relative to mine]. But when I decide how much to work, I do not take this ‘pollution’ into account. So I will tend to work more than is socially efficient – and so will everyone else.

Income taxes, he claims, reduce this inefficiency. Again, this is way too glib. As every undergraduate knows, income taxes have ambiguous effects on incentives. Yes, there’s the substitution effect – taxing work makes us take more leisure. But there’s also the income effect – high taxes mean we have to work longer to get the same income.

Layard assumes that the substitution effect dominates here. Maybe he’s right. But he gives us no empirical evidence – a curious omission for a man who made his name as a labour economist.

If he’s not right, though, his argument collapses. Higher taxes would lead to longer working hours and a worse work-life balance – something he believes is valuable (p85). They would also increase status envy, if we compare pre-tax rather than post-tax incomes; this is an important distinction, on which Layard is silent.

These are not the only problems. Layard says (p117) that a happy society must be founded on “the greatest level of sympathy for others.” But wouldn’t high taxes undermine this sympathy, by causing resentment and breeding the feeling that one is being ripped off?

But there’s a more basic objection here. It’s that Layard’s premise – that if people work harder and raise their incomes they make others less happy – is just wrong.

It ignores the fact that in working harder, people aren’t just raising their incomes, but are increasing their output. And this makes others happy.

Return, as we should, to Kathy Sykes. If she works harder and makes another TV programme, does my happiness fall because I resent her higher income? No. It rises because I like seeing her on TV.

Now, I’ll grant that this is not always the case. Layard’s own hard work has not increased my happiness. But this, surely, is an exception.

I’ll just mention another problem. Layard says, rightly I think, that “each individual knows more about himself than anyone else does” (p231). And he also says that happiness depends on your inner life, and that we can “train ourselves in the skill of being happy” (p189).

What, then, is the need for higher tax? Mightn’t the status race be merely a temporary, if long-lasting, disequilibrium – the result of people not yet knowing enough about themselves?

A little autobiography here. In my 20s, I was income- and status-conscious, and I worked harder than was good for me. But in the 30s, I learnt more about myself, and took a less well-paid but more satisfying job. Taxation would not have been the solution to my unhappy state – self-knowledge was. It's difficult to justify taxing the rich because people slightly less well-off don't have the self-knowledge not to be envious.

Layard’s book, then, reminds me of the title of a little poetry anthology written by Wales manager John Toshack – gosh, it’s tosh. It completely fails to engage the critics of utilitarianism; scandalously for an economist, there’s no mention of Kolm’s Modern Theories of Justice or Roemer’s Theories of Distributive Justice, two of the most sophisticated recent discussions of the subject. It’s the sort of book that would convince only someone who was already slack-brained enough to believe such nonsense.

But Layard is an intelligent man. Why would an intelligent man produce such a feeble effort? Here are two clues.

First, he ignores good arguments for redistribution, such as Rawls pooling of talents or Dworkin’s insurance-type arguments. He claims, absurdly, that utilitarianism offers the “strongest” argument for redistribution (p120).

Second, he cringes towards authority. On p226 he says:

Policies that encourage trust are…extremely important. These include moral education in schools, and policies to build stable families, communities and workplaces.

He doesn’t mention policies that would restrain or overthrow those in power. Bosses and politicians are untrustworthy. But Layard provides no solution or alternative to them. He’s a power-worshipper.

Could it be that Happiness is an exercise not in intellectual enquiry, but in appealing to power? Layard might have judged that Gordon Brown will be next Prime Minister, and he wants to be an intellectual guru to the powerful. To this end, he’s offering a defence of high taxes which ignores the embarrassing liberal baggage of Rawls and Dworkin and is more consistent with big government. It’s difficult to see another justification for the book.

Comments

[dearieme]

"Economics: from Adam Smith to Ken Dodd" - there's a PhD in that.

[Blimpish]

Can you send her round mine afterwards?

[Tim Worstallt]

Blimp...seconds? Yurgh!.

I’ve been looking back at this Robbins lectures, where he lays out what he thinks is the correct level of taxation for this optimally happy society (don’t know whether it is in the book, would love to know) and it’s 60% marginal rates (adding direct and indirect) on incomes over about 10k. As we currerntly have higher than that (adding excise taxes) we appear to be over taxed by some 70 odd billion, or 7 % of GDP. Sounds aboutright to me, but I don’t think that’s quite the point he wanted to make.

[Blimpish]

It's a trade-off, Tim. Only a managerialist would suggest I can have my Sykes and get first go. On this blog, surely we know better. Chris gets first dibs because (a) his idea and underpinning analysis; (b) home owner; (c) age before beauty; and (d) I'm trying to make him see that Right-wing elitism's the way forward - so he needs to see the benefits.

I just thought of a very bad joke. But taste and decency suggests I go no further.

[Monjo]

There was the OECD figure that suggestion an above-average income worker who was married (to a non-working spouse) and had 2 children paid roughly 70pc of every £1 earnt over the average as tax. [Yesterday's Daily Mail published it]
I guess this would help explain why so many middle-class married men are so miserable.

[Robert schwartz]

Is Kathy Sykes a "plaggy hootered minger?"