Federal Reserve Chairman Ben Bernanke declares that economists should focus not just on material benefits from economic activities. They should study the enhancement of individual well-being, of happiness as well.
Indeed, the famous Greek philosopher Aristotle said that happiness is “the most noble, and most pleasant thing in the world.” Aristotle could easily have added: Nothing exceeds the happiness that flows from the fruits of one’s honest efforts. Because it is widely seen as a means to happiness, economists tend to emphasize the consumption of goods and services as the overwhelming goal in living.
But coupled with this is the fact that journalists and pundits are strongly inclined to dooming people in poverty to perpetual unhappiness, a Marxian quagmire of hopelessness with never-ending welfare. Not only is this outlook mistaken, it tends to promote despair and defeatism among these less fortunate.
FOR EXAMPLE, the journal Science recently reported the results of an experiment involving the movement of 2,000 low-income families from poor areas into mixed-income neighborhoods. Interestingly, while no improvements in their economic well-being were found, a surprisingly significant increase in happiness was readily apparent. Evidently, among the poor there is opportunity for expanding their quality of life without necessarily achieving significant material success.
Moreover, it is not well-known that, had Bernanke’s suggestion been heeded by White House economists, a very controversial decree by President Obama could have been avoided: the one revoking the successful welfare-to-work program.
This program, instituted by the Clinton administration, mandates that at least half of welfare recipients be working, or in training to improve job skills, to be eligible to receive benefits. By executive decree, and if states opt to do so, Obama has suspended this part of the requirement. Such a decree hardly increases recipient incentives to enhance well-being.
We begin our lives with unequal resources, talents and skills. With proper incentives we engage in education, training and the gaining of experience, which help overcome these limitations. Each step leads to increases in immediate satisfactions and to happiness. Ultimately, these processes bring increases in income which, if saved, leads to long-run improvements in personal wealth as well.
The belief that these successes – these little steps to higher levels of satisfaction – are not within the reach of the poor is one of the biggest myths of our current political-journalistic culture: needlessly discouraging individuals from attempting to move forward, thus denying them the happiness from achieving even minor successes – or, as the hackneyed expression has it, the “simple things in life.”
IN SUSPENDING this program, it is difficult to think of a more crippling deterrent to the development of self-improvement incentives among the poor. It also denies them the opportunity to realize the fruits of their honest efforts – the modest successes and increases in pride, and the satisfactions and happiness that the program provides.
In our lifelong search for happiness, very few of us hit home runs. But the view that most of the poor are consigned to a life of unending despair not only is discouraging but false, and breeds needless feelings of hopelessness. Such perspectives, while unintentionally cruel, mask the opportunities lying within the poor’s grasp; those little things mean a lot.
This echoes Supreme Court Justice Sonia Sotomayor, who writes in her memoir My Beloved World: “People who live in difficult circumstances need to know that happy endings are possible.” And Obama’s economists could apply Bernanke’s counsel by giving more attention to the satisfactions – the happiness that springs from individual achievement.
(The writer is a professor emeritus of financial economics at the University of Georgia. He lives in Aiken, S.C.)