After a couple of graphs and the professor's ramblings trying to explain the graphs to an audience already with one foot out the door, I finally discovered the main point to years of studying happiness. Or at least the main point for me. Apparently, data show that over time happiness stays fairly constant where an overall increase in a country's level of income or total GDP is observed, ceteris paribus. This means that if the distribution of income remains fairly constant as well, people are not any more likely to feel happier than before. Moreover, what struck me as incredibly narcissistic, yet true, an individual is only likely to feel happier if he or she is better off than the people around him. As the saying goes in most Balkan countries, "I'm doing well only if my neighbor does poorly."
So, if being happy is so dependent on one's well-being relative to others, how can we ever strive for equality? I am strongly averse to talks of utopian politics and societies, but I do believe that there must be some universally established minimal level of subsistence. This debate goes back to ancient times when philosophers from different eras argued about the nature of man. Are we born good and the environment corrupts us or do we have evil and egotism written across our hearts (but we spend a lifetime trying to better ourselves and save our souls)?
Whether we believe one or the other, we must not forget that economists are not trying to make people happy. Redistribution of income can have positive effects on total welfare by raising living standards, but negative effects on individual happiness. Above all, welfare is not a perfect measure of the effectiveness of economic policies, and sadly, it is rarely used as such a barometer.
What seems to make people happy is a groundwork of working domestic policies - today's optimistic prospects for investment in tomorrow's stable returns.
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