Why Manuel strives to improve gross domestic happiness
February 22, 2005
By Jabulani Sikhakhane
As Trevor Manuel, the finance minister, finalises his 2005/06 budget speech for delivery tomorrow, it is worth reflecting on the relationship between money and happiness.
In his speech last year Manuel asked what South Africans would celebrate in 10 years' time, when they marked the second decade of freedom. "We will want to say we have built a caring society. We will want to say that we have reduced pain and extended joy ... " he said.
The issue of how economic decisions impact on the level of happiness or sadness of a country's population has been occupying the minds of economists in recent years.
Richard Layard, a professor of economics at the London School of Economics, defines happiness as enjoying life and feeling it is wonderful.
Things that made people happy included income, work, private life, community, health, freedom and a philosophy of life.
Layard identifies unemployment as a major disaster - similar to a marriage break-up because in each case the person stops being needed.
He argues that the psychological effects of joblessness can be worse than the economic impact.
"This is in marked contrast to the assumptions of many economists, who consider the main loss from unemployment to be the loss of income to a society as a whole, adjusted downward for the value of increased leisure. But our analysis shows the huge psychic impact of unemployment on the unemployed person, on top of whatever income the unemployed person loses."
He argues that for this reason, low unemployment should be a key goal for any government. But he goes further. "It also means that almost any job is better than no job.
That is something you are not allowed to say in France or Germany at present, but the evidence supports it."
On that score, South Africa is no different from France and Germany. Any job is better than no job, is a statement not to be made within earshot of a Cosatu leader.
Layard is the author of a new book, Happiness: Lessons from a New Science, in which he explores why people in the West have not got happier in the past 50 years despite significant increases in income.
In a series of lectures last year he said people in western countries "have become much richer. They work much less, they have longer holidays, they travel more, they live longer and they are healthier".
But they were no happier, Layard said, citing surveys on happiness done in the US, Europe and Japan.
Layard thought the explanation was that once a country reached income per head of more than $15 000, the correlation between happiness and increases in income was broken.
According to the Economist's review of his book, Layard thinks the big source of unhappiness in western countries is the rat race, which he defines as the "zero-sum game of competition for money and status" that has gripped rich societies.
Layard explored a similar theme in his lectures last year: "A degree of rivalry is wired into our genes. Among monkeys, the top male monkey gets the females. In consequence, monkeys with the strongest drive to reach the top reproduce most and that drive has become spread throughout the species.
"The mechanism that produces that drive is interesting. It is not so much the desire to reproduce as the sheer pleasure of being top.
"Serotonin is a neurotransmitter that accompanies good feeling, and researchers at the University of California, Los Angeles studied how the level of serotonin varies in vervet monkeys.
"When a male monkey becomes top monkey his serotonin level soars.
"But if the researchers artificially displace him from that position his serotonin level drops.
"Similar effects are evident in humans, so people who win Oscars live four years longer than people who are nominated but fail to win."
Manuel's budget will provide further details of how government plans to make all South Africans, but especially the poor, happy.
And should government discover after nine years that it has not delivered on Manuel's promise to increase joy and reduce pain, free Prozac to every South African would not be a bad idea.
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