Human emotions are elusive, easy to recognise but hard to define and harder still to command. So why are so many economists and politicians convinced they can and should deliver on a happiness target?

A new collection of essays from the Institute of Economic Affairs, [amazon_link id=”0255366566″ target=”_blank” ]….and the Pursuit of Happiness[/amazon_link], edited by Philip Booth, has a valiant attempt at derailing the happiness policy bandwagon, although I suspect it is just too fashionable and appealing in these anxious times to knock off the tracks. It makes an interesting contrast to a book by a dear friend of mine, Henry Stewart, [amazon_link id=”0956198619″ target=”_blank” ]the happy manifesto[/amazon_link]. Henry runs Happy Computers, which is certainly where I would want to work if I were not my own boss, and is a stalwart of the campaign Action for Happiness.

One of the things that bugs me about the happiness business is that the campaign is based on a statistical error, one that has now been pointed out by many people (including Paul Ormerod, and Betsey Stevenson and Justin Wolfers, who have essays in the IEA volume, and again this week by Stefan Bergheim of the Zentrum für gesellschaftlichen Fortschritt (there’s a link to his slides here). The origin of the idea that there’s no link between the level of GDP and happiness is Richard Easterlin’s original observation that although within any country rich people reported themselves to be happier than poor people, and average happiness levels were higher in rich countries than poor ones, happiness did not keep pace with GDP in any individual country over time. Therefore, many people concluded, economic growth doesn’t bring happiness. Forget growth! Forget economics!

But happiness is reported on an index running from 1 to 3 or 1 to 10 and can never get above the top of that scale. GDP can increase without limit. There will never be a statistical correlation between the two over time just because of the way the statistics are constructed. The absence of correlation between the two time series therefore has no economic meaning. Look instead at GDP growth (not its level), and this is correlated with happiness.

Does this matter? Yes. Happiness studies certainly offer some important findings. For example, mental health is greatly under-resourced in our health system, and changing that would significantly contribute to well-being. As Henry’s happy manifesto advises, the happiness perspective can make businesses better-managed and more productive. I would commend the advice he offers in this delightful book to anybody running a business, large or small.

However, the well-being agenda at the aggregate level is diverting attention from the important policy priority of enabling growth and employment. A job is the most fundamental contributor to happiness – it gives people meaning and social relations as well as an income (if it is a paid job rather than unpaid care or home-working). Given population and productivity growth, the UK economy needs to grow by about 2.5% a year to keep employment levels where they are. GDP growth is about zero currently. What’s more, as Pedro Schwartz explains in the IEA book, the utilitarianism and psychology underpinning the happiness bandwagon bring some philosophical problems. To give just one example, if poor people in a developing country report themselves to be as happy as, say, the French, on average, what is the justification for anti-poverty policies and aid? Why bother?

As readers of my book [amazon_link id=”0691145180″ target=”_blank” ]The Economics of Enough[/amazon_link] will know, I strongly favour using other indicators as well as GDP, but I would really prefer it if the government and statisticians were not faffing about measuring well-being and telling me to be happy. Stick to the knitting – deliver the jobs, and yes, resource mental health services, cut commuting times, keep down noise and other pollution levels, the things we do know people care about. Leave happiness where it belongs, in the hearts of individuals, including fabulous bosses like Henry Stewart.

[amazon_image id=”0956198619″ link=”true” target=”_blank” size=”medium” ]The Happy Manifesto: Make Your Organisation a Great Workplace – Now![/amazon_image]

Sir Samuel Brittan has reviewed the IEA volume in the FT today. As he points out, the government in Aldous Huxley’s [amazon_link id=”0099518473″ target=”_blank” ]Brave New World [/amazon_link]fed happiness pills to the population, and we consider that a dystopia…..