Earlier this summer, I was fortunate to attend Political economy and the outlook for capitalism, the annual conference of the Association for Heterodox Economics at the University of Paris, La Sorbonne. The main theme was to review how we best measure quality of life and living standards, with a discussion as to whether economists should rely upon mathematical models and equations to come to judgements about this. In the conference introduction, Professor Tony Lawson from the University of Cambridge advocated a move away from Neo-Classical economic models into further use of behavioural economics to support such research.
Some recent articles on this theme are worth a read. Edward Skidelsky had a piece for The Guardian plugging his and his father Robert’s new book (How Much is Enough). This looks at how best we judge life satisfaction and happiness. He reminds us of Keynes’ paper Economic Prospects for Our Grandchildren and of Alfred Marshall’s ‘thinking man’ in coming to the view that there is surely a level of income that is sufficient to live a ‘good life’. Our ability to purchase material goods cannot measure life satisfaction, trapped as we are in to keeping up with the neighbours.
The Paris conference also brought further attention to new indices to rival the HDI (Human Development Index) as a means of comparing living standards between nations. These include the OECD’s Better Life Index, which allows us to put together our own set of indicators, and the Inclusive Wealth Index of the International Human Dimensions Programme (IHDP).
Being born in Blackpool, I was also interested to see the results of the UK government’s own investigation into how happy we are. Residents of the town are prescribed the greatest number of prescriptions for anti-depressants per head of population. They rated their personal happiness at an average of 6/10 on the previous day which meant they were bottom of the government’s league table. Blackpool scores badly on almost all of the measures of social exclusion- number of teenage pregnancies, exclusions from school, violent crime, average earnings, youth and seasonal unemployment rates. A case for a new regional policy?