
Happy nations don't focus on growth - smollett
https://www.bloomberg.com/view/articles/2017-03-20/happy-nations-don-t-focus-on-growth
======
Oddstrider
The nations mentioned are some of the most advanced in the world, and their
lower-than-world-average GDP growth is being used to show that "it's not all
about wealth". I don't think this article makes a very good point.

~~~
opportune
Exactly. This is a classic case of a confounding variable. The happiest
nations are also the richest ones. The richest ones have lower growth than
developing nations precisely because they are the richest: developing nations
can achieve growth by increasing their literacy rates, building
infrastructure, and making other capital expenditures (e.g. farming equipment,
high-tech machines for factories). The richest ones already have all of that,
so their growth needs to come from elsewhere.

~~~
acchow
In economics terms:

Y = f(A, K, L).

That is, GDP is a function of Capital (K), Labor (L), and a catch-all of
technology (A).

Developing countries can ramp up any of these 3 easily, especially technology
"A" by transfering/adopting technologies that exist elsewhere. The richest
countries can't do that since they should be at the forefront of technology.

~~~
dredmorbius
The attribution of the Solow Residual to "technology" is grossly misplaced and
very poorly founded.

Roughly 98% can be attributed by primary energy consumption. A fact mainstream
economists seem to be at pains to deny.

R.U. Ayres, Charles A.S. Hall, and numerous others have repeatedly derived
this relationship, and with a pretty consistent value.

~~~
acchow
That's because a lot of technology is coming up with new ways of using energy
to do useful things. See: light bulb, internal combustion engine, etc. And a
lot of technology is new methods that reduce the cost of building these
energy-consuming devices allowing us to produce more of then for cheaper (and
more of them then consumer more energy).

I feel like you are trying to say "no, it's just consuming more energy. It's
not 'technology'". But I think you've missed the point. We can't just dump
more coal and oil onto a field and burn it and expect that energy to increase
production. We need "technology" to turn it into something useful.

~~~
dredmorbius
Sure, but:

1\. Those new ways of using energy themselves are highly dependent on energy-
intensive factors as inputs. Steel, aluminium, copper, electronics, reliable
power inputs, control systems, etc., are all the products of high-energy
outputs.

When you realise that the Watt steam engine revolutionised manufacturing based
providing a net total of 500 prime movers of about 10 HP each net power
output, you start to recognise just how energy-contrained economic activity
was.

2\. The Solow Residual is, quite literally, _just that_. It's a statistical
residual. Solow himself describes it as "the measure of our ignorance". Again:
_there is no basis to attribute it to "technology"_. Other than it forms an
economically convenient theory.

3\. The research I've mentioned is far more specific -- rather than just run a
regression of capital vs. labour and handwave a declaration that All That Is
Unexplained Shall Be Termed "Technology", it specifically considers the role
of other factors, including energy. And, again: shows that that accounts for
up to 98% of the residual -- an _insanely_ high fit.

So long as we're talking factors of production, I've just learned, reading of
and from Alexander Hamilton Church, who more-or-less invented cost accounting,
that through about 1900, _only labour_ was considered as a factor of
production.

Somewhat amusingly, his discussion of factors _other than labour_ focuses,
almost exclusively, on the ability to supply mechanical power through engines.
Go figure. 1910.

[https://en.m.wikipedia.org/wiki/Alexander_Hamilton_Church](https://en.m.wikipedia.org/wiki/Alexander_Hamilton_Church)

[https://archive.org/stream/productionfacto00churgoog#page/n1...](https://archive.org/stream/productionfacto00churgoog#page/n14/mode/2up)

------
chickenmonkey
I really don't think that this article makes a very good case for nations to
focus on happiness over economic growth. It is apparent that the nations that
the article states are the happiest are highly developed nations which have
had decades of growth which has given them the means to keep their population
happy. With regard to the point about China's growth, I believe that given how
rapidly China is growing, there will be a significant lag between the rate at
which GDP grows and the time when the Chinese people begin receiving the
benefits of this growth.

Of course, general well-being is a better metric of whether the incumbent gets
voted in than economic growth in developed countries because well-being is far
more tangible to the common man than the abstract concept of economic growth.
OTOH, in a developing country, I'd argue growth is a better indicator of the
probability that the incumbent will win since developing countries have growth
rates which are in general far higher than developed, and since these high
growth rates result in visible, tangible changes: bridges get built, schools
are opened, and people get jobs.

Perhaps, the new thesis of the article should be that developing nations
should focus on economic growth, while developed ones should focus on the
happiness of their people.

------
pfranz
I read a similar things a few weeks ago. They were saying that the U.S.
(government through laws and legal system) centered on "fairness" up until
recently. Sometime after WWII the focus changed to Economics and growth. I'm
guessing it was saying this is the cause of crazy inequality and "the jobless
recovery."

I'm not sure I buy all of it (the U.S. wasn't really a world power prior to
the world wars, so they'd be dismissing that and other gains if it was their
whole premise), but like this article, something to think about.

~~~
losteric
> They were saying that the U.S. (government through laws and legal system)
> centered on "fairness" up until recently. Sometime after WWII the focus
> changed to Economics and growth.

I absolutely agree with this. Considering the history and how we used to run
public schools, it seems almost obvious.

American nationalism was at an all-time high during World War 2 and we rode
that straight into the Cold War... 50 years of anti-soviet propaganda and
public discourse, riding the post-WW2 American economic boom and global "anti-
communist" imperialism. For an _entire generation_ community-oriented
principles, egalitarianism, collectivist ideas, and far-left leaders were
demonized as Soviet sympathizers, replaced with rah rah unregulated
capitalism, Ayn Rand-ian individualist, and military might.

If you've ever wondered why many modern American Christians blatantly
disregard the liberal social aspects of Jesus/the Bible, look no further.
WW2's morale-boosting propaganda morphed into a cancer of civil discourse,
deeply coupling nationalism with the perceived indisputable success of
American capitalism.

Consider these two points: * The Cold War started 70 years ago, and formally
ended 26 years ago * 2016 Trump / Sanders popularity, bucketed by age:
[http://www.msnbc.com/sites/msnbc/files/age_of_voting_groups_...](http://www.msnbc.com/sites/msnbc/files/age_of_voting_groups_18-24_25-34_35-44_45-54_55-64_65_and_over_chartbuilder_2.png)

American society takes time to change because our 2-party system is dominated
by unengaged voters, the uneducated electorate that votes without thinking
about it... heavily influenced by the world they grew up in, and what they
were taught from k-12. When many election results are +/\- 5%, moving the
average 10% in one direction has long-term consequences.

It's worth thinking about how our 17 year-old "War on Terror" will continue to
change society...

~~~
trynumber9
So, what was the first Red Scare, Sacco and Vanzetti, or the Scopes Trial in
the 20s about then? Many of the things you attribute to the Cold War-era were
present in the 1920s USA. The biggest difference was isolation.

~~~
losteric
What's the difference? The first Red Scare was 3 years of isolated domestic
violent agitation, and public response was largely focused on those agitators.
The second Red Scare was a 50-year ideological war that saturated the nation,
a generation raised demonizing concepts as "un-American" before becoming the
teachers and politicians of their children. It takes time heal from that
dogma.

~~~
taway_1212
You seem to be overlooking the fact that, thanks to "that dogma", America is
not a part of the Soviet Union today.

~~~
losteric
Are you familiar with the phrase "cutting off the nose to spite the face"?
Dogmatism is a fear-induced lobotomy, intentionally unlearning and
stigmatizing certain solutions to problems... if dogma fatally poisoned
American democratic capitalism, then our victory was pyrrhic at best.

In fact, dogma is _antithetical_ to both capitalism and democracy, which
assume an ideal rational populace. A rational society strives for
improvements. They would have invested in more socratic education, deeper
rational thinking, and an open fair evaluation of ideas. Ideas that pass
rigorous evaluation hold merit and warrant experimentation. If aspects of
communism could improve parts of our society, _we should use them._

Dogma is indefensible, and I feel like that point should be self-evident on
HN. Successful startups don't copy history. We solve problems by forming
rational strategies based on data and logic, chasing "impossible" ideas
because they are _good_ and _work_. We understand that processes and
technology are tools, a means to an end... why would socioeconomic theory be
any different?

And anyway, America was never even close to becoming part of the Soviet Union.
Nuclear annihilation was the big risk, but dogma does not work against ICBMs.

~~~
taway_1212
> And anyway, America was never even close to becoming part of the Soviet
> Union. Nuclear annihilation was the big risk, but dogma does not work
> against ICBMs.

Not necessarily. The communist ideology was so appealing to the people (and
the USSR so good at spreading it world-wide, via various channels) that, if
not for the radical anti-communist steps, it's not impossible that USA would
have its own communist revolution (orchestrated from Moscow and led by the
local "useful idiots"), like so many other countries.

More broadly, I don't think that being in an open conflict with a world super
power is the best time for rational reflection. Notice how democratic
countries suspend most of its values during the war (i.e. they can take your
property if it'll help the war effort, they'll put you to jail if you refuse
to fight etc.) - they're just impractical when under attack.

~~~
losteric
Why do you think communism was so appealing? Years of hostile discussions left
both business owners and laborers at odds. Greedy companies refused to lower
profits, and labor felt they deserved an equal share - especially after the
world wars.

Ultimately, it's American business owners that were responsible for the rise
of revolutionaries in the US. Early on, corporations restricted the political
rights of labor unions while buying their own politicians. When laborers
demanded fairer working hours, better working conditions, and fairer wages,
businesses refused to compromise. When peace fails, people are left with the
choice of abandoning hope or fighting towards revolution as a last resort. The
USSR simply amplified existing legitimate anger.

I want to point out that the mainstream labor resistance was _not_ about
communism; citizens were fighting for equality and fairness _within
capitalism_. The press always misuses scary words like "communism", in truth
social ownership was secondary to being treated humanely. The government could
have easily kicked out the USSR by stepping in as a mediator between business
owners and employees.

> More broadly, I don't think that being in an open conflict with a world
> super power is the best time for rational reflection. Notice how democratic
> countries suspend most of its values during the war (i.e. they can take your
> property if it'll help the war effort, they'll put you to jail if you refuse
> to fight etc.) - they're just impractical when under attack.

Hahah, what? We don't suspend our values during war. Drafts fall under the
social contract, all citizens are expected to defend the nation if called
upon. The IRS always seizes property due to tax evasion. Industries always
remain in private hands, we set production quotas because _profit_ is not a
right. We have interned people during war, but that's an artifact of ignorance
rather than an intentional suspension of values.

Why do you think war isn't a good time for rational reflection? The
_battlefront_ requires action, but there's no reason for civilians to worry
during a superpower proxy war. The US is massive and our enemies are oceans
away.

------
wordsarewind
Although I'd have to poke around for the specific sources, I've read papers
that showed that, in fact, subjective well-being increases continuously with
wealth (per capita GDP). However, the increase is not linear, but rather
logistic--which makes intuitive sense, since a $5,000 pay raise for an
employee making $25,000 a year isn't the same as for one making $100,000. On
the other hand, I've also read that the increase in wealth past the much-
referenced $75,000 level doesn't significantly increase emotional well-being
(unconscious positive/negative feelings).

~~~
fulafel
Sounds like this would depend a lot on what kind of social safety net is
provided by the society. You need a lot more income to feel secure in the US
than Sweden, where healthcare/education/pensions are more or less collectively
provided.

------
victornomad
The way of measuring happiness is nonsense

basically asking people, "are you happy?"

There is a gigantic cultural bias. In many cultures people say that they are
happy because they are expected to say that they are happy. Itd just a facade.
In some others people just dont like to talk about self happiness or they have
negative connotations when they talk about it.

I have lived in 5 countries from that list and I find it really hard to say
that people from those countries are happier than other countries I've lived
in and are not listed.....

anyway lets keep living in hackernews bubble...

~~~
petra
Which countries have you lived in, and how would you rate the happiness?

BTW, i'm from Israel, an we're number 2 on the happiness scale! hooray!

~~~
bonestamp2
On average, how would you rate your happiness from 1-10 (10 being the most
happy you could ever possibly be)?

------
candeira
A lot of happy millionaires have close to no income, in fact they remain happy
millionaires while incurring in negative net worth growth.

Maybe poor people wanting to make more money need to rethink their strategies?

------
ThomPete
Denmark the most happy nation in the world cares about growth a lot. Maybe
Danes don't but the nation as a whole does.

~~~
campground
This is interesting. If Danes don't care about growth, then in what sense does
Denmark care about growth?

~~~
afterburner
I assume "nations caring about growth" means they have economic and social
policies that end up encouraging such growth. The average Dane (or any person
anywhere really) probably doesn't think much about policy.

------
Jabanga
>There's plenty of wealth, that goal is already achieved. Good policy is a
matter of directing it toward the determinants of happiness.

This reminds me of this quote:

"It is only in the backward countries of the world that increased production
is still an important object: in those most advanced, what is economically
needed is a better distribution"

-John Stuart Mill, Principles of Political Economy (1848, book IV, chap. VI)

One day we'll look back at the levels of wealth people today possess the same
way that today we look back at the level of material prosperity people enjoyed
in 1848, as being at the level of extreme poverty.

To prioritize ephemeral happiness over substantive gains in the people's
capabilities is shortsighted.

------
easytiger
They also have the highest suicide rates. Go figure.

~~~
__m
No they don't. See the WHO ranking

------
faragon
Why are Finns so unhappy, while Swedes are as happy as the world average?

Edit: I found a BBC article saying just the opposite [1], may be Finns are
happy, after all? :-)

[1] [http://www.bbc.com/travel/story/20110622-travelwise-why-
are-...](http://www.bbc.com/travel/story/20110622-travelwise-why-are-finns-so-
happy)

------
xux
Should be renamed to "Wealthy nations, which don't need growth to be more
wealthy, tend to be happy"

Big surprise

------
spodek
Growth also contributes to global warming. And the many people who think it
could now or eventually decrease it compound the problem.

------
platz
but what if growth is required for certain scientific and medical investment,
funding, and advancement even if it depresses the average happiness of a
population?

If that is true, how much of suffering of individuals are we able to tolerate
to keep the average of a whole up a few notches? (re: all the issues with
utilitarianism)

------
lngnmn
Growth makes nations happy

------
tn135
Richest nations are the happiest nations as long as they don't run out of
their money. That is the proper conclusion.

I am pretty sure 10 years ago Greece would have featured as a happiest nation
and Venezuela not as much as a miserable nation that it is today.

Contrary to all this India WAS super miserable 10 years and go and much more
happier today though comparatively might not be as happy as the Italian.

------
xorfish
Correlation does not imply causality...

------
Gys
> Policymakers should care more about happiness inequality rather than mere
> income inequality.

Policymakers are probably very concerned with happiness. Their own ;-)

~~~
maxxxxx
They are probably very correlated

------
throwaway053
This means China isn't happy at all. They need to fake that 7.0% growth every
year for eternity, even though everyone knows it's all fake data, and most
likely they're not even growing.

~~~
robteix
What makes you think China's growth is fake?

~~~
jernfrost
It is somewhat fake. Digging a hole and filling it shows up on GDP statistics
even though it is pointless and adds no real wealth to the population. Chinese
growth is a lot like this. A lot of production for the sake of production.
They tend to have overproduction in many sectors. So they their GDP growth is
made up of a lot of stuff nobody is demanding. Of course this kills profits,
but since China had capital controls investors can't move their money
elsewhere.

This is why Chinese growth is considered unbalanced. Also a great example of
the stupidity of obsessing about GDP numbers.

