A Little Knowledge is a Dangerous Thing
Wired News Again:
In 1933, Herbert Hoover vacated the White House and took up permanent residence in the annals of cluelessness. During his one term, the stock market crashed and the United States slid into the Great Depression. But, as history has it, Hoover looked on blithely and did little. Some scholars have argued that this portrait of the president is unfair - that if he was indeed clueless, it wasn't entirely his fault. Back then, the US didn't track many of the vital signs it now uses to monitor our economic health. For example, the federal government didn't begin trying to measure unemployment until 1930. As Stanford University's David Kennedy puts it, Hoover didn't realize he was flying into an economic storm because "he was flying by the wrong instruments."
The main point of this article is that President Hoover din't know what the heck he was doing, because at that time, the study economics was truly in the boonies. He didn't realize he he was flying into an economic storm because he didn't have the right instruments, indicators, or smart economists telling him what to do.
Consequently, the Great Depression happened, where everything sucked for a long time until the first world war. Everyone was depressed, and prozac hadn't been invented yet.
However, this horrible horrible situation might just happen again:
Since the time of Adam Smith, we've used the wealth of nations as a proxy for the well-being of nations. We measure whether life is getting better by checking whether the good numbers (GDP, personal incomes, and so on) are going up and the bad numbers (unemployment, inflation, and so on) are going down. However, over the past half century, something strange has happened. The US's per capita GDP - the value of all the goods and services a nation produces divided by its population - has nearly tripled, but American well-being hasn't budged. We've grown almost three times richer but not one jot happier. There's ample evidence that in all postindustrial societies, material wealth and broader happiness are no longer closely in sync...That's why two prominent social scientists, Ed Diener of the University of Illinois and Martin E. P. Seligman of the University of Pennsylvania, have proposed creating a national index of well-being.
All we need to do is collect the data. For instance, we can now tabulate how much cell phone sales add to GDP. But have these phones made us more stressed out because we can no longer elude our evil boss or annoying brother-in-law? Or have they made us feel more secure because we know we can call for help if we're stranded? Let's ask. Some people wring their hands over how much the US spends on health care. But what if we measured to what extent new drugs and medical technologies improved the quality of people's lives? Maybe the expense would look like a bargain. Assemble measures like these into a national well-being index and, in tandem with revamped economic indicators, it could generate a higher-res picture of the national condition.
The first question i have is: you may not be happy if you get what you want, but will you be happy if you don't get what you want?
The second question i have is: i think an indicator for happiness is silly, not to mention impossible to implement. I can just imaging reporting to the president, "Mr. President, people's happiness levels are down from a month ago. More people were unable to elude their evil boss, although less people reported being stressed out by phones. If we leave out the eluding the evil boss sector, happiness levels are up." This isn't a question is it?
The main gist is, economics is a study of relative happiness. If you get more stuff, you will be relatively happier. If you get less, you will become more unhappy. It does not guarantee absolute happiness. Our national indicators are there to study the aggregate ability of the people to get more stuff. They are relatively more happy. Imagine if God just dumped everyone here onto the moon, where there's no stuff (or air). They would be relatively unhappy. Simple.
The article concludes with an ominous warning to the president:
Wired News Again:
In 1933, Herbert Hoover vacated the White House and took up permanent residence in the annals of cluelessness. During his one term, the stock market crashed and the United States slid into the Great Depression. But, as history has it, Hoover looked on blithely and did little. Some scholars have argued that this portrait of the president is unfair - that if he was indeed clueless, it wasn't entirely his fault. Back then, the US didn't track many of the vital signs it now uses to monitor our economic health. For example, the federal government didn't begin trying to measure unemployment until 1930. As Stanford University's David Kennedy puts it, Hoover didn't realize he was flying into an economic storm because "he was flying by the wrong instruments."
The main point of this article is that President Hoover din't know what the heck he was doing, because at that time, the study economics was truly in the boonies. He didn't realize he he was flying into an economic storm because he didn't have the right instruments, indicators, or smart economists telling him what to do.
Consequently, the Great Depression happened, where everything sucked for a long time until the first world war. Everyone was depressed, and prozac hadn't been invented yet.
However, this horrible horrible situation might just happen again:
Since the time of Adam Smith, we've used the wealth of nations as a proxy for the well-being of nations. We measure whether life is getting better by checking whether the good numbers (GDP, personal incomes, and so on) are going up and the bad numbers (unemployment, inflation, and so on) are going down. However, over the past half century, something strange has happened. The US's per capita GDP - the value of all the goods and services a nation produces divided by its population - has nearly tripled, but American well-being hasn't budged. We've grown almost three times richer but not one jot happier. There's ample evidence that in all postindustrial societies, material wealth and broader happiness are no longer closely in sync...That's why two prominent social scientists, Ed Diener of the University of Illinois and Martin E. P. Seligman of the University of Pennsylvania, have proposed creating a national index of well-being.
All we need to do is collect the data. For instance, we can now tabulate how much cell phone sales add to GDP. But have these phones made us more stressed out because we can no longer elude our evil boss or annoying brother-in-law? Or have they made us feel more secure because we know we can call for help if we're stranded? Let's ask. Some people wring their hands over how much the US spends on health care. But what if we measured to what extent new drugs and medical technologies improved the quality of people's lives? Maybe the expense would look like a bargain. Assemble measures like these into a national well-being index and, in tandem with revamped economic indicators, it could generate a higher-res picture of the national condition.
The first question i have is: you may not be happy if you get what you want, but will you be happy if you don't get what you want?
The second question i have is: i think an indicator for happiness is silly, not to mention impossible to implement. I can just imaging reporting to the president, "Mr. President, people's happiness levels are down from a month ago. More people were unable to elude their evil boss, although less people reported being stressed out by phones. If we leave out the eluding the evil boss sector, happiness levels are up." This isn't a question is it?
The main gist is, economics is a study of relative happiness. If you get more stuff, you will be relatively happier. If you get less, you will become more unhappy. It does not guarantee absolute happiness. Our national indicators are there to study the aggregate ability of the people to get more stuff. They are relatively more happy. Imagine if God just dumped everyone here onto the moon, where there's no stuff (or air). They would be relatively unhappy. Simple.
The article concludes with an ominous warning to the president:
Without some new measurements - of both the modern economy and the modern predicament - you may find yourself drifting, Hoover-like, into unexpected airspace and onto the least flattering pages of history.
At least the president wouldn't have to worry about drifting hoover-like through unexpected airspace when he's in space. har har har.
By the way, for happiness, here is a helpful link
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