How does 'democratic failure' threaten progress?

In Chapter 8 of my book, Free to Flourish, I suggested that the greatest threat to human progress over the next few decades is that democratic governments will not be able to cope with their expanding responsibilities. I noted that increased public disorder is already evident in Europe and is likely to become more widespread as people become increasingly aware that governments cannot deliver on the promises they have made.

There is a risk that failing democracies will be replaced by authoritarian regimes that have little regard for human rights. Even if democracy limps on, however, over-expansion of the responsibilities of government seems likely to bring progress to an end in many societies.

 

Progress ends at the point where societies cease to be able to offer expanding opportunities for individual human flourishing.

From an economic perspective, the most obvious threat to progress posed by expansion of the responsibilities of government has to do with the economic costs of high levels of government spending, high taxation and excessive regulation. Government spending has to be paid for sooner or later by collecting revenue from citizens and (as every economist should know) the economic cost of taxation rise disproportionately with tax revenue. There are also economic costs associated with forms of government spending and regulations that divert resources to less productive activities or weaken incentives for efficient resource use. As a general rule, the further the activities of government extend beyond core functions in which government has a comparative advantage, the more likely it is that progress will be stifled.

However, that kind of analysis understates the threat to progress posed by expansion of government responsibilities because it assumes that governments act in the interests of the broader community and that all governments have competence in taxing, spending and regulating to pursue agreed objectives. Democratic processes may reduce some of the problems of such government failure, but democracy doesn’t provide much assurance that governments will pursue objectives that are in the interests of the vast majority of citizens, or that the activities of government will be undertaken efficiently. Democracy doesn’t prevent voters from developing inflated expectations of what governments can do – politicians often encourage inflated expectations in competing for votes. Democracy doesn’t ensure that individuals have the opportunity to discover and pursue whatever it is that enhances their own wellbeing and the responsibility to manage their own lives; it doesn’t prevent people from being relieved of important responsibilities – such as education, health care, saving for retirement. Democracy doesn’t prevent governments from becoming captive to interest groups in industry, the community and the public sector, and to pursue the interests of those groups at the expense of the rest of the community. The absence of market disciplines in the public sector makes public sector activities particular prone to corruption and inefficiency, even in democracies.

As a consequence of such democratic failure there is a tendency for the responsibilities of government to expand until economic disaster threatens. The point at which this occurs differs greatly between countries, depending on the extent of corruption and inefficiency. For example, Greece was well on the way to an economic crisis before its government spending as a percentage of GDP reached levels comparable to those in Sweden, which is often held up as a prime example of a country with big government.

Another symptom of democratic failure is difficulty in changing course when disaster threatens. Again, a comparison between Sweden and Greece is appropriate. When disaster threatened in the early 1990s, Sweden was able to introduce reforms to contain the growth of government spending, reduce marginal tax rates and regulate more efficiently. Despite the high level of government spending in Sweden - still around 50 per cent of GDP – there is some prospect that opportunities for individuals to flourish will expand over time in that country. Gallup poll data suggest some increase in average life satisfaction in Sweden over the period from 2005-07 to 2010-12 and that Swedes are optimistic that their lives will improve further over the next five years.

By contrast, Greece has shown much less ability to introduce the reforms needed to avert economic disaster, even though successive governments in that country have known that public debt problems were looming since before 2001, when Greece joined the Eurozone. The consequence has been a fall of about 20 per cent in Greece’s GDP since 2008. The average unemployment rate in Greece has been about 28 per cent this year and youth unemployment over 60 per cent. Over the period from 2005-07 to 2010-12, average life satisfaction in Greece declined from 6.3 to 5.4 (on the Cantril scale in which the ‘best possible life’ is given a value of 10 and the worst possible life a value of zero). Greeks have become pessimistic about the future – the average Greek expects life to get worse over the next five years.

It would be nice to be able to contrast the experiences of both Sweden and Greece with those of a country that can be held up as a model of ideal democratic governance. Unfortunately, no country comes to mind. Institutional innovations have resulted in improved policy outcomes in some countries, but I don’t think any one country deserves to be held up as a model of ideal governance.

The growth of inflated expectations of what governments can do seems to be a common pattern throughout the democratic world. It is also common for responsibilities of government to expand until crisis threatens.

As we have seen, what happens at that point is of critical importance. If policy reforms are introduced to contract the responsibilities of government, that enables opportunities for individual human flourishing to expand over the longer term. If reform is too little and too late there is the prospect of following Greece down the path toward widespread misery. Unfortunately, a Greek tragedy may await many countries, particularly in Europe, where democratic failure seems to have become too deeply entrenched for substantial reforms to be implemented.

How should virtue ethics be applied in the pursuit of happiness?

Jeffrey Sachs has described his essay, ‘Restoring Virtue Ethics in the Quest for Happiness’ as highly speculative. That description is apt in my view, even though the idea of restoring virtue ethics does deserve serious consideration. (The essay was published recently as Chapter 5 in the World Happiness Report 2013.)

Jeff begins by establishing that before the modern era, virtue and happiness were seen to be inextricably intertwined. Happiness was seen to be achieved by harnessing the will and the passions to live the right kind of life. He goes on to argue that, over several centuries, virtue ethics has largely been replaced by utilitarian considerations, resulting in greater hedonism and consumerism.

I agree that people have come to think of happiness as being largely about feelings – about pain and pleasure, or positive affect and negative affect, rather than about tranquility, equanimity or spirituality. And, for many people, the pleasure of immediate consumption seems to have encroached upon the virtue of prudence.

Jeff takes this argument much further. He suggests that in the early decades of the 20^th Century (the Roaring 20s) ‘America slid into an ethos of ‘hyper-commercialism, untethered by ethical, religious, or philosophical constraints’. He suggests that since then the prevailing ethos has been that happiness ‘was more and more to be found in personal wealth, pure and simple’. He follows Wilhelm Ropke in suggesting that the ubiquity of advertising and the other ‘dark arts of persuasion’ are undermining social values and ethics. He also shares Ropke’s concerns that financial innovations are undermining the fragile restraints that induce households to save for the future.

Jeff argues that hyper-commercialism is the dominant ethos in the United States today. He also claims:

‘Hyper-commercialism has failed to lift average US happiness for more than half a century, even as per capita income has tripled. In Figure 2.3 of this report, the US ranks just 17^th in happiness, though it has a higher income per capita than the 16 countries ahead of it, with the exception of Norway’.

However, I don’t think Jeff has established that hyper-commercialism is the dominant US ethos. It seems to me that what Jeff describes as ‘hyper-commercialism’ is normally referred to in less inflammatory terms as ‘materialism’ - a preoccupation with or emphasis on material objects, comforts and considerations at the expense of spiritual, intellectual, or cultural values. Whereas hyper-commercialism is linked exclusively to commercialism, materialism could have a number of different causes. Businesses certainly try to tempt people to buy the things they sell, but they were not alone in encouraging materialism. The 20^th Century was also prime time for industrial and political movements which promoted materialism by encouraging people to agitate for improvement in the material conditions of their lives. Practitioners of the politics of envy have been active in America in encouraging people to become discontented, even though they have been less successful than in some other parts of the world.

The idea that materialism has become dominant seems to me to understate the ongoing influence of ethical constraints and non-commercial values in the United States. Views about anti-social behaviour have moved in favour of greater government regulation, and opportunistic and untrustworthy behaviour is widely discouraged. Moralists and even some entertainers preached against materialism during the 20^th Century, as in earlier periods. Their view has gained impetus in recent years as scientific evidence has emerged that people whose main goal in life is to become wealthy tend to become unhappy if they fail to attain that goal.

Jeff also seems to have overlooked the possibility that people might have chosen to become more materialistic in their outlook even in the absence of urging by commercial and political interests. Is it not possible that we have come to want the material objects that make our lives more comfortable and provide us with better travel and communication possibilities as they have come into existence and as we have come to learn how they can improve our lives? My casual observations suggest that it is possible. For example, when I visited Bhutan it seemed obvious to me that many of the people who live there still want access to the material objects of the modern world, even though they have been exposed to little advertising.

The evidence that Jeff cites of no increase in average happiness in the US for more than half a century is contradicted by evidence from the Pew Research Center and the Gallup Organisation that since 1964 the proportion of Americans saying that their life today is better off than five years ago has generally far exceeded the proportion saying that their life today is worse than five years ago. It seems to me that the latter surveys are more reliable because they require respondents to evaluate their current and past lives on a directly comparable basis.

The point that Jeff makes about average happiness in the US ranking below that of some countries with lower incomes invites an inspection of the reasons why the US ranking is lower, to see whether they provide support for speculations about hyper-commercialism. I don’t see any obvious evidence in support of Jeff’s speculations in Figure 2.3 (to which he refers in the passage quoted above). Perceived levels of social support and generosity are comparable to those in the highest ranking countries. The Figure suggests that the areas in which the US performs more poorly than the highest ranking countries are perceptions of corruption and freedom to make life choices – which are not linked in obvious ways to hyper-commercialism. Further research is required to understand why people in the US perceive corruption to be high and their freedom to be restricted.

It is fairly clear from what I have written that I disagree with a fair amount of the reasoning by which Jeff comes to the view that virtue ethics should play a larger role in the quest for happiness. Nevertheless, I agree with him that we should be seeking some kind of ethical consensus as a guide to public policy. In Free to Flourish (and on this blog) I have suggested that the concept of a good society – a society that is good for the people who live in it – could be a useful focus for thinking about this issue. I have suggested that there would be widespread agreement that a good society would have three important characteristics:

·         a set of institutions that enable its members to live together in peace;  

·         widespread opportunities for its members to live long and healthy lives, and to pursue their economic, educational, cultural goals; and

·         a degree of security against misfortunes such as accidents, ill-health, unemployment and environmental disasters. 

Finally, I agree with Jeffrey Sachs’ suggestion that more attention should be given to monitoring individual norms regarding honesty, trust and other aspects of virtue ethics. The state of the social fabric is clearly of fundamental importance to the pursuit of happiness.

What has happened to average world happiness levels since the GFC?

Despite the Global Financial Crisis (GFC) and its aftermath, there has been a small improvement in average life satisfaction of the world population over the period from 2005-07 to 2010-12. That finding is based on data from the Gallup World Poll, and is reported in the World Happiness Report 2013 edited by John Helliwell, Richard Layard and Jeffrey Sachs.

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It seems to me that the report may actually understate the extent to which most people in the world have perceived their lives to have improved since the GFC. I will give my reasons for that view toward the end of the article, after I have presented some of the Report’s findings.

Chapter 2 of the World Happiness Report indicates that increases in average life satisfaction occurred mainly in Latin America and Caribbean countries, the Commonwealth of Independent States (Russia and other former Soviet countries), East Asia, Sub-Saharan Africa and Southeast Asia. It suggests that these increases were offset to a large extent by declines in the Middle East and North Africa, South Asia, Western Europe and NANZ (North America, Australia and New Zealand).

Significant improvements in average life satisfaction occurred in 16 of the 21 countries in Latin America and the Caribbean and significant declines occurred in only 2 of those countries. The increases for Ecuador, Nicaragua, Paraguay, Peru and Chile were all greater than 0.7 (on the zero to 10 Cantril scale), putting those countries among the top 12 countries in the world in terms of improvement in average life satisfaction.

The pattern was more varied in other regions. For example, average life satisfaction declined in 7 of the 17 countries of Western Europe but increased in 6 of those countries. Average life satisfaction declined in the United States and New Zealand, but did not change much in Canada and Australia.

Analysis in the report suggests that the main reasons for the improvement in life satisfaction in Latin American and Caribbean countries was growth of average income levels, combined with substantial declines in perceived corruption and a substantial improvement in life-choice freedom.

The Report includes a special analysis of the reasons for the decline in life satisfaction in Greece, Spain, Italy and Portugal, the four countries of Western Europe in which life satisfaction declined to the greatest extent during the Eurozone crisis. The declines in life satisfaction in those countries were far greater than could be explained by the decline in income alone. Declines in perceived life-choice freedom, social support and generosity and increases in perceived corruption went some of the way toward explaining the decline in life satisfaction, but left a substantial amount unexplained. Inclusion of unemployment in the analysis suggested that this variable also had a significant independent impact.

The authors note that Greece stands out among the four countries as having the largest decline in life satisfaction that cannot be explained by any of the above factors. They suggest that another factor that might be of particular importance in Greece is a decline in trust in key institutions, such as the legal system.

It might have been illuminating to include Ireland in this analysis because that country was also severely affected by the GFC and still has an unemployment rate of 14%, which seems alarmingly high even though only about half the rate in Greece and Spain.  In contrast to the four countries included in the analysis, average life satisfaction levels in Ireland remained virtually unchanged over the period considered.

The time has come to discuss why I think the Report may actually understate the extent to which most people in the world have perceived their lives to have improved since the GFC. In my view there is a problem in attempting to measure changes in world happiness levels by comparing the results of successive surveys. The problem arises because the measurements have been made relative to a reference point – perceptions of the best possible life – that changes over time, and changes to a different extent in different parts of the world.

It seems to me that while it would be reasonable to expect that people in Europe would not have changed their perception of the best possible life to any great extent over the last five years, that is unlikely to be true of people in a country such as China, where high levels of economic growth would have been accompanied by broadening horizons and rising aspirations. I think that means that the World Happiness Report has probably tended to understate progress toward a better quality of life in countries with relatively rates of economic growth and thus to understate the increase in average happiness levels of the world population.

Perhaps it would help to clarify the point I am trying to make if I elaborate on the implications of rising aspiration levels in China for measurement of happiness. I noted on this blog a few years ago that Gallup data for 2008 indicates that the rating the Chinese gave to ‘life five years ago’ is lower than the average life satisfaction rating for just about every country in the world outside Africa. I also noted that the rating the Chinese gave to their lives five years ahead was higher than average life satisfaction in some western European countries. I went on to predict:

‘When they appraise their current quality of life in five years time they will realize that they still have somewhat further to go before attaining “the best possible life”. But they are not likely to become discontented while they continue to experience the economic growth they have come to expect’.

The World Happiness Report shows only a small improvement in average life satisfaction in China, from 4.7 in 2005-07 to 5.0 in 2010-12. We don’t have data on how much the Chinese have perceived their lives to have improved over the last five years, but it could well be by about the same magnitude as the improvement they perceived in the five years to 2008 (1.2 points). What we do know is that the Chinese remain just as optimistic about the prospects for improvement in the quality of their lives over the next five years as they were in 2008 (with an average improvement of 1.5 points expected in both instances).

We can be confident that the current optimistic expectations of the Chinese people will not be fully reflected in their average happiness levels in five years time because expected improvements in the quality of life in China over that period are likely to be accompanied by a further elevation in perceptions of the ‘best possible life’. Even if optimistic expectations are met concerning economic growth and other relevant factors, it is likely that there will be little increase in average happiness levels in China. Changes in the average happiness data provide little information on the extent to which people in China perceive that their lives are improving.

If we want to know the extent to which Chinese people perceive that their lives are continuing to improve we need information on the rating they give to their past lives that is comparable to the rating that they give to their current lives. As noted above, in the past the Gallup organization has in the past collected data on ‘life five years ago’ when collecting evaluations of ‘life today’. Unfortunately, this information has not been collected in recent surveys. Hopefully, the relevant information will be collected regularly in future.

How does meditation affect word mongering?

Teach Us to Sit Still seemed like an appropriate title for a book to read on the flight from London to Sydney a couple of weeks ago. The book, written by Tim Parks (a successful author who was shortlisted for the Booker Prize for his novel, Europa) turned out to be an even better choice than I had expected. The book provided me with a timely reminder of the benefits of Vipassana meditation. When I became too tired to read, I put on my eye mask and spent a couple of hours observing the sensations arise and pass away. That is something that I should do more regularly.

Tim has a delightfully dry sense of humour, which he has used to good effect in this book to tell the story of how he overcame severe pelvic pain that had made his life miserable. The medical profession was unable to find the cause of his problem, but Tim found that ‘paradoxical relaxation’ helped. This technique involves calmly identifying and observing tension without trying to relax it; the paradox is that the muscles eventually relax themselves.

Tim’s massage therapist told him that ‘paradoxical relaxation’ had some similarity to Vipassana meditation and he decided eventually to attend a Vipassana course. Although his immediate problem was cured, Tim felt that there was much work still to be done – predators ‘prowled the borders of the small haven of comfort’ he had staked out.

Tim approached Vipassana with irreverent scepticism, but this did not prevent the experience from having a profound impact. I want to focus here on the impact it had on his desire to continue to be a successful author.

At one point in his first meditation course, Tim is reflecting on the relationship between novels and life. He notes that the novels that ‘most accurately, intensely and wonderfully’ imagine life tend to keep us away from life: ‘If it is life we want, we put the book down’. This leads him to consider his own thought processes:

‘First the emotion, then the excited reflection on emotion, attempting to divert it from its initial function, to enroll it in my career project, to turn it into smartness and writing’.

During his second meditation course Tim accepts that the time has come to face up to ‘simply being here, instead of taking refuge in writing about being here’. He comes to consider the possibility that his former illness might be a consequence of his successful writing career:

‘Nor was it unthinkable that the strange pains I had been feeling had in some way to do with all those years sitting tensely, racking my brains over sheets of empty paper, building up hopes, rejoicing over some small achievement, overreacting to setbacks and disappointments. And it was true that if you placed yourself, or your attention, as it were beside these pains, if you just sat together with them and let them be, not reacting or wishing them away, they did in the end subside. Likewise the thoughts’ … .

The passage goes on with Tim acknowledging that he had sensed the first hints of equanimity. He concludes:

‘All you have to do now is stop writing … and you’ll have clinched it. You’ll have changed forever’.

When Tim tells the meditation teacher, John Coleman, that he is thinking of giving up his writing career, Coleman responds:

‘You know a lot of people come to these retreats and get it into their heads they should retire to a monastery or something. I can’t see why’.

Tim didn’t think that response was helpful; it didn’t resolve the conflict that he saw between word mongering and experiencing life.

So, how did Tim resolve that conflict? Well, he obviously didn’t stop writing. He has written a couple of other books since writing Teach Us to Sit Still, including the novel, Sex is Forbidden (first published as The Server). And some of the things he has written suggest that he still sees the potential for conflict. For example in an article entitled ‘The Chattering Mind’, for the NYR Blog, Tim suggests that modern authors are obsessed with mental suffering and impasse: ‘Slowly you get the feeling that only mental suffering and impasse confer dignity and nobility’.

I have just read Sex is Forbidden to see whether it sheds any light on the effect that meditation had on Tim’s writing. This novel tells the story, in first person, of a rather naughty young woman who has spent several months at a meditation institute both as a meditator and as a voluntary helper (server) following a traumatic experience. Despite segregation of sexes at the institute, the young woman almost ends up in another relationship with an older man, after she stumbles on his diary and reads it. The main character is likeable, the challenges facing her are interesting and the story-line seems plausible. At the end, however, I was left unsure of how well Tim had actually managed to capture what might be happening in the mind and emotions of the young woman. (I went looking for reviews by women, but the only review I found that attempted to deal with the issue was by an opinionated man.)

The relevant point, however, is that while this novel is focused on mental suffering it manages to end on a hopeful note. We know that while the main character is unlikely to live happily ever after, her chances of living a happy life have improved.

Tim made a similar point in an interview with Jan Wilm:

 ‘So has meditation changed my writing? I’m not sure. … What I am talking about in a lot of my books is this process whereby you get yourself into a position from which there is no way out. Which is also a way of saying, the whole way you’ve structured your mental life actually doesn’t fit the nature of reality, because when you carry on in the way your map tells you to, you always end in a place on the territory where there’s nowhere to go. A lot of life feels like that to me. The different thing about The Server—and I was quite surprised about this when I wrote the end of the novel—is that here there is a feeling that, if nothing else, that period in the meditation retreat has helped these two people to avoid one more catastrophe, one more dead end. And that the girl, if not the man, has maybe moved on ever so slightly. She is not stuck, she seems able to move forward. I was quite surprised by my optimism’.