Policy fetishism about GDP is being replaced by an unthinking devotion to simplistic happiness indicators, warns Annie Austin.

“In a decade’s time we’re going to be using happiness as the sole basis for judging the impact of public policy.”

So stated Paul Dolan recently in the opening sequence of ITV’s Tonight programme, entitled ‘Is Britain Happy?’.

The idea that data on well-being can be used to guide public policy has steadily gained popularity in the UK over the past decade, reflecting wider international trends –examples include the Canadian Index of Wellbeing and the OECD’s Better Life initiative. The common theme of these initiatives is a recognition of the need to go beyond GDP as the principal measure of national wellbeing and progress.

In the UK, the ‘Measuring National Well-being: Measuring What Matters’ programme was launched in 2010 by David Cameron, with the Office for National Statistics (ONS) taking the lead in this radical shake-up of how public policy is designed and evaluated.

The move towards social indicators that go beyond GDP is to be welcomed. It has long been accepted that GDP is a woefully inadequate measure of national well-being; as Bobby Kennedy put it in 1968, this type of macro-economic indicator “measures everything, in short, except that which makes life worthwhile.” So any movement away from the “GDP fetishism” that has characterized industrialised countries since the post-war Bretton Woods agreement must be positive.

In the UK, the ONS developed a framework comprising ten domains of well-being, including health, relationships, work, the natural environment and political participation. The Measuring National Well-being framework provides a multi-dimensional, objective definition of well-being, based on extensive consultation with the British public about what makes their lives worthwhile.

One of the domains in the framework is subjective well-being (SWB), which measures people’s psychological state, including how happy and satisfied they feel with their lives. While SWB is officially on an equal footing with the other domains, it is believed in many quarters that subjective well-being in fact provides a useful summary of overall well-being and quality of life.

Indeed, many influential actors in British policy circles agree with Dolan’s analysis and advocate the use of SWB as a summary metric and a ‘yardstick’ for policy. For example, the final report of the Legatum Institute’s 2014 Commission on Wellbeing and Policy includes, as a technical annex, a fully-worked-through policy cost-benefit analysis based not on standard econometrics, but on SWB data. A huge literature around the ‘New Science of Happiness’ provides legitimacy for this type of thinking, and many of the ONS reports associated with the Measuring National Well-being programme use the term ‘well-being’ simply as shorthand for the psychological state of happiness and satisfaction.

There are, however, serious problems with the SWB-yardstick approach to public policy. The main concern is that SWB is not a reliable indicator of true, objective well-being – that is, multi-dimensional wellbeing defined in terms of the things that people say matter to them and make their lives worthwhile.

The issue is that SWB is subject to the problem of adaptive preferences: people often modify their preferences and desires in accordance with available options. For example, very poor and disadvantaged people may adapt to their deprivation and mark themselves high on the life-satisfaction scale, but high levels of SWB in this context might just reflect cheery endurance and making the best of a bad lot; it should not mean that poverty be ignored by policy.

This shows that, as a stand-alone measure, SWB is an unreliable indicator, because subjective and objective well-being can come apart in worrying ways. Stable SWB may mask important variation in the objective quality of people’s lives; indeed, Gallup data show that SWB in the UK remained stable during the recent economic crisis, which led to significant, objective hardship for many people. This problem is particularly relevant to the most vulnerable, leading to the risk of policy failing to address the structural causes of deprivation.

In view of this fundamental problem, what explains the popularity of SWB as a policy yardstick? The answer probably lies in the fact that SWB and GDP share common historical roots in the utilitarian paradigm.

In 1789, the classical liberal philosopher Jeremy Bentham defined utility as “… pleasure, good, or happiness”, and declared this to be the supreme aim of human existence. More recently, under the neo-liberal paradigm, utility came to be defined in terms of preference satisfaction, achieved through the consumption of goods and services – hence the dominance of GDP as the main measure of national well-being.

However, the ‘new science of happiness’, heralded by papers with titles such as ‘Back to Bentham: explorations of experienced utility’, allows individual utility to be measured directly at source through questionnaires, rather than having to be inferred from the national accounts. Moreover, average SWB is a simple, uni-dimensional, quantitative, headline metric that lends itself to the standard methods of cost-benefit analysis in the planning and evaluation of public policy.

In other words, the common heritage and mutual compatibility of SWB and GDP as measures of national well-being help to explain the emergence of the hegemony of happiness, and SWB’s close fit with the neo-liberal worldview explains why the ‘new science of happiness’ has been incorporated so seamlessly into discourses around national well-being in the UK.

In summary, national and international trends in the use of well-being data for public policy represent positive and progressive change, away from economy-centered growth to people-centered progress. However, the evidence suggests that the well-being agenda in the UK is being hijacked by utilitarianism, with GDP fetishism simply being swapped for a hegemony of happiness. GDP and SWB are close cousins; a truly radical model would go beyond both.

This blog is extracted from a working paper, On well-being and public policy: Are we capable of questioning the hegemony of happiness?, published by the Cathie Marsh Institute for Social Research, University of Manchester.