Economists start to consider that money can't buy happiness

Obsession with GDP as a measure of how good people feel is losing its grip against concerns for welfare and sustainability

…But with unemployment still rising, taxes going up and personal debt still high, the public may decide they do not feel any better just because of a couple of abstract numbers that don’t correspond to their own experiences. And Britain is far from the only country to have discovered in the past two years that a record of rapid GDP growth does not guarantee long-term prosperity, let alone fairness or environmental sustainability.

Indeed, with the issue of climate change becoming ever more urgent and a growing recognition that economic growth does not make people any happier, there are growing calls for growth and the endless consumption of ever more material goods to be downgraded as political goals.

The pursuit of growth and endless rises in consumption every year have become part of the national psyche, since Harold Macmillan told the electorate they had “never had it so good”. The idea that more, bigger and cheaper is better is a powerful one, and it will be hard to dislodge. It affects the way we think, the things politicians aim for and how journalists report events.

Rises in economic output, a company’s sales or house prices are invariably considered good, rises in petrol prices bad. But debate is growing. Just as he sparked a furore last year about whether the activities of the City were good for society, Financial Services Authority chief Adair Turner last week questioned whether economic growth was a “false god”. He said that not only did growth harm the climate by increasing emissions of greenhouse gases, but “all the evidence shows that beyond the sort of standard of living which Britain has now achieved, extra growth does not automatically translate into human welfare and happiness”.

Guardian