After reading Professor Andrew Oswald’s recent article in The Economist about the 
pathetic state of British academics in the field of economics, I looked into his 
interesting April 1997 study on “Happiness and Economic Performance”.  In that study 
he offers a much-needed reminder that economic growth is only a means to an end.  
Economic things (more GDP, a lower CPI, etc) only matter in so far as they make people 
happier.  And here, Oswald finds paltry work from economists in studying the key 
question at the heart of the human condition – a question that knows no national 

 “What makes people happy?”

His review of the work accumulated in pursuit of the answer suggests a few key points:

1. Better economic performance and growth does not mean more happiness.
2. Happiness is relative.  The human tendency is to compare themselves with each 
other.  In addition, people constantly raise their aspirations, giving the appearance 
that the human lot doesn’t improve over time.
3. Happiness is often gender-specific, and dependent upon age.  
4. Happiness can differ from country to country.
5. The key driver and source of UNHAPPINESS is unemployment and underemployment. 

I wonder, does this mean that the primary goal of policy-makers should be full 
employment, forsaking all others?  Should the goal of economic policy be the reduction 
of unhappiness?  Should the members of the Federal Open Market Committee of the 
Federal Reserve throw their beige books out the window and instead sit on park benches 
in the Washington Mall and count the number of frowning passerbys?

And what about policy-makers in Finland?  I've been to Helsinki, and I recall that 
almost everyone walks around frowning all the time.  Imagine the challenge there!

New York, NY

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