How happy are you? That might seem like an odd question from an economics writer, but to me it’s always been relevant. Assumptions in economics usually side with students wanting more beer than books. With me not drinking alcohol, that assumption always confused me.
The point is economists tend to measure things like “economic growth rates.” The higher they are the better we think the populace is. However as everybody knows sometimes even when you have everything, folks aren’t happy. Finding and measuring that happiness degree is every economist’s challenge.
That’s currently going on in Rome. A conference sponsored by the Organization for Economic Co-operation and Development has brought economists, sociologists and other policy mandarins together to find some way to measure happiness.
That brings visions of bureaucrats aimlessly looking out the window. For the rest of us we surely have different measures of happiness, though some of us would like to have some of those sunshine jobs of looking out the window for just one day. However, at one time in my life I would often discuss happiness in an economic sense. It was taught to me as a student of economics at the University of Guelph.
Those economics professors used to talk about the “utility curve”. In essence it was a measurement of utility, which over a range of values resembled a curve on a piece of graph paper. “Marginal utility” refers to that extra utility you get from one incremental unit of effort you put into the process.
Of course many of you might wonder what “utility” meant. Utility was an economic term, which meant “satisfaction” or “enjoyment” or “fun.” So as economics students we’d often talk about how much “marginal utility” (or fun) we could get from any particular activity, like going to a game, taking part in an athletic activity, having a coffee or simply going on a date. Back in those days, “marginal utility” probably had much more to do with testosterone than any economic growth rate.
So wouldn’t it be interesting if I could not only give you our Canadian economic growth rates, but also our annual Canadian “utility” index. For instance do people in Chatham-Kent have more fun than those in Drumondville Quebec? Do these people having fun have a better grasp of what they’ll do in the future, like life expectancy, employments choices and marriage duration. And at the end of the day, will they make more money and invest it with gusto on a more consistent basis.
The answers to these questions are most likely yes, yes and yes again. If there were economic predictors, which would pick this up easier, public policy could be better directed to foster this synergy between the mind and the money we make. The Bank of Italy, the Economic and international Studies of the University of Rome and the Joint Research Center of European Commission also sponsor the two-day conference in Rome along with the OECD. Sounds like a party to me.
Of course why is it taking place in Europe and not Toronto, Detroit, Boston or Calgary? Is it because the Europeans have a totally different view of economic prosperity than we do? Is it because European lifestyles are more attune to cradle to the grave welfare systems, which takes care of their people? Or is it simply preposterous to have such a conference here in North America where our high stress, high tech economy measures economic progress in real hard numbers. It’s hard to say.
Rewind to the students trading off their beer for their books. The analogy is given to every first year college economics class. The point being there is a trade off between drinking beer and getting good marks. The analogy was extrapolated into the reality that economics is about “measuring scarcity.” There is only so much beer, books and time. To the gathered students, make your choices wisely. Finding an efficient mix of them all is the best choice.
Sadly many of my buddies that first year in college chose too much beer and too little books. I chose no beer and as few books as I could stand. Others surely had a better mix. The question is who had more fun and did that aid them in their economic journey through life. There are certainly some this week gathering in Rome who thinks there is some economic value to finding out.
In my earlier life I remember a song by Cyndi Lauper called “Girls Just Want to Have Fun”. That song still resonates with me even after all these year. To those economists gathered in Rome this week, I say, “God Speed.” I’ll take a little fun with my economic growth rates any day.