the political economy of unhappiness(davies)-nlr 71 sep-oct 2011

8/3/2019 The Political Economy of Unhappiness(Davies)-NLR 71 Sep-Oct 2011

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new left review 71sept oct 201165

william davies

THE POLITICAL ECONOMY

OF UNHAPPINESS

For the majority o its history, Britains National Health

Service has scarcely ever considered the specic health needso working people, other than those o its own sta. Almost

by denition, the nhs was originally dedicated to supporting

people who were outside o the labour marketnew mothers, children,

the sick, the elderly and the dying. British doctors issued sick notes, cer-

ticates that were given to patients, inorming their employers that they

were unable to work. But in recent years policy-makers have begun to

challenge these assumptions, along with the binary split between health

and illness, economically productive and economically needy, on whichthey rested. In 2008, a review o the health o Britains working-age

population was published jointly by the Department o Health and the

Department o Work and Pensions. Most strikingly, it calculated that the

annual cost to the British economy o health-related absence rom work

was 100bn, only around 15bn less than the entire cost o the nhs.1

Wellbeing provides the policy paradigm by which mind and body can

be assessed as economic resources, with varying levels o health and pro-ductivity. In place o the binary split between the productive and the sick,

it oers gradations o economic, biological and psychological wellness.

And in place o a Cartesian dualism between tasks o the body and those

o the mind, blue and white collar, proponents o wellbeing understand

the optimization o mind and body as amenable to a single, integrated

strategy. One o the leading infuences on the uk governments work and

wellbeing programme, Gordon Waddell, is an orthopaedic surgeon whose

book The Back Pain Revolution helped transorm policy perspectives onwork and health. Contrary to traditional medical assumptionsthat rest

and recuperation are the best means o getting the sick back to work


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66nlr 71Waddell argued that, in the case o back pain, individuals could recover

better and aster i they stayed on the job.

Waddells ndings suggested that, even where work is primarily physical,

medical and economic orthodoxy had underestimated the importance o

psychological actors in determining health and productivity. Being at

work has the psychological eect o making people believe themselves

to be well, which in turn has a positive eect on their physical wellbeing.

Hardt and Negri argue that, while immaterial or cognitive labour still

only accounts or a small proportion o employment in quantitative

terms, it has nevertheless become the hegemonicorm o labour, serving

as a vortex that gradually transorms other gures to adopt its central

qualities.2 Waddells work is a case o this transormation in action. Theemerging alliance between economic policy-makers and health proes-

sionals is generating a new consensus, in which the psychological and

immaterial aspect o work and illness is what requires governing and

optimizing, even or traditional manual labour. In place o the sick note,

a new t note was introduced in 2010, enabling doctors to speciy the

positive physical and mental capabilities that a patient-employee still

possessed and which an employer could still put to use.

There was another, more urgent reason or the new policy paradigm. As

labour has become more immaterial, so has the nature o health-related

absence rom work. Some 3040bn o the annual 100bn lost to the

uk economy through health-related absence was due to mental-health

disorders.3 Around a million people in the uk are claiming incapacity

benet due to depression and anxiety.4 Figure 1 indicates the gradual

dematerialization o incapacity over recent years. The turn towards

wellbeing, as a bio-psycho-social capacity, enables employers andhealthcare proessionals to recognize the emotional and psychological

problems that inhibit work, but also to develop techniques or getting

employees to improve their wellbeing and productive potential. Even

more than back pain, mental illness is considered to be better treated

by keeping people in work, than absenting them rom it. In contrast to

1 Health, Work and Well-being Programme, Working or a Healthier Tomorrow: DameCarol Blacks Review o the Health o the Working Age Population, London 2008.2 Michael Hardt and Antonio Negri, Multitude: War and Democracy in the Age oEmpire, London 2004, p. 107.3 ukdwp, Working Our Way to Better Mental Health, 2008.4 Richard Layard et al, Cost-Benet Analysis o Psychological Therapy, NationalInstitute Economic Review, vol. 202, no. 1, 2007.


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davies:Unhappiness67

a neo-classical or utilitarian perspective, which would treat work as theopposite o utility, many economists also now argue that work is a posi-

tive orce or mental health, and that unemployment causes suering

out o any proportion to the associated loss o earnings.

Depressive hegemony

Depression is the iconic illness in this respect. Indeed, we might say

that i immaterial labour is now the hegemonic orm o production,depression is the hegemonic orm o incapacity. Typically, depression is

characterized by a lack o any clear clinical denition; indeed it is oten

dened as anything that can be treated with anti-depressants.5 Depression

is just sheer incapacity, a distinctly neo-liberal orm o psychological de-

ciency, representing the fipside o an ethos that implores individuals to

act, enjoy, perorm, create, achieve and maximize. In an economy based

in large part on services, enthusiasm, dynamism and optimism are vital

workplace resources. The depressed employee is stricken by a chronicdefation o these psycho-economic capacities, which can lead him or her

Figure 1. Incapacity-benefts claimants by primary medical condition

Source: dwp Administrative Data.

5 Alain Ehrenberg, The Weariness o the Sel: Diagnosing the History o Depression in theContemporary Age, Montreal 2008.

Musculoskeletal

Circulatory and respiratory

Injury and poisoning

Nervous system

Mental and behavioural

Other

1996 1998 2000 2002 2004 2006 2007

%

100

90

80

70

60

50

40

30

20

10

0


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68nlr 71to eel economically useless, and consequently more depressed. The work-

place thereore acquires a therapeutic unction, or i people can somehow

be persuaded to remain in work despite mental or physical illness,

then their sel-esteem will be prevented rom alling too low, and their

bio-psycho-economic potential might be rescued. Many o the uk govern-

ments strategies or reducing incapacity-benet claims and health-related

absence ocus on reorienting the Human Resources proession, such that

managers become better able to recognize and support depressed and

anxious employees. Liting the taboo surrounding mental illness, so as to

address it better, has become an economic-policy priority.

In the early 1990s, the study o the psychological eects o unem-

ployment was the catalyst or a new and rapidly expanding branch oneo-classical economics: happiness economics.6 Together with the

concept o wellbeing, happinesssometimes reerred to as subjective

wellbeingprovides policy-makers with a new analytical tool with which

to measure and govern economic agents. It represents one prominent

attempt to cope with the crisis o measure that arises when capital-

isms principal resources and outputs are no longer solely physical, yet

still require economic quantication in order to be valued. At an aggre-

gate level, concern or the happiness o entire nations, and the ailure oeconomic growth to improve it, has inspired political leaders to demand

new ocial indicators o social and economic progress, which account

or this intangible psychological entity. President Sarkozys Stiglitz

Commission on the measurement o national progress made headlines

around the world, while the Australian, American and British statistical

agencies are already collecting ocial data to track national happiness

levels.7 The gap between growth in material and psychological prosperity,

known as Easterlins Paradox ater a 1974 article on this topic by econo-mist Richard Easterlin, is soon to receive ocial endorsement.8

Unhappiness has become the critical negative externality o con-

temporary capitalism. In addition to the policy interventions already

mentioned, the New Labour government introduced an Increasing

6 The seminal article was Andrew Oswald and Andrew Clark, Unhappiness and

Unemployment, Economic Journal, vol. 104, no. 424, 1994.7 Jean-Paul Fitoussi, Amartya Sen and Joseph Stiglitz, Report o the Commission onthe Measurement o Economic Perormance and Social Progress, 2009.8 Richard Easterlin, Does Economic Growth Improve the Human Lot? in Paul

David and Melvin Reder, eds, Nations and Households in Economic Growth: Essays inHonor o Moses Abramovitz, New York 1974.


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davies:Unhappiness69Access to Psychological Therapies (iapt) programme, to make Cognitive

Behavioural Therapy more widely available via the nhs. Richard Layard,

an economist at the London School o Economics appointed by Blair

as the uks happiness tsar, stressed the economic signicance o this

programme, urging that it be expanded urther in response to rising

unemployment. The sheer inefciency o depression, and the eciency

ocbt in tackling it, is demonstrated by Layard in a paper making the

business case or spending more public money on talking cures.9cbt,

and policy enthusiasm or it, is controversial amongst psychotherapists

and psychologists, many o whom view it as a sticking plaster which

conceals mental illness, at best or limited periods o time.10 Yet, by vir-

tue o being clearly time-limiteda course ocbt can last a mere six

sessionsand output-oriented, it is amenable to an economic calculusin a way that traditional psychoanalysis or psychotherapy are patently

not. Programmes or getting unemployed people back to work in the

uk now oer cbt courses, in an eort to re-infate their desire to

overcome economic odds.

Thinking pleasure

Optimistic theorists o cognitive capitalism, such as Hardt and Negri,believe that the positive externalities or spill-over eects associated with

immaterial production create the conditions or a new commons. Eorts

to measure and privatize human, intellectual and cultural resources must

ultimately ail; the hegemonic character o immaterial labour means that

the most valuable economic resources are becoming socialized, despite

the best eorts o capital to prevent this. The proposition I wish to inves-

tigate here is in some ways the inverse: while policy-makers, doctors and

economists seek to contain the negative externality o unhappiness asa measurable psychological deciency and economic cost, it has inher-

ently political and sociological qualities that lend it critical potential. One

contradiction o neo-liberalism is that it demands levels o enthusiasm,

energy and hope whose conditions it destroys through insecurity, power-

lessness and the valorization o unattainable ego ideals via advertising.

What is most intriguing about the turn towards happiness amongst

political elites and orthodox economists is that it is bringing this truth to

the ore, and granting it ocial statistical endorsement. Even a cursory

9 Layard et al, Cost-Benet Analysis.10 See Oliver James, Therapy on the nhs? What a Crazy Waste o 600m!, DailyMail, 24 October 2006.


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70nlr 71examination o the evidence on unhappiness in neo-liberal societies

draws the observer beyond the limits o psychology, and into questions

o political economy.

For heuristic purposes, let us grant that the terms happiness and

unhappiness can be conceptualized in three dierent registers. The rst

is merely mental and utilitarian, where happiness is primarily under-

stood as the immediate experience o pleasure, or hedonia. Unhappiness

would thereore reer to some breakdown o consumer choice, personal

relationships or neuro-chemical processes, with depression becoming a

proxy or these. The second is ethical and teleological, where happiness

is understood as the attainment o a good lie, or eudaimonia. Within

this register, unhappiness represents a lack o positive capability to actmeaningully in pursuit o ones own substantive goals; unhappiness,

rom this perspective, would be akin to what republican thinkers term

subjection to domination. And the third is historical and messianic, the

endlessly delayed promise o Enlightenment. This is the tragic teleology

o the Frankurt School, whereby we experience the possibility o happi-

ness via its apparently perpetual absence, butlike Kantmust retain

some distant aith in a collective human telos, i only because critique is

impossible without it.

To the extent that these dierent registers can be kept ontologically sepa-

rate, the emerging regime o wellbeing policies and measurement can

successully contain unhappiness as a neuro-psycho-economic phenom-

enon. And yet, as the recent statistical interest in social and economic

progress suggests, the neo-classical discourse surrounding happiness

and unhappiness invariably strays into ethical, then teleological, and

then critical terrain. On the one hand this leads to an instrumentaliza-tion o critical, ethical and Enlightenment concerns (as the measurement

o historical progress would suggest); but on the other, the contradic-

tions and injuries o neo-liberal capitalism start to show up within the

very positivist bodies o knowledge that are intended to regulate and sus-

tain it. I the need to lend a voice to suering is a condition o all truth,

perhaps liberal economics is on the verge o uncovering truths that it

never previously imagined.11

Capitalism would seem to require an optimal balance o happiness and

unhappiness amongst its participants, i it is to be sustainable. The need

11 Theodor Adorno, Negative Dialectics, London 1973, pp. 1718.


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davies:Unhappiness71or dissatisaction is implicitly recognized by Keynesian economics, which

sees the capitalist system as threatened by the possibility o individual

or collective satisaction, maniest as a demand shortall. Capitalisms

gravest problem is then how to maintain governments or consum-

ers in a state o dissatised hunger, and how to nd ever more credit

through which to eed that hunger. The dening dierence between

the Keynesian era and the neo-liberal era was simply that the ormer

depended on an insatiable, debt-uelled, unhappy state, whereas the

latter depended on an insatiable, debt-uelled, unhappy consumer. The

question o who or what is to inject such an appetite in uture has no

apparent answer as yet.

Max Weber, and more recently Luc Boltanski and Eve Chiapello in TheNew Spirit o Capitalism, addressed a parallel problem, but via moral and

cultural sociology. To what extent and on what basis must capitalism

serve our human needs and desires, i we are to remain committed to

it? Immaterial needs and desires play a key role, as these are less easily

exhaustible than material ones. As Boltanski and Chiapello argue:

Whereas capitalism, by its very nature, is an insatiable process, people are

satiable, so that they require justications or getting involved in an insatia-ble process. It ollows that capitalism cannot make do with oering nothing

more specic than its inherent insatiability.

The culture o capitalism must keep individuals suciently dissatised

that they continue to seek satisaction rom it, but not so dissatised that

they reject or resist it outright. Boltanski and Chiapellos central argu-

ment is that capitalism has drawn on varieties o anti-capitalist critique in

generating the spirit which induces a sucient mass o the population

to remain at this nely tuned level o engagement. At key moments ocrisis, capitalist accumulation has alternately drawn on those criticizing

its unairness (the social critique) and those criticizing its dullness (the

artistic critique) in order to nd routes to its own survival.12 In prom-

ising to answer these critics, it pledges to treat the moral and human

injuries that it itsel has enacted, thereby renewing its legitimacy.

The spirit o capitalism regulates the political economy o unhappiness,

aiming to ensure that individuals nd partial ullment in work andconsumption. I they ound no ullment, there would be a risk that

12 Luc Boltanski and Eve Chiapello, The New Spirit o Capitalism, London and NewYork 2006, pp. 486; 27.


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72nlr 71they might opt out; yet i they ound too much ullment, this could

signiy a satisaction o desire that is anathema to an economic sys-

tem that depends on desire remaining inexhaustible. Real happiness,

Adorno reminds us, would mean no longer seeking ever more and ever

newer sources o satisaction. Real progress would mean abandoning

the obsession with technical and economic progress. Far saer, there-

ore, or the capitalist to promise substantive eudaimonia, but to deliver

only a taste o it, or substitute it or a more instant hedonicexperience

that leaves the individual still wanting more. During periods o stabil-

ity, capitalism successully regulates this distribution o happiness and

unhappiness. That unhappiness is now appearing as a costly and threat-

ening negative externality to be tackled by the state suggests that this

equilibrium is breaking down.

Industrial psychology

Boltanski and Chiapello examine the new spirit o capitalism via human-

resource management texts which, as they point out, must go beyond

the narrow prescriptions o neo-classical economics and argue or more

than the pursuit o eciency and prot. From Hugo Munsterburgs

1912 Psychology and Industrial Efciency onwards, management theoryhas depended ar more on the insights o applied psychology than on

the harsh rationalism o Taylorism or economics.13 Human Resource

Management emerged rom the industrial psychology studies o Elton

Mayo in the 1920s, developed via the amous Hawthorne experiments

o the 1930s, and expanded under the infuence o the psychologist Kurt

Lewin in the post-war period to engage with theories o group behaviour,

as explored by Lewin and the Tavistock Institute during the 1950s.14 The

discourse o management theory is, strikingly, both instrumentalist andmoral. It is instrumentalist inasmuch as it sel-evidently exists to serve

the interests o managers and those principals on whose behal man-

agement acts, namely the owners o capital. But it is moral inasmuch as

13 Frederick Taylor himsel was o course an engineer, not a psychologist, and hisPrinciples o Scientifc Management (1911) consequently oers little to the employerconcerned with motivation and morale.14 See Loren Baritz, The Servants o Power: A History o the Use o Social Science in

American Industry, New York 1960; Stephen Barley and Gideon Kunder, Design andDevotion: Surges o Rational and Normative Ideologies o Control in Managerial

Discourse, Administrative Science Quarterly, vol. 37, no. 3, 1992; Peter Miller andNikolas Rose, The Tavistock Programme: The Government o Subjectivity and

Social Lie, Sociology, vol. 22, no. 2, 1988.


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davies:Unhappiness73it takes seriously the need or happiness, respect, engagement and com-

munity, at least within groups. This morality is not a complete sham.

Rather, instrumental and substantive reason are wedded together in

psychological concepts such as teamwork and leadership, whereby

employees are viewed as morally endowed, emotional beings to be mobi-

lized and co-operated with.

Advertising is no less important in producing and regulating the new

spirit o capitalism. It too conducts a subtle game o instrumentalizing

unhappiness and dissatisaction with capitalism as a motivation or con-

sumption. This was witnessed as early as the 1920s, when American

marketers targeted a growing collective sense o ennui and alienation

rom urban-capitalist existence, a eeling that more innocent, depend-able relations were being lost. The images used to sell products during

the 1920s and 30s were specically drawn rom a social ideal o tradi-

tional amily and community lie that industrial capitalism appeared to

be destroying.15 By the 1960s, advertising was tapping into rustrations

with bourgeois and bureaucratic routines, speaking to the counter-

culture even as it was rst emerging.16 Advertising, like management

theory, is uelled by a critique o the dominant normative-economic

regime within which it sits, acilitating sae acts o micro-rebellionagainst the macro-social order. It acts as capitals own trusted moral and

artistic critic in order to inspire additional psychological engagement on

the part o ordinary worker-consumers. Dissatisaction is reduced to a

psychological tendency to be ed back into processes o production and

consumption. As a result, understanding such psychological qualities

as impulse, libido and rustrationoten in the micro-social context

o the ocus grouphas been key to the development o advertising

since the 1920s.

As tools o economic administration and legitimation, neo-classical

economics and psychology have had a relatively clear, yet mutually sup-

portive, division o labour since their split at the start o the twentieth

century. The pioneering economists o the 1870s and 80s did engage with

questions regarding psychological states, as it was in the subjective expe-

rience o happiness that they placed their concept o value, in contrast to

15 See Stuart Ewen, Captains o Consciousness: Advertising and the Social Roots oConsumer Culture, New York 1976.16 Thomas Frank, The Conquest o Cool: Business Culture, Counter-culture and the Riseo Hip Consumerism, Chicago 1998.


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74nlr 71the labour theory o value o classical political economy. In 1881, Francis

Edgeworth even went as ar as proposing the creation o a hedonimeter,

a measurement device that would gauge levels o mental pleasure as the

basis o a new economic science.17 But ater Marshall and Pareto had dis-

tanced themselves rom this largely speculative concern with the psyche,

and with psychologists developing experimental techniques in the late

1890s, neo-classical economics cut itsel o rom any empirical concern

with the mind. It opted instead to study preerences via choice-making

behaviour, on the methodological presupposition that this was a perect

representation o how pleasure and pain were experienced.

This ormal premise, oten reerred to as homo economicus, enabled a

clean split between neo-classical economics and empirical psychologythat lasted or most o the twentieth century. The mental realmlike the

social realm, which was also acquiring its own specialist branch o social

sciencewould be external to the territory o neo-classical economics.

Economics could thereby ocus purely on questions o rational choice

and eciency, leaving the study o irrational behaviour and equity to

the rival social sciences o psychology and sociology. Not least, it helped

to dene what counted as economic in the rst place, through designat-

ing the limits o market logic. Neo-classical economics was an adamantlyamoral, rationalist science, which could be employed as a neutral tool

to regulate and delineate markets, but did not recognize happiness or

unhappiness as anything other than a calculable, utilitarian phenom-

enon, subject to a logic o price. Similarly, any assessment o social or

political action would be on eciency grounds alone, or what ollowing

Arthur Pigou became known as market ailure grounds. Chicago econ-

omists, led by Gary Becker and Ronald Coase, later went urther still in

establishing eciency explanations or various social and normativeinstitutions and practices, such as marriage, law and rms.

The mind and its injuries are now being brought within the purview

o mainstream economics and subject to an eciency analysis. The

implication o the wellbeing policy agenda is that dynamics o happi-

ness and unhappiness, satisaction and dissatisaction, can no longer be

let in the hands o applied psychologists and their colleagues in man-

agement and marketing. Neo-classical economics has hitherto avoided

17 David Colander, Edgeworths Hedonimeter and the Quest to Measure Utility,Journal o Economic Perspectives, vol. 21, no. 2, Spring 2007.


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davies:Unhappiness75directly conronting the immaterial nature o Western post-industrial

capitalism, disguising it with the metaphor o human capital, which

treats the mind as analogous to physical xed capital, such as machinery.

But persistent, stultiying unhappiness represents a orm o negativity

that can neither be contained within the psychological techniques o

marketing and management, nor explained within the rationalist logic o

inadequate human capital investment. Negativity, primarily in the orm

o depression, is being conronted at a societal level as a bio-psychological

epidemic that undermines the viability o post-industrial capitalism.

To respond to this particular crisis o measure, economics and psy-

chology are being orcibly re-married. Behavioural and experimental

economics have their earliest origins in game theory in the 1940s, whichallowed economists and psychologists to compare normative rational

choice-makingthat is, according to neo-classical economicswith

empirical choice-making, as observed under laboratory conditions. The

gap between economists prescriptions or how people should behave

and what they actually do became subject to testing. Discovering pat-

terns in such anomalies became the preoccupation o behavioural

economists, ollowing Kahneman and Tverskys landmark 1979 article

on prospect theory, which later won them a Nobel Prize.18

The economic study o happiness has dierent antecedents, but led in a

similar direction. Hadley Cantrils 1965 The Pattern o Human Concerns

represents the rst attempt to measure and compare the happiness o

entire nations, and provided much o the data used by Easterlin in his

1974 article comparing gdp growth with happiness growth. The late

1960s also witnessed the birth o the positive psychology movement,

ocused on psychological optimization rather than normalization, andthe birth o the social indicators movement, which sought to meas-

ure various intangible socio-economic assets, including wellbeing.

Psychologists came to enquire into sources o happiness or the rst

time, developing new scales and questionnaires with which to do so,

while social-indicators researchers employed survey techniques and

questionnaires to measure immaterial assets, inormal interactions and

quality o lie. This coincided with an emerging awareness o depres-

sion as a mental afiction, challenging the techniques o psychoanalysis

18 Daniel Kahneman and Amos Tversky, Prospect Theory: An Analysis o Decision

Under Risk, Econometrica, vol. 47, no. 2, 1979.


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76nlr 71that had been developed principally to relieve patients o neuroses and

eelings o guilt. Depression, by contrast, necessitated techniques or

mental reactivation, which cbt, a derivative o positive psychology, now

promised to deliver.

Thanks to the new empirical techniques and data sets, economists could

start to spot anomaliescases where human happiness does not rise

and all as neo-classical economics would predict. At the centre o hap-

piness economics sits the psychological concept o adaptation, the

extent to which individuals do or do not become psychologically attuned

to changes in their circumstances. Where they do adapt to changed

circumstancesor example, o increased monetary income or national

wealththeir happiness ceases to correspond to changed objective con-ditions, at least ater the transition has passed. Where they do not adapt

to changed circumstancesas with unemploymenttheir happiness

remains directly proportionate to their objective conditions, regardless

o how long they have lived with them.

Happiness economics took o during the 1990s, drawing on data pro-

vided by a number o national household surveys, which had included

questions on subjective wellbeing rom 1984 onwards. With it hascome the rise ohomo psycho-economicus, a orm o economic subjectivity

in which choice-making is occasionally misguided, emotional or subject

to social and moral infuences. I homo economicus was unhappy, that

was merely because he had insucient money or consumer choice. But

homo psycho-economicus suers rom psychological afictions as well.

He makes mistakes because he ollows others too instinctively; he con-

sumes things which damage his health, relationships and environment;

he sometimes becomes unhappyor even happyout o all proportionto his material circumstances.19

Regulating wellness

Homo psycho-economicus is less rational, less calculating, than homo

economicus; but to what extent is he a social creature? Wellbeing policies

19

The eld o neuro-economics is expanding rapidly, convincing some economiststhat the question o what truly makes people happy and unhappy will soon be

placed on an objective ooting, no longer requiring surveys at all. See or exampleRichard Layard, Happiness: Lessons rom a New Science, London 2005.


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davies:Unhappiness77can be seen as eorts to get people to conorm more closely to the ideal

o neo-classical rationality, and the Robinson Crusoe rugged individual-

ism that it assumes. But the re-engagement with psychology eventually

necessitates the rediscovery o sociability, i only via the importance

o groups, therapy and psychological norms. Service-sector capitalismdraws precisely on those innate human capabilitiessociability, mental

activity, creativity, communicationthat neo-classical economics had

treated as externalities; hence the non-economic becomes more valu-

able than the economic (narrowly understood).

What is new today is that the state is now stepping in to conront psycho-

logical problems o motivation and dissatisaction that were previously

the concern o management and hr proessionals.20 The nhs is beingmobilized to increase the bio-psychological potency o the working-age

population, not as a social externality to the labour market, as embodied

by the sick note, but as an asset within it, as certied by the t note.

Nudging individuals to take better decisions or their bodies, old age,

environments and amiliesas prescribed by Nudge, a best-selling work

o behavioural economics, allegedly required reading or Camerons

coalition Cabinethas become a policy strategy or aligning psycho-

logical impulses with longer-term economic eciency.21 Again, ratherthan treat problems such as obesity, economic insecurity, environmen-

tal degradation and bad parenting as social, normative or psychological

issues that are beyond the limits o markets and economics, the emerg-

ing economic logic treats them as ineciencies that can be dealt with

through better management o consumer choice. Competition regula-

tors are now importing lessons rom behavioural economics, to ensure

that the choice architectures presented to consumers do not imperil

their capacity to take the right decision. This is a signicant disavowalo the Hayekian, neo-liberal model o the state, that ocused on creating

the market conditions within which diverse consumer preerences could

be pursued as eciently as possible.

20 The hr proession is also taking on healthcare responsibilities that were pre-

viously the preserve o the state. More employers now oer gym membership,physiotherapy, smoking-cessation programmes and even psychological counsel-

ling, as part o their own wellbeing programmes. See Building the Case or Wellness,

PriceWaterhouseCoopers, 2008.21 Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health,Wealth and Happiness, New Haven 2008.


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78nlr 71In an age when the most valuable assets and products are intangible and

cognitive, accounting techniques have to somehow include capacities

to think, eel and communicate. Minds must be measured, valued and

invested in, even i this means opening up economics to the possibility

that people are irrational, social and moral creatures. Ater all, their

sociability and morality may also yield satisactory investment returns.

Future policy proposals include teaching happiness or resilience skills

in schools, while voluntary orms o sociability and git-giving are now

also internal to a governing economic logic, as the British governments

prioritization o The Big Societya neo-communitarian policy pro-

gramme aimed at increasing non-market exchangenow indicates.

The ambiguity that lurks within this emerging apparatus o governmentis that between the hedonicand the eudaimonicregisters o happiness.

The ailure o neo-classical economics, and o neo-liberal regulation

generally, stems rom its excessive commitment to hedonism, the

utility orm o pleasure. The neo-classical assumptionenshrined in

neo-liberal regulatory agenciesthat economic agents are incapable

o making a bad choice, has hit multiple crises, most graphically in

the case o nancial markets, where the quest or psychological kicks

is held culpable or bringing down entire banks. But it is also increas-ingly apparent that insatiable consumption can undermine the potential

or mental wellbeing, and be entirely compatible with depression. Mark

Fisher captures this neo-liberal paradox o happiness in his portrait o

students he once taught at a urther education college:

Many o the teenage students I encountered seemed to be in a state o what

I would call depressive hedonia. Depression is usually characterized as a

state o anhedonia, but the condition Im reerring to is constituted not

by an inability to get pleasure so much as by an inability to do anythingelse except pursue pleasure. There is a sense that something is missing

but no appreciation that this mysterious, missing enjoyment can only beaccessed beyond the pleasure principle.22

The Weberian insight that capitalism cannot sustain itsel only by oer-

ing more money, more choice and more pleasure, is at the heart o this

crisis. The spirit o capitalism is its promise o not only utility or hedonia,

but also o meaning or eudaimonia; not simply psychological-economicgratication, but a orm o ethical ullment and the demonstration o

22 Mark Fisher, Capitalist Realism: Is There No Alternative?, Ropley 2009, pp. 212.


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davies:Unhappiness79innate sel-worth. I a regime o capitalism neglects the latter, it encoun-

ters a moral crisis. Managers and advertisers may have been attuned

to this requirement or the best part o a century, but evidently they

have now neglected their duties, and economic technocrats are coming

to the rescue.

From ill-being to critique

In 2007, the British governments Department or Culture, Media and

Sport was criticized in a cross-departmental Capability Review carried

out by the Cabinet Oce or its poor economic evaluations and inad-

equate ocus on outcomes, a problem it described as urgent.23 The

diculty or dcms is that its output is largely public and intangible; itexists to generate positive externalities, in the orm o creativity, cultural

buzz and sporting prowess. The Culture Minister duly hired a private-

sector economics consultancy to perorm an output evaluation, using

a new public-accounting technique based on happiness economics.24

The method, known as the income compensation technique, poses the

ollowing question: how much private monetary income would be nec-

essary to compensate a person psychologically or the loss o a specic

public good that he or she can currently use or ree? For example, isomeone regularly visits a ree public art gallery, their measured hap-

piness levels may be x per cent higher than someone who does not do

so. It is then possible to assess how much private income this x per

cent dierence corresponds to, using established data on the correla-

tion between happiness and pay. That gure can then be multiplied by

the number o households who visit the gallery in question, to produce

an articial proxy or its market price. The same technique has been

proposed or use by law courts in setting damages payments, where aclaimant has suered some emotional or psychological harm.25

The problem that this technique encounters, rom a policy-makers

point o view, is that it ends up valuing public and non-market goods

at implausibly high levels. Private income is such a weak correlate o

23 Capabilities Review Team, Capability Review or the Department o Culture, Mediaand Sport, 2007.24 Department o Culture, Media and Sport, Making the Case, 2010.25 Andrew Oswald and Nattavudh Powdthavee, Death, Happiness and the

Calculation o Compensatory Damages, in Eric Posner and Cass Sunstein, eds,Law and Happiness, Chicago 2010.


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80nlr 71happiness, when compared to social and public goods, that it oten

takes extraordinarily large monetary payments to compensate or the

loss o non-market goods. The Department o Culture, Media and Sport

study ound that regular attendance o concerts had an impact on hap-

piness equivalent to 9,000 o additional income. Elsewhere, studies

have shown that an unemployed person would need an annual income

o 250,000 to compensate or the psychological injury o not having a

job.26 Economists using the income-compensation technique are aware

that it could potentially justiy common ownership and planning o large

swathes o the economy, on the technical basis that one pound spent col-

lectively generates a ar greater psycho-economic return on investment

than the same pound spent privately. The political ramications o such

a technique have to be careully concealed by the neo-classical econo-mists currently seeking to introduce it to policy-making. But, arguably, a

spectre is haunting liberal economics.

Human ill-being is never merely an absence o pleasure, which is one

thing that consumer society can usually promise to avoid; nor is it even

an absence o any substantive meaning, which the spirit o capitalism

can partially deliver on, i only as an epiphenomenon. Followed to its

logical conclusion, it is an absence o democracy, and consequently abasis or resistance and critique. Happiness economics starts with a

psychological interest in hedonia and the mind, strays into ethical ques-

tions oeudaimonia and society, and eventually grapples clumsily with

the Kantian dilemma o Enlightenmentwhat is all this rationality,

eciency and technology ultimately or? The meaninglessness o utili-

tarianism, and the emptiness o hedonism, are now subject to empirical

and statistical analysis. On the one hand, this is a co-option and sub-

sumption o core Enlightenment and critical thinking, to rivalbutexceedthe capacity o management and marketing discourse to inter-

nalize the critique o capitalism. To the pessimist, the act that economists

have discovered unhappiness and history may look like the nal triumph

o immanence. The optimistic reading would be that when positivists

seek to grasp and quantiy the immeasurable problem o unhappiness,

they encounter causes o that unhappiness that are ar larger than eco-

nomic or medical policy can calculate or alleviate. Is it too much to hope

that, i critique can be rendered psychological, then the reverse may alsobe true: that mental ill-being may be rendered critical?

26 Nicola Bacon et al, The State o Happiness, London 2010.

the political economy of unhappiness(davies)-nlr 71 sep-oct 2011

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