The Limits of Economic Wealth
Adam Smith’s quote from arguably his most influential work, “The Wealth of Nations,” states that higher wages are essential if society wishes its citizens to be less poor and miserable. With wealth and purchasing power comes the opportunity for a better life – through the acquisition of goods and services that enhance the quality of one’s living. Higher wages too, according to Smith, lowers the price of goods for society across all levels of the socioeconomic strata. We know, however, that the distribution of wealth is not always equal; economists measure the inequality of wealth distribution using metrics such the Gini coefficient. In many developed countries, a relatively small proportion of society controls a disproportionately large amount of the country’s wealth. And wealth – at least in monetary terms, isn’t always the best indicator of a country’s success, nor is it the defining characteristic of its citizens’ well-being. In response to this, over the past two decades, newer, more holistic measures of a country’s wealth are being used to better capture the happiness of nations. These new measures echo calls for economists, policymakers, and world leaders to consider a truer picture of what ‘wealth’ truly means. Former US senator Robert F. (Bobby) Kennedy, as early as 1968 argues that Gross Domestic Product (GDP) – a regularly used measure of a country’s wealth, ironically, “measures everything except that which makes life worthwhile.” Kennedy highlights that things such as the quality of children’s education, the joy of their play, the beauty of (our) poetry, and strength of marriages are excluded from such traditional measures of country’s wealth.
Expanding Wealth to Happiness and Prosperity
Two new measures of country-level wealth are the World Happiness Index and the Prosperity Index. These two measures include more traditional indicators of well-being; the World Happiness Report captures GDP per capita, the Prosperity Index measures economic quality, for instance. Consistent with the truths that Smith highlighted more than two centuries ago, economic wealth indeed is a contributor to happiness – happy countries are those that are economically wealthy, or at the very least, economically stable . Beyond these measures, however, the World Happiness and Prosperity Indices too, capture more psychologically-based contributors of happiness, such as freedom to make life choices, generosity, perceptions of corruption, social capital (strength of relationships) and the quality of the natural environment. If we relied on solely or exclusively economic measures alone, say, the GDP per capita, then we get countries such as Qatar, Macau, Brunei and the United Arab Emirates rank within the top ten. And yet, the countries that sit within the top ten list of the World Happiness and Prosperity Indices could not be more different. The happiest countries in the world are clearly, quite Nordic in culture, and located within the Scandinavian region.
Happiness Ideals from Nordic Countries
Countries such as Norway, Finland, Denmark and Sweden make the top 10 in both of these indices, their scores on both happiness and prosperity a result of economic stability and growth, alongside its citizens reporting perceptions of safety, access to quality health infrastructure and longevity, lower levels of perceived corruption in governance, and tellingly, high-quality social connections and relationships. Common across these countries are the perceptions of trustworthiness and quality social ties between its citizens, along with the acceptance of diversity. Indeed, engrained into the ‘happiness’ DNA in these countries are several cultural ideals, social norms and even pastimes that grant a boon of well-being to its citizens. The Danes, for instance, subscribe to an understood (but unspoken) rule called Janteloven – the rule of Jante (pronounced yawn-tay). The rule discourages bragging or drawing excessive attention to one’s achievements or accomplishments; it looks down on any acts that rouse jealousy and envy from others. It seems strict – but research stating that countries with high power distance – those that accept and emphasize status differences – have less happy citizens . The Swedes, likewise, favour a principle of living called lagom, which values balance and moderation in one’s life. Living by lagom principles also means shunning material possessions and favouring relationships – pretty good ideas given the numerous studies showing how materialism leads to lowered levels of well-being . And from Norway, we have a suggestion to quite simply, spend more time in nature. Termed friluftsliv, which means ‘free air living,’ one likely reason for the Norwegians’ happiness is their opportunity and lifestyle choice of spending time in their beautiful backyard. The experience of nature and feelings of connectedness with one’s surroundings has been shown to be positively associated with psychological well-being .
We might not always have the opportunity to live or experience the culture of the world’s happiest and most prosperous countries – but we can certainly take lessons from them. Numerous books featuring practices and mindset shifts from Nordic countries such as ‘Live Lagom’ (Anna Brones) and ‘The Key of Happiness’ (Meik Wiking) are a good place to start exploring ways in which one can incorporate some of these happiness principles into our lives. And that happiness, importantly, is not merely temporary or short-term boosts. If anything, these Nordic practices can positively impact other aspects of one’s life – our relationships with others, our view of money, how we spend our leisurely hours, how much we give of ourselves to others – and perhaps most importantly, challenge our preexisting conceptions on what it means to be truly happy.
Note: This article contains excerpts from the forthcoming, “Emotions: A Brief Introduction,” to be published sometime early 2020.