Contrary to a previous post here, it seems a recent report shows happiness increasing in countries with rising GDP. Have a look at Happiness Trends in 24 Countries, 1946-2006

So now we're happier?

The reliability of these data, given the sample size and number of countries is not strong. Perhaps the trends can be explained generationally. Older generations may have rued the loss of social structures after the War and seen the increased wealth as insufficient compensation for this loss. Perhaps younger generations growing up in the 1970s and 1980s are better adjusted to modern social structures and are more content with their lifestyles, enabling them to enjoy the benefits of greater wealth?

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This statement caught my eye today:

ExxonMobil’s primary role—and most important benefit to society—is to safely provide reliable and affordable supplies of energy to people around the world. Doing this well is essential to improving standards of living, and we are committed to doing so in a financially, environmentally, and socially responsible manner. [p3]

Economic expansion is a desire for billions of people around the world, and providing the energy necessary for growth is imperative. [p13]

Source: Exxon-Mobil Corporate Citizenship Report 2007

The foundation of this statement is the assumption that increasing living standards is fundamentally and unarguably desirable.  My question is whether there is a point where diminishing marginal returns to increasing living standards will set in.  If so, the basis for their core role of providing affordable energy and thus increasing living standards is undermined.  Indeed, whether providing affordable energy is even increasing living standards is equally questionable given the damage from most energy production.

Define Living Standards

To clear things up, we need to know what living standards actually means and in particular, what Exxon-Mobil mean when they use it in such a statement.

The simplest measure of living standards is GDP per person.  A more complex and useful measure uses something like the Human Development Index which includes wealth but also includes longevity and education.  Further measures can include political freedom, wider health measures and even happiness measures.  Clearly these become less objective as the elements are less well defined and/or harder to measure.  

So the counter to my diminishing returns to living standards argument is that if living standards are defined with a wider measure and effectively analogous with happiness, we cannot possibly argue that more happiness can make us worse off.  However, it is not difficult to argue that more wealth can make us worse off (in terms of happiness) - it is not the countries with the highest GDP per person that top the UN HDI. 

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An idea that has been emerging to me over the last month or so is that of a zero-growth society.  This launches the global paradigm shifts series - I have a few more up my sleeve!

The Concept

We have assumed that economic growth is an essential component to a successful society and increasing living standards.  But in a society where people are more and more focused on seeking happiness over simply wealth, surely we are reaching a stage where we can begin to accept stable living standards that don't increase every year but are simply enough and so stay the same year on year.  I'm not pretending to specify a full picture and the complications are vast but I find the concept somewhat compelling.

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