Recession Porn - Let's Change the Channel

Economic News got you Down?

Let’s Change the Channel


I’ve heard it described as ‘recession porn’. In the media, you find an economic forecast or story that is awful and you run with it. It sells papers or gets people watching (kinda like the car wreck mentality).

Lately, however, we may have turned a corner. The Globe & Mail recently used the decline in the usage of the terms ‘depression’ and ‘economy’ in a Google search as a sign things may have bottomed out. A couple of weeks ago I was at an economic development conference where a keynote speaker suggested we’re not REALLY in a recession – if you compare us with 2002, a year more typical than the crazy and unsustainable boom years experienced more recently. Maybe these people are grasping for straws or maybe it’s the natural optimism that comes with spring.

One thing that the current economic downturn provides us with is a chance to

look differently at the way we measure the world, our communities and maybe ourselves.

In Canada we’re guaranteed ‘peace, order and good government’. Our American cousins get the much sexier ‘life, liberty and pursuit of happiness’ in their Constitution.

But how often do we actually stop and consider our own happiness. Lately, there’s been some great research that’s suggested our continued fixation on Gross Domestic Product (GDP) as a sign of how well we’re doing is about as wrong as having an all-lard diet. In other words, we’re watching the wrong channel.

In the early 20th century when GDP went up, society became better. People lived longer healthier lives, enjoyed more school and were generally happier. (Believe it or not, early economists were trying to make society happier.)

However, that relationship started to change in the west 50 years or so ago when people didn’t get any happier while incomes continued to rise. In fact, rates of suicide, depression, anxiety, alcoholism, and mental illness all started to climb. It didn’t take long for people to start criticizing GDP as a bad measure of progress – GDP goes up when people smoke more, when insurance claims for vandalism are filed, or when more is spent on prescription drugs.


Economists and others searched for meaningful ways to answer ‘where are we?’ and ‘where do we want to go?’. ‘Can’t measure, can’t manage’ is a common adage in management circles.

There was some promise with Genuine Progress Indicators (GPI), which also tried to measure the well-being of people in a country. It tries to separate between good and not-so-good growth and factor in things like costs of resource depletion (deforestation), crime, family breakdown, etc.

In 1972, the King of Bhutan proposed Gross National Happiness (GNH), trying to ensure Bhutan, a tiny mountain kingdom above India, would preserve its unique cultural and spiritual features when opened to the world. GNH tried to balance four pillars: promotion of equitable and sustainable socio-economic development, preservation and promotion of cultural values, conservation of the natural environment and establishment of good governance. Bhutan has struggled with measuring this but it is, to its credit, the only country among the world’s 20 happiest countries, as documented in a well-regarded study by the UK’s Adrian White.

The Happy Planet Index (not the smoothie company that Vancouver Mayor Gregor Robertson co-founded) takes things a step further. It looks at well-being and wealth but then subtracts ecological footprint and adverse impact on one’s neighbour. Therefore, a gas guzzling country that fires missiles into the neighbourhood would score low. Canada and the US do not crack the top 100 in this.

The New Economics Foundation, a group based in the UK, are certainly shaking things up with the Happy Planet Index. They claim to do economics as if people and the planet mattered. They’ve caught the ear of many governments, including the Conservatives in Britain.

Sure, it’s interesting to play with numbers when they’re all rolled up at the national level, but do these measures of well-being help us in Nelson or the Kootenays?

My work at the community level on business vitality and community vitality has been trying to generate meaningful information from perceptions (do young people want to live here?) because there is no data.

That’s why I propose Nelson becomes a leader in measuring personal and community well-being as a way of REALLY charting how we’re doing and deciding where to go next. Nelson is quickly asserting itself as a leading community for food security, pesticides, and producing top-notch cultural products (community theatre, music, KCR’s radio programming). Why not be a front-runner on well-being (happiness) as well?

We could start by asking ourselves these key questions:

• How would you describe your overall quality of life/happiness?
  
• As a citizen in this community, how satisfied are you with the overall quality of life in it?
  
• In the past 5 years, do you feel it’s improved/stayed the same/worsened?
  
• What do you think will be the answer in 3 years?

Perhaps it’s time we changed the channel.

NOTE: If you want to see how your well-being stacks up against our European cousins’ check out www.nationalaccountsofwellbeing.org. The cool graph at the end is well worth the 15 minute investment.



Mike Stolte is Executive Director of the Centre for Innovative & Entrepreneurial Leadership (CIEL – www.theCIEL.com). He also writes as the Happy Economist (www.happyeconomist.com).

This article was originally published in the Nelson Daily News.

Maximizing Happiness

“You will never be happy if you continue to search for what happiness consists of”

Albert Camus, writer & philosopher

Sorry Albert!

How wrong Monsieur Camus was! Research has recently begun to pinpoint what makes people happy and which people are happiest. Being the type of person who needs to know, I look with anticipation to every new happiness study so I can get on with the business of fine-tuning my life to maximize my happiness and discover interesting material that others find interesting or useful.

In this column, I’ll summarize some general research on what makes people happy and speak to how some of specific research on some of the big questions has helped me make some key decisions in life (in future issues I will provide a more in-depth examination at some of the more interesting research).

First, and very importantly, a little defining is in order. Happiness, in most of what I will write about, is generally agreed to mean feeling good, enjoying life and feeling it’s wonderful. Unhappiness is feeling bad or wishing things were different. Researchers often ask questions using happiness, satisfaction and a ‘1 (worst) though 10 (best)’ life scale to ensure they are talking about the same things to different people. And yes, researchers have recently managed to validate these subjective, self-assessed scores by using MRIs, brain scans measuring brain activity.

Who the Happy are….

According to a huge European study collected over 12 countries involving more than 100,000 people, the happiest people are highly educated, female, have a high income, are young or old (definitely not middle-aged), retired, looking after the home and are self-employed. Obviously, very few of us can fit into all these categories. In fact, I fit into very few of the categories (I feel old – does that count?) and still manage to be somewhat happy (as an economist, I find it hard to say something without qualifying it).

The seven key factors affecting happiness in a positive way are good mental health, satisfying work, secure work, a secure and loving private life, a safe community, freedom and moral values.

The most unhappy people are unemployed, divorced and are experiencing extreme ill health.

Being wanted and feeling wanted, both at home and in society at large, are both significant and universal across cultures. It’s also hard to have a high quality of life suffering from a chronic disease.

Here is what the research concludes on the some of the big questions affecting happiness and how I’ve used the information to change my life.

Wealth and happiness.

Wealthier people are marginally happier. For the most part though, research reveals that there’s not much of a difference once you’ve reached a minimum family income. A Time Magazine poll of Americans found that 81% of those making $35-49,000 year were happy all the time compared with 88% of those making more than $100,000 (interestingly, other research has demonstrated that 25% of Americans are mildly depressed at any point in time). More startlingly, in for both high and low incomes, the same proportion of people reported being happy rarely or not often. Thirty-seven percent of the people on Forbes list of wealthiest Americans are less happy than the average American.

At a national level we observe the same effect. The U.S., despite its massive wealth, scored 15th among nations in happiness behind poorer countries like Mexico, Colombia, and El Salvador. Georgia, Ukraine, Russia and Zimbabwe, all dealing with issues of poverty and limited political freedoms, scored lowest.

With wealth, there are two things going on. The first is habituation, or getting used to something quickly. Humans adapt quickly and soon after getting our new leather sofa – that we worked weekends and long nights of overtime to save up for – it too, is just another piece in a living room that doesn’t get lived in. The second is relativism. It’s essentially keeping up with the Joneses, our families and our peer group. Jim and Lisa get a second vehicle and take a ski vacation. The pressure builds for us to keep up. They are no smarter or better than we are we think. Pretty soon we’re showing off our big new plasma screen and the stakes of this no-win game have been raised.

Lesson #1: First off, if I have a choice between working some extra time for money or spending it with my family, I now pick the latter. Sure, it would be nice to have a new deck, to have the dull house painted or to have a new toy for the kids but the extra money will come at the expense of my weekends and my nights, already busy with family obligations. Research, and common sense, tells me the toy will soon be forgotten.

Lesson #2: Don’t get sucked into competing with the Joneses. Easier said than done. However, choosing friends that have similar values to you when it comes to money can be helpful and help relieve the financial stress we all experience. Ten years ago, I moved to a smaller community that seemed to eschew a culture of thrift. People drive older cars, attend garage sales and seem more content with second hand toys than in the big city. I make considerably less but I feel much less stressed financially .

Community and happiness. “Community matters: roots are as important to people as for trees,” says happiness researcher John Heliwell. Community is a significant factor in happiness. Combined with family, and friends, this is the veritable happiness trifecta. Heliwell’s studies look at social capital, trust, links and cohesion as big factors in the community puzzle. In communities with high rates of crime, there is lower trust. People who live on ground floors have markedly higher rates of anxiety and mental illness. A recent Australian study showed that nine of the 10 happiest federal electoral ridings were small, rural and rather poor while their urban cousins were often surly and unhappy.

Lesson 3: We are all social animals craving meaningful interaction. For me, seeking out a real community – one that was vital, active and that welcomed newcomers – was a good bet at tipping the happiness scales in a positive direction. In addition, living in a smaller community also assists me with reducing clutter, the scourge of the 21st century, and a true stressor.

Health and happiness. Happier people are healthier, live longer, have better immune systems. As mentioned earlier, having chronically poor health is one of the best ways to sabotage your happiness.

Lesson #4: While nutrition and exercise are critical (and get the lion’s share of attention on health), research also suggests that two other key components of health affecting happiness are adequate sleep and managing stress. One study concluded two of three American women were chronically sleep-deprived (getting less than seven hours a night). This perpetual fatigue had a greater effect than job satisfaction or income on happiness. I go to bed early now! Stress, often caused by worrying about the future, is a growing health and happiness affecting issue. Some quick remedies I’ve adopted are paring down my to-do list to half or less, setting goals that are more realistic (not too easy but not too challenging), spending time with people I genuinely like and can be myself with, and keeping a ‘gratitude’ journal (see last issue). I’ve tried but not yet mastered meditation. Trail running and cross country skiing with my MP3 player and some relaxing tunes create short ‘reality breaks’ that have meditative qualities for me. Research has shown that meditating Buddhist monks have enormous activity in the portion of the brain associated with happiness.

Work and happiness. We all need to feel wanted and needed. Most of us spend a good chunk of our lives working and thinking of work.

Lesson #5: Heliwell’s research concludes that next to job security, it’s most important to instill trust in the workplace. As an employer, I have focused on creating an environemeent that focuses on these. In descending order, Heliwell also found that having a variety of tasks, employing skills, having a job free of conflicting demands and having enough time also affected happiness, and ultimately workplace productivity. If you’re a boss or business owner, take note. If you’re an employee, show this to the boss!

TV and happiness. People who watch a lot of TV aren’t as happy as those who watch little or not at all.

Lesson #6: First of all let me say, that the studying happiness – long the exclusive domain of spiritual leaders and psychologists – makes me happy in itself. I know myself well enough (remember those Greek philosophers who advised one to know thyself before seeking happiness).

Originally Published in Porch Magazine by Mike Stolte, www.HappyEconomist.com

How Happiness has made me Happy

“Those only are happy who have some object other than their own happiness; on the happiness of others, on the improvement of mankind, even on some art or pursuit, followed not as a means, but as an ideal end. Aiming thus at something else, they find happiness by the way.”

John Stuart Mill, Philosopher, Father of Capitalism & Modern Economics

I’m happier since beginning to study happiness.

First off, I’m a learner. I need to be learning in order to be happy. I once came across a lovely simple recipe for happiness that stated it simply – one needs to truly live, to love and be loved, to learn and to leave a legacy for true happiness. Simple, almost too trite. For me, I found the learning part of this advice to be a missing ingredient to understanding my happiness. If I I’m not constantly learning, I realize, I get bored. Boredom and happiness are not easy companions. Over the last few years, the interest in happiness and research related to it has exploded. Happiness is no longer the exclusive domain of spiritual leaders. Until recently, psychology offered little to the study of happiness focusing almost exclusively on unhappiness and depression, the evil alter egos of happiness. Thankfully, happiness research is now becoming an integral part of neurobiology, sociology and now economics. Each day, there’s more to read, still more data to analyze, and more insights to make. For me, nothing makes me happier.

Secondly, the data makes me happy. Using it, I have learned that I shouldn’t expect to be happy all the time, despite society telling me I deserve the latest and greatest and that I’m but a quick pill pop away from solving my gloominess or other ‘dysfunction’. In a strange Darwinian way, scientists have recently found that temporary depression and unhappiness are necessary barometers of health, and ultimately for human survival. (Deep, long lasting depression` is unhealthy though). People aren’t getting happier in the rich West. As noted in the last issue, suicide, depression, anxiety and a whole host of problems are on the rise despite our newfound wealth. Research suggests that we get used to what we have very quickly. This habituation effect (I like to call it the ratcheting effect) helps explain why lottery winners on one extreme and recent parapalegics on the other settle back into old happiness levels. They simply adapt to their new circumstance.

Research also suggests our peer group and the people we associate with on a daily basis plays a huge role in our happiness. If everyone around you does well financially except you you can expect your happiness will be affected. Despite what we’d like to think, we’re a hierarchical species. Taking this research to heart, it would suggest disassociating from Bill and Melinda Gates and their social circle.

Thirdly, I have begun to make some important life choices to maximize my happiness. Call me a crazy economist, but I believe in data. Tempered with common sense, a knowledge of oneself (data only presents averages and generalizations

Fourthly, I become animated in talking about something I love and that others are struggling with. Like all teachers, I teach so that I may learn.

Originally published in Porch Magazine

Mike Stolte is the Happy Economist: happyeconomist@gmail.com