Happiness

Richard Layard opens with a paradox. Over the past fifty years, average incomes in the United States, Britain, and Japan have more than doubled, yet scientific measurements consistently show that average happiness has not increased. Layard grounds his approach in the philosophy of Jeremy Bentham, an 18th-century Enlightenment thinker who proposed that the best society is the one where citizens are happiest, with each person's happiness counting equally. A new science of happiness, drawing on psychology, neuroscience, economics, sociology, and philosophy, now makes it possible to apply this principle using evidence rather than speculation.

Layard defines happiness as "feeling good" and wanting that feeling to continue (12). He establishes that happiness is measurable and objective. The psychologist Richard Davidson at the University of Wisconsin demonstrated through EEG measurements, which record electrical activity across the scalp, that positive feelings correspond to greater activity in the left frontal area of the brain, while negative feelings correspond to activity on the right. These patterns align with self-reported moods, smiling frequency, and friends' assessments, and they appear even in newborns. Layard argues that happiness and unhappiness occupy a single dimension, with positive feelings dampening negative ones and vice versa.

Turning to historical trends, Layard notes that the proportion of Americans reporting they are "very happy" has not risen since the late 1940s despite real income more than doubling. Britain and Japan show similar stagnation. Within any society, richer people are happier than poorer people, yet both groups have grown richer without growing happier. Comparing countries, above roughly $20,000 per head, additional national income brings no extra happiness, though for poorer countries more wealth does correlate with greater well-being. Beyond stagnant happiness, Layard documents rising rates of clinical depression, alcohol abuse, and crime since the Second World War. By age 35, roughly 15% of Americans have experienced a major depression, compared with only about 2% of those who were 35 in the 1960s.

Two psychological mechanisms explain why rising income fails to increase happiness: social comparison and habituation. A study found that a majority of Harvard students preferred earning $50,000 while others earned $25,000 over earning $100,000 while others earned $250,000, demonstrating that people care about relative rather than absolute income. Over decades, Americans' sense of what income they need has risen in lockstep with actual income, neutralizing each gain. Habituation, which Layard calls the "hedonic treadmill," means that excitement over new possessions fades as one adapts, and the new standard becomes a necessity. People adapt most easily to material goods but much less to friendships, relationships, and job quality, yet they underestimate how quickly they will habituate, leading them to overinvest in earning at the expense of relationships and leisure.

Layard identifies the "Big Seven" factors that determine happiness, ranked by importance: family relationships, financial situation, work, community and friends, health, personal freedom, and personal values. Drawing on research by John Helliwell of the University of British Columbia covering 90,000 people across 46 countries, he quantifies these effects: divorce reduces happiness by 5 points on a 100-point scale, while losing a third of one's income causes only a 2-point drop. Unemployment reduces happiness by 6 points and destroys self-respect; people never habituate to it. Trust also matters: countries where more citizens trust others are measurably happier. Quality of government proves important as well; a Swiss study found that people in cantons, or regional districts, with more rights to direct referendums are much happier. Across 50 countries, six factors, including divorce rate, unemployment, trust, organizational membership, quality of government, and religious belief, explain 80% of the variation in happiness.

Layard argues that science and technology drove both positive changes, such as better health and higher income, and negative ones, such as family breakdown and weakened communities, that roughly canceled each other out. He illustrates television's effects with the example of Bhutan, where the introduction of television in 1999 was followed by sharp increases in family breakdown, crime, and drug use. More broadly, television reduced community participation, increased childhood aggression, and raised comparison standards by depicting wealth far exceeding everyday experience. Declining child mortality and labor-saving technology freed women to enter the workforce, altering family structures. The birth control pill and legalized abortion separated sex from pregnancy, introducing new strains on marriage. The decline of religious belief removed old moral frameworks, leaving a vacuum filled by individualism.

Against the view that life is purely competitive, Layard demonstrates that humans are capable of sustained cooperation. MRI scans show that cooperating with others activates the brain's reward areas. He defends what he calls the Greatest Happiness principle: The right action is the one that produces the most overall happiness, with everyone's happiness counted equally. Happiness, he argues, is the only self-evidently good objective. Health and freedom matter because they contribute to happiness, but happiness itself requires no further justification. He contends it is more important to reduce suffering than to generate extreme happiness, since an impartial spectator would give extra weight to the most miserable.

Layard critiques mainstream economics for relying on gross national product (GNP), a measure of a nation's total economic output, as a proxy for well-being. He identifies five features of human nature that economics neglects: extra income matters more to the poor; others affect us beyond market exchange; norms shift in response to influences like advertising; losses hurt roughly twice as much as equivalent gains help; and people fail to predict habituation and poorly assess risk. The race for relative status is zero-sum, creating a form of social pollution, and Layard argues that taxes on earned income serve a corrective function by discouraging excessive work, just as emissions taxes discourage pollution. He criticizes performance-related pay for increasing workplace stress and crowding out intrinsic motivation, and recommends banning commercial advertising to children, citing Sweden's prohibition on ads directed at those under 12.

On security, Layard rejects the claim that globalization forces societies to accept less protection. He advocates welfare-to-work approaches where benefits require active job-seeking but the state guarantees opportunities. For families, he proposes compulsory parenting education, family-friendly work practices, and affordable child care. He identifies mental illness as probably the single largest cause of misery in Western societies: Mental illness and addiction together account for nearly half of all disability, yet mental health treatment receives only 7% of U.S. health spending and 13% of British spending. Either drugs or cognitive-behavioral therapy lifts about 60% of people with depression within four months, yet fewer than half of people with major depression receive any treatment.

Layard surveys mental disciplines that can train the mind. An experiment by psychologist Jon Kabat-Zinn showed that workers who completed an eight-week meditation course were significantly happier four months later. Buddhist practice teaches detached observation of negative emotions such as anger and craving. Cognitive therapy, developed by psychiatrist Aaron Beck, treats depression by systematically challenging negative automatic thoughts. The positive psychology movement, led by Martin Seligman, urges people to develop strengths and cultivate meaning. On psychiatric drugs, Layard traces developments from the breakthroughs of the 1950s, including chlorpromazine for schizophrenia and the first antidepressants, through modern medications like Prozac (fluoxetine), developed by the pharmaceutical company Eli Lilly to increase the brain's supply of serotonin, a neurotransmitter linked to mood regulation, with fewer side effects. He argues that drug treatment has done more to reduce extreme misery than almost any other development in the past half century.

Layard concludes with specific policy proposals: Monitor national happiness alongside GNP; rethink taxes and performance-related pay; spend more on overseas aid and mental health treatment; introduce family-friendly work practices; subsidize community activities; eliminate high unemployment through welfare-to-work; ban advertising to children; and institute moral education throughout schooling, teaching empathy, emotional management, and service. A society cannot flourish without shared purpose, and the pursuit of self-realization alone is too isolating. Layard proposes compassion toward oneself and others, guided by the Greatest Happiness principle, as the foundation of a better culture.