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Economic indicators have been very important in the last decade, where our material needs haven't been completely satisfied, and our well-being has been closely related to the fulfillment of those needs. Nevertheless, as nations become wealthier, we start to understand that what determines the well-being of citizens is less and less how big their income is, but more and more the fairness of the societies in which they live, the social relations they establish within that society, and how passionate they feel about their work.
During the last century, progress in developing countries was centered around the satisfaction of material needs (an era I will call the "There are no Free Lunches" era). After history allowed developed societies to reach a certain material growth level, bringing new levels of environmental harm and social injustice, we have entered a new Era where, without jeopardizing the material needs we need to achieve new well-being stages, through a new set of policies (which I will call "Free Lunches"), increasing citizens' consumption levels allows us to change the way we relate to each other.
Free Lunch Nº1: Social Equality
What social inequality does to our health has remained until recently, a question of personal and ideological character. Nevertheless, it ceased to be recent.
Today we know that social inequality is the reason why some of the wealthiest nations in the world are also social failures. Through comparative studies of wealth distribution across countries, we can verify that in countries, where the differences between rich and poor are smaller, statistics show that communitarian participation is higher and people trust each other more. There are also lower levels of violence - namely lower homicide rates; health tends to be better and life expectancy tends to be higher.
The majority of a nation's social problems, formerly attributed to general poverty, are due to the size of the gap between the rich and poor: oversized prison populations, teenage pregnancy, illiteracy, obesity, and even students' performance in mathematics. These casualties, perhaps surprising to many, had been demonstrated in more than 170 (between health and inequality) and about 40 (between violence and inequality) studies. This evidence was collected by epidemiologist, Richard Wilkinson and disclosed in his book The Spirit Level, leaving no doubts about the idea that the majority of developed nations are already rich enough and will only be able to increase their citizen's well-being by redistributing wealth in a more equal way - something that, for example, already happens in Scandinavian countries and Japan.
Thus, and contrary to one of the most important assumptions of classical economic theory - "more is always better" - nowadays, the opposite is beginning to become more evident: distribution is more important than growth.
Free Lunch Nº2: Social Relations
The quality of social relations is crucial for people's levels of well-being and happiness. To experience well-being, people need strong social ties resulting from authentic relationships, instead of simple interactions with strangers. The economic indicators do not reveal the quality of social relations inside a family, organization, or society, and many times creating policies based solely on economic analysis, can even threaten the quality of people's relations and, because of that, diminish their well-being.
A significant amount of literature around the topic demonstrates that people experience more positive emotions when they are together than when they are alone. We also know that, from several personal skills, the ones that better predict the levels of someone's life satisfaction are the interpersonal ones. Studies which demonstrate that there are superior levels of life satisfaction of elderly people who live in the countryside compared to those living in the city, are due to the fact that the former have more extensive social networks.
Not only does the quality of people’s relationships increase your likelihood of having a satisfying life, it reduces other problems. People with more friends present lower stress levels, and the prevalence of mental illness is higher between single people or people who live alone. Positive social relationships and support are fundamental to human welfare. People value the feeling of belonging to a group, association, or institution, and suffer when they are ostracized or set aside. Thus, social isolation seems to inversely correlate with strong levels of well-being.
Despite the importance of social relations for our well-being, there is another factor not captured by existing economic indicators. When something is not measured it does not exist, and if it does not exist it cannot be influenced through community and organizational level policies, which allow to restore the confidence and the ties between people, increasing their well-being levels.
Additionally, research demonstrates that the mere thought of money - a striking feature of the consumer society - makes people less available to help colleagues, donate money for humanitarian causes, or decide to spend time with other people - a precise set of behaviors that highly correlate with human well-being and happiness.
Once again, other central premise of classical economics - "every citizen should promote their self-interest" - is contradicted by reality: to concern ourselves with others is the best way to promote our own well-being.
Free Lunch Nº3: Work with Meaning
Many people believe paid work is an unpleasant activity that should be tolerated, in order to earn money. However, research shows that people derive satisfaction from their work, and that in many cases prefer the things they do at work than the things they do when they are not working. Although studies point that working is not as pleasant as having sex or socializing after work, work paid activities can provide rewarding experiences, structure people's day-to-day activities, become a way to earn respect, and become a source of engagement, challenge, and meaning.
Our feelings about our job interfere with our feelings about other areas of our life: there is a positive correlation between work satisfaction and life satisfaction, particularly in men. The quality of the relationship with our spouse is also affected by our work satisfaction. Important determinants of the quality of our time when we are not at work, such as our levels of vitality and energy, are also conditioned by our subjective evaluation of the interest and gratification provided by our work activities.
Recent reviews of the wide literature about satisfaction at work allow us to verify that the factors that determine the existence of "meaningful work" are mainly related with the nature and the way the work is structured, income being only a "hygienic" factor. In other words: when income is perceived as fair it does not create satisfaction but when it is not, it prevents the emergence of job satisfaction. Nevertheless, it cannot be considered a "motivational" factor: if we increase the salary of someone who considers himself to be already equitably well paid, we will not be able to improve his motivation and the satisfaction it gets from its work. Curiously, studies suggest, when we pay someone to perform a task for which he feels intrinsically motivated, we can even diminish the person's motivation for the task, and this way, to decrease the satisfaction levels it obtains from the activity. These results were observed even with children: when we assigned rewards to the performance of a particular activity, previously considered a game (e.g., riding a scooter, play at the top) we withdrew its entertainment component and its recreational meaning, and made it perceived as less satisfactory.
Thus, it seems that the quantity of money we receive from our job is important until a certain point, but it should never be more than just a means to an end. Using honorable professor of business ethics, Robert Freeman's expression: money should be to organizations, what red blood cells are to the human body - essential to live but never the essence of life. From the moment we make money the central concern of our work, we run the risk of destroying the intrinsic satisfaction we can get from it.
This way, and for the third time, another central premise of classical economics - "economic agents should always seek to maximize profit" - can be bad advice, due to being contrary to the interests of human beings. In fact, evidence shows that money is important at work, but from a certain point it can become toxic and even destroy people's intrinsic motivations, preventing them from finding their "intentionality" - an authentic and personal meaning for their lives.
Free Lunches and the Heisenberg Principle
A century of industrialization made possible to achieve economic growth levels, never achieved in most developed countries and it was without a doubt decisive to the well-being increase of their corresponding populations. Nevertheless, we achieved a degree of development where it became clear that there are other things more important than economic indicators - well-being indicators – that can allow us to understand when and how economic growth can influence the well-being levels of populations.
The consumption of certain goods allows the increase of people's well-being: better schools, more green spaces. The consumption of other kinds of goods does not. They were called by OCDE regrettables: alcohol, cigarettes, gambling, and police protection. Nevertheless, both receive the same weight in terms of their contribution to a country's GDP. This way, to spend a million euros in a high school or on thousands of vodka bottles, translates itself into an equal impact on economic terms (e.g., GDP contribution) but, as we all recognize, a diametrically opposite impact in terms of human welfare.
Another aspect that reinforces the economic indicators limitations in terms of expressing people's well-being is related with domestic work and the well-being it can bring to people. Domestic activities such as cooking, DIY, taking care of children, are activities that originate well-being by itself. We know today that people value a product more when it is made by them rather than brought to them - the IKEA effect (e.g., drawing or setting up a mobile or buying it at a store). We also know, and if we think about it for a moment I think no one really doubts - that the quality of life of a couple and their happiness, and of their children, would substantially increased if they could take care of their children, instead of hiring someone to do it.
Thus, and paradoxically, if buying a phone and putting newborn babies in daycare is better to a country's economy; to build furniture and spend time with newborn babies at home, is better for the people's well-being. Thus, a paradox seems to exist, between the economic interests (measured by current economic indicators) and the interests of people, or at least, of the majority of people.
According with the Heisenberg psychological principle, what a society measures influences what a society looks for. If a society limits itself to measuring only economic indicators, people in that society will limit themselves to only pursue economic objectives at the expense of other values. If a nation, besides those economic indicators, measures systematically and regularly, indicators of happiness and well-being, its population will consequently pay more attention to human well-being and the causes that determine it, which ultimately, and if combined with coherent policies, will allow to increase the well-being levels of that same population.
All over the world, the wisdom politicians always recognize is the complexity involved in the definition of a country's metrics of development. However, maybe none of them has made it in such an eloquent way as Robert Kennedy, in a speech made in 1968 at the University of Kansas. Then he pointed out the folly that implies measuring the citizens well-being, through the Gross National Product of a Country: ..the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.
