Prof Philip Booth writes for PublicServiceEurope
Indeed, if the share of government spending in national income had been maintained at the level that pertained in 1960 for the last 50 years – then national income today would be twice as high as it currently is. Growth retarding regulation abounds – planning restrictions, employment law and so on. People will have different views on whether bigger government is a good idea, but it is very clear that government policy in almost every area is not geared towards maximising economic growth. So, Cameron’s policy is based on a false premise.
It is also deeply troubling that a British government should believe that the best way to promote national well-being is to try to collect aggregate statistics on our well-being. What makes us happier is deeply personal and involves trade-offs. One person in a particular family situation might be happier in a job that provided more time with the family. A different person might want to work all hours god sends in order to save up for the time when he or she will have a family. People have different views about the value of job security versus the chance of getting a new job after having been fired. One simply cannot aggregate this data into some sort of national-utility function and then direct government policy towards maximising that utility function.
If you look at the wellbeing data – it surprisingly bears little relationship with variables such as inequality, health, crime and other variables to which we would expect it to be related. The government would do well to create a framework in which we had the maximum freedom to pursue wellbeing. As it happens, the clearest relationships found in the data are between religion and wellbeing and strong families and wellbeing. Having a job is also important. Few would argue that the state should coerce people into a religion, but we might consider the incentive structures in the welfare state that encourage worklessness and discourage family formation.
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