The economics of the good life

We all want to live a good life and, as socialists, we want everyone else to be able to live one too. To build that good life requires understanding what it is. To know that a good life is made up of many different parts: being healthy, happy, safe, living in a decent home, having a good job, enough money, friends, spare time, and a clean environment.

‘Good life economics’ deliberately and consciously tries to create a good life for everyone, by first measuring how people are doing in each part of their lives and then figuring out how to improve each one.

Keir Starmer understands this, which is why he chose economist Angus Deaton’s definition of wellbeing at the Fabian Society’s New Year conference this year: “All  the  things that are good for a person, that make for a good life.” Bettering all the things is necessary to create a good life.

And the simple truth is this: For most of the elements that make up a good life, making sure people have good jobs and enough money is necessary, but not sufficient.

Let’s take happiness as an example. Around one in 10 of us were depressed before the pandemic. Starmer, rightly, has pledged to address this, promising more treatment and 8,500 more mental health professionals. With suicide being the biggest killer for men under 45, these extra mental health workers are urgently needed. They will stop thousands of stories of unspeakable grief from ever being told.

But they will not be enough to make everyone happy. Because this also requires cold, hard cash. If you are stressed because you don’t know how you will put food on the table, heat your home, or if you will even have a home, that will damage your mental health. People in the bottom fifth are twice as likely to have a mental health problem as those in the top fifth precisely because they are struggling to get by.

In Blackpool, one of the most deprived areas in the country with (not coincidentally) one of the nation’s highest rates of antidepressant prescriptions, the doctors have a  diagnosis for those who do not have stable jobs, meaningful relationships, or decent homes and are, consequently, deeply unhappy. ‘Shit life syndrome’ is the name they give it.

These doctors can prescribe antidepressants and theoretically give people therapy – if it were available – but that won’t fix the underlying problems of Blackpool’s residents being unable to earn enough to live a good life. They can only treat the symptoms, but they cannot cure the cause.

Most parts of the good life require putting money  in people’s pockets and other measures to better them.  For  happiness, mental health treatment and enough money to get by are needed. For physical safety, improving job opportunities and having more police officers is required.

Economic growth is, unfortunately, no longer sufficient to ensure that people will have enough money to get by. It used to be. Before the 1980s, economic growth was shared equally across people and places. Economic growth rates served as a crude indicator of how people’s lives were improving.

But then, automation and trade destroyed mid-pay manufacturing jobs in the now-former industrial heartlands. The economy became divided between high-pay service sector jobs in major cities like London, and low-pay service sector jobs across the nation. Between 1980 and the great recession, top wages grew by around 70 per cent while bottom wages grew by only 15 per cent. London sucked in graduates looking for high-pay jobs, growing by 30 per cent in the past 30 years.

The people and places locked out of economic growth saw the good life slip away from them. Non-graduate men who could no longer find work often turned to drugs, alcohol, and suicide in greater numbers – the number dying from these ‘deaths of despair’ has doubled over the past 30 years.

Those without good jobs are even finding it harder to find love – their marriage rates declined along with their job prospects. J.Lo was, unfortunately, wrong in believing that: “Love don’t cost a thing.” It very much does.

Then there are parts of the good life where raising personal incomes has little effect, where government does most of the heavy lifting. Being well-educated is more about decent schools – and particularly pre-schools – than the cash in your pocket. Having a decent home needs the government to build more houses where demand is rising. Living in a clean environment needs the government to invest in renewable sources and insulation so we can transition to net zero. And so on.

Creating the good life for all of Britain’s citizens means improving every part. That is the essence of good life economics. In a post-industrial economy, the government will have to step in to make sure every person, at the very least, has enough money.

But that won’t be enough. There is no single policy, silver bullet, or magic rabbit that will ensure that everyone can live a good life. And why should there be? A good life is not basic, simple, or predictable. It is beautiful, complicated, surprising, and messy. I personally wouldn’t have it any other way.

Image credit: Emma Simpson via Unsplash