Prosperous Economies Do Not Ensure Happy Citizens

           While money may serve as the leading incentive for people to succeed, individuals also strive to work towards the betterment of society. With the U.S. economy in shambles, politicians and citizens alike believe that money is the solution to our nation’s problems.

            In a previous post, I discussed the idea that after a certain given salary ($75,000), the happiness of an individual does not increase. Adair Turner, chairman of the Financial Services Authority, takes this concept a step further and claims that economic prosperity does not lead to an increase in citizens’ happiness either. According to an economic theory concocted by Roger Bootle, there are two types of activities that careers fall under that individuals engage in: creative and distributive activities. A creative activity is one where your job benefits another individual, i.e. a doctor. A distributive activity is one in which your purpose is to create gains for your company/client at the expense of another. Turner goes on to say that the more prosperous a nation grows, the more people engage in distributive activities which are “activities that cannot increase human happiness.”

            While it is important for a nation to flourish, it is important to keep in mind that economic growth is not linked to an improvement amongst citizens when the activities are purely distributive. On a microeconomic level, Turner mentions that distributive careers in the legal profession as well as financial services industry are highly distributive, and while they may be high-paying jobs, they are “socially useless” in terms of their contributions to society.

            While I do not fully agree with these points made in Turner’s lecture at the London School of Economics, I do agree with the idea that economic growth does not always make the individuals that comprise an economy happier. I also find it interesting that Turner believes the financial services industry to be “socially useless”, considering he serves as Chairman of Britian’s leading financial regulatory body.