Do bigger governments lead to happier people?

An interview by Dylan Matthews
The Washington Post, December 23, 2013

Benjamin Radcliff is a professor of political science at the University of Notre Dame. His current research focuses on how public policy affects human happiness.

Dylan Matthews: You argue that social democratic or left-leaning policies are more conducive to happiness. What sorts of things are you talking about? Government spending? Regulations? Both?

Benjamin Radcliff: I have organized my research around two dimensions of policy. The first is the size of government, i.e. of what it is government does, from the tax burden to the generosity of the welfare state to the total impact of the government in terms of its overall consumption on GDP. The second involve institutions that protect people in labor markets, which means labor unions and economic regulations (the minimum wage, mandated vacation time, etc.), which provide a degree of sovereignty and power for workers in their employment relationships. Two sides of the coin: the general scope of what government does to make life more secure for people and the stuff that works specifically in terms of peoples’ work conditions.

Both types of policies contribute to what social theorists call “decommodification,” meaning limiting the degree to which in a capitalist economy people have to act as commodities in order to survive. You have to sell your labor power on the market. Decommodification measures how much people can opt out of the labor market, whatever the reason, and provides a way of judging to what extent have we made them free of market commodification.

More decommodification makes people happier, and it does so for rich and poor people, men and women, and controlling for just about any other thing. Similar empirical results obtain when considering total social spending on education, health care, total government consumption, the tax burden, a well-known OECD measure of employee protection legislation, even indices on the size of government and labor market regulation from the conservative Fraser Institute. The smaller the government, the less happy people are.

Another variable I find of interest is labor union membership and density, i.e. do you belong, and the percentage of all workers who belong the unions. People who belong to unions are happier, and, more importantly, union density is strongly related to levels of happiness for union members and non-members.

Dylan Matthews: How does that compare to the effects on happiness of non-policy things like, say, the effect of being married or unemployed?

Benjamin Radcliff: The literature would tell you that being married has a huge positive impact on wellbeing, while unemployment has an equally powerful negative effect. They thus make nice benchmarks for comparing the effect of other variables. My results suggest that the effect of the political variables is much larger by orders of magnitude.

Dylan Matthews: Can you talk a bit more about what you mean by “decommodification”? Do you mean not being reliant on work to live — not being a commodity yourself — or the carving out of certain things (human organs, say) that just aren’t commodities you can buy and sell?

Benjamin Radcliff: A society is decommodified to the degree to which people are not entirely dependent on labor market participation in order to survive — principally because they are aged, because they are ill, or simply because jobs are scarce, but also, potentially, so that they can take time to care for a new child or an ailing family member, etc. My research suggests people lead better lives in those societies that are the most decommodified. The reasons are easy enough to understand: There’s a famous quotation observing that a capitalist economy, whatever its many positive aspects, creates a situation in which people have to behave as commodities in order to survive. It doesn’t take great insight to realize that people do not enjoy being reduced to commodities, so a society that limits that necessity is likely to be a better one in which to live.

Now, to be sure, the market economy absolutely contributes to human well-being in other ways — no one can deny that — but we have a macro- vs. micro-problem. At the macro level, capitalism works well. I would agree that the market society is one of humanity’s greatest achievements. But at the micro level it depends at the very core of its logic, as even Adam Smith was at pains to point out, on the idea of using other people (employees) as a means to making profits for oneself. The people we hire to do work are just mere commodities in the profit-loss calculations, no more worthy of special concern than barrels of oil or bushels of grain. The last chapter of my book (“The Political Economy of Human Happiness”) discusses these moral tensions that capitalism creates. My conclusion is that the social safety net, labor market regulations and labor unions all limit the degree to which people become mere commodities, and thus are more likely to lead fulfilling lives.…

On a positive note just in time for the Holiday Season, we can be assured that we have it within our power to increase happiness throughout the nation by joining together, as a government, in decommodifying ourselves within our own society, but that means that we cannot leave power in the hands of those who would commodify us.