Showing posts with label economic security. Show all posts
Showing posts with label economic security. Show all posts

Monday, March 20, 2017

Happiness: A Matter of Prosperity or Economic Security?

A macro-economist would probably assume that the percentage of people rating their lives positively enough to be considered thriving is positively correlated with real GDP per capita. Yet evidence suggests that this is not the case. The key to happiness, I submit, is having the sense of foundational economic security—that come what may, even in the case of rich people, you won’t fall through the cracks. It is difficult to thrive over a continuous, subterranean (i.e., subtle) anxiety, whereas a sense of security, such as most children feel while still living in their childhood homes, is a sturdy foundation on which a sense of thriving can grow and survive. I think most people, particularly Americans, take this point for granted, and thus are all too willing to make staples like housing, food, and health care conditional on having money.


In Britain during the two years leading up to the referendum to secede from the E.U., Gallup found that the percentage of people who were happy in the sense of having the sense of thriving fell 15 percent.[1] Meanwhile, GDP per capita (PPP) in current international dollars increased from $38,873 to $41,499.[2] Egypt, likewise, went from 29 percent “happiness” in 2005 to 8 percent in 2012, while GDP per capita increased from $8,123 to $11,210. Clearly, something other than the level of prosperity is behind changes in happiness as a sense of thriving.


That Norway (7.537), Denmark (7.522) and Iceland (7.504) led the pack among countries in terms of happiness as thriving in 2017, with the Netherlands coming in sixth and Sweden tenth may suggest that having an economic safety-net may be important. The United States stood at only 6.993, and the safety nets in those states are partial. To be sure, the state of France in the E.U. came in even lower, at 6.442, and Italy at 5.964, so we cannot conclude that the stronger safety nets in the E.U. necessarily translate into more happiness. However, even within the E.U. Denmark and the Netherlands were known for their well-fortified socio-economic infrastructures, whereas in the U.S. only Massachusetts and California were known to have relatively encompassing social policies in comparison with the other American states. Unfortunately, Gallup lumped all of the American states together while distinguishing the European states, so we cannot tease out differences within the U.S. 

Even so, the high marks of Denmark, Norway, and the Netherlands suggest that having a solid social-welfare safety net for the most vulnerable in matters of food, housing, and medical care is at the very least consistent with a broad sense of happiness in the sense of not merely surviving, but thriving in life. With less of the existential, conditional angst, people rich or poor can feel more stability upon which they can step out onto striving, venturing, into the unknown, with paradoxically a higher chance of sustainable self-sufficiency.


1. Jon Clifton, “The Happiest and Unhappiest Countries in the World,” The World Post, March 20, 2017.
2. Source: The IMF

Sunday, January 29, 2017

The French Socialist Party’s Proposal of a Universal Income Amended: An Economic Floor Providing Economic Security to the Poor

Benoit Hamon, “riding to victory” from political obscurity on a proposal to “pay all adults a monthly basic income,” defeated the recent Prime Minister, Manuel Valls, in a presidential primary runoff election of the Socialist Party in the E.U. state of France.[1] Although “Hamon wasn’t as tainted as Valls by Hollande’s unpopularity” because Hamon had “rebelled and quit the government in 2014,” whereas Valls served more than two years as Hollande’s prime minister in the state legislature, Hamon’s “proposal for a 750 euros ($800) ‘universal income’ that would be gradually granted to all adults also proved a campaign masterstroke. It grabbed headlines and underpinned his surprise success in the primary’s two rounds of voting.”[2] I submit that the proposal, although flawed from the standpoint of economic security, fits well with the industrial world of global capitalism.

Under Hamon’s proposal, the no-strings-attached payments could be made to more than 50 million adults in the state. The “no-strings-attached” aspect is crucial to the provision of economic security, which is itself of significant psychological and financial value to people who are either unemployed or live from paycheck to paycheck. Put another way, the lack of conditionality can give such people a more stable peace of mind that could not but improve the quality of life generally in the daily life of a town or city in interpersonal dynamics. The temptation would be to begin to insist that the money be used for A, B, and C, but not on X, Y, and Z. Even such salubrious conditionality would undercut the stability afforded by the faith that the money would be come every month necessary—come hell or high water. I submit that Western peoples tend to discount the value of financial assurance or stability—essentially the provision of a floor or net that can be relied on—just in terms of the foregone anxiety alone.

The problem is that Hamon meant the payments to go to every adult, irrespective of income and wealth. A wealth person with a good income already has financial security, so adding a floor of 700 euros would be a waste of money from the standpoint of providing economic security. So the cost of the program, which Hamon reckoned to be at least 300 billion euros ($320 billion), can be reckoned as excessive, given the purpose of the program. In other words, taxpayers need not pay so much to make sure that every person has at least an adequate amount of economic security. Lest it be said that the middle- and upper- economic "classes" would then have little self-interest in supporting the proposal, I would simply point to value of the peace-of-mind in knowing that should financial ruin, such as from an economic recession (or depression), injury, or illness hit, economic security would be maintained. Simply knowing this can lighten the step of even a wealthy person, since none of us can say with complete certainty that tomorrow will be like today.


Given the destructive competition that is a part of life in advanced industrial states, the rationale for the claim that every person should be financially secure from hardship is valid. That Hamon proposed a tax on robots to help finance “the measure’s huge costs” points to his rationale for why a modern society cannot simply rely on jobs and even unemployment insurance to provide economic security.[3] Automation has permanently removed many manufacturing jobs, both in the E.U. and U.S. Additionally, the financial incentive of companies to move factories to low-wage, non-developed and newly-developed/industrialized countries like Mexico and China, respectively, means that employment in industrial countries can no longer be relied on to provide economic security to a significant segment of populations, for not everyone is going to go to law- or business-school and graduate—even if education were tuition-free.

Abstractly put, the logic of global capital is not in sync with the fact that in any society, a portion of the adult population is oriented to blue-collar rather than white-collar work. Even if the E.U. were to become a manufacturing utopia, some people, such as the disabled, would still lack economic security, and thus stability, were jobs the exclusive means of providing it. 

In short, the nearly “post” industrial world cannot simply become a world of lawyers, physicians, accountants, and business managers, whereas everyone needs food, shelter, and access to medical care. Providing even a very low floor would pay dividends for everyone as society would be a more civil place, and the cost need not be so much as would be needed to pay 700 euros to every adult, regardless of whether the security is needed. In fact, perhaps 1000 euros would then be an option. Life is too short to sweat the small stuff, yet some people must and their lives are painful for lack of financial security.

Financial worry is like an internal, perpetual war to the poor person, eviscerating life of its pleasure. Quality of life matters, and not just for the poor. How people you interact with are doing in terms of anxiety due to hardship—whether deserved or not—can easily ruin your day, whereas being around calm people can make your day. No man is an island, and in modern society economic interdependence has its drawbacks. Giving other people the psychological security of a financial floor each month can indeed pay dividends to the payers without the floor necessarily being raised so high that the beneficiaries can take advantage of the blessing of security made possible by others.



1. Associated Press, “Hard-left Candidate wins French Socialists’ Presidential primary,” Foxnews.com. January 29, 2017.
2. Ibid.
3. Ibid.

Monday, December 5, 2016

Analysis of Italy’s 2016 Referendum: Beyond the Euro and the E.U.


The predominate axis of analysis in the wake of the Italian referendum in early December, 2016 centered on the euro, the federal currency of the European Union. 

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.