Abstract
If I agree to do a job for a friend for $100, my friend and I would get very upset if someone else would put his hands on our shoulders, telling us that he wants a 20 % Value Added Tax and 25 % Income Tax of the remaining $80, $40 altogether. Perhaps we would cool down a bit if he would be a nice guy and if he would tell us some reasonable story about all the good things he wants to do with our money. But we would still be rather upset and critical. Benjamin Radcliff however, argues that there is a positive relation between the size of governments, as expressed in expenditures and taxation, and average happiness in nations. His conclusion is counterintuitive but nevertheless convincing, in particular by his excellent statistical analysis of available data. His argument would have been even more convincing, if he would have focused a bit more on his key-problem: poverty and financial insecurity in free-market societies. This problem can be solved by a gradual introduction of a basic income, in combination with more political attention for the distribution of labour in society. Work has to be done by somebody! He also should have paid more attention to the quality of governments as a necessary condition for his argument, and he should have acknowledged that even a small government can be very effective. Big government is neither required nor sufficient for happiness! In this article Radcliff’s argument will be summarized first, followed by some critical comments.
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The phrase “commodification of labour” refers to the transformation of human labour to a commodity with a certain price, independent of any social context and the needs and wants of the workers. ‘Decommodification of labour’ is, as defined by Esping Andersen: the degree to which individuals or families can uphold a socially acceptable standard of living independent of market participation.
A well-known example: some collective contracts in the Netherlands facilitate the combination of having a job and taking care for children (and sometimes for relatives who need some personal care temporarily), with some regulations for parental leave and part-time jobs. Since these regulations appeared to be appreciated they were incorporated in national legislation. Such regulations obviously contribute to happiness and macro-productivity. In order to respect more specific regulations in collective contracts for sectors of industry or individual companies, many regulations at a national level can be ignored if these collective contracts are more beneficial for employees.
Helliwell and Huang (2008) make the same distinction but speak instead about the ‘GovDem-’ and ‘GovDo- elements’ of Government-quality.
Radcliff observes that free markets did not change the historical fact that there is always some ‘kleptocracy’ at work: an elite segment of society, like a pharaoh or king and their families, or some nobility or clergy, expropriating some surplus wealth of other people.
This extraction of surplus may have positive consequences by the creation of collective goods, like physical or social infrastructures that contribute to the general quality of life.
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Ott, J. Impact of Size and Quality of Governments on Happiness: Financial Insecurity as a Key-Problem in Market-Democracies. J Happiness Stud 16, 1639–1647 (2015). https://doi.org/10.1007/s10902-014-9576-6
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DOI: https://doi.org/10.1007/s10902-014-9576-6