You must have missed the bit that says, “we base our proposal on emerging empirical evidence on what makes individuals happy”.

Check out the new book by Richard Layard (an economist at LSE) ‘Happiness: Lessons from a New Science’

For an Australian perspective
http://www.cis.org.au/policy/spr03/polspr03-7.htm

Classic Hayekian knowledge didn’t imagine a society in which all (as Aslan says even the people who consider themselves poor) have everything they need.

So classic economic theory works for poor countries but not rich ones. Happiness for people in rich countries has not increased in the last 50 years, although incomes have.

Good relationships do make us happy, but working for increased economic success decreases our chances of good relationships. Trust in our community (as measured by the old wallet in the street trick) also corresponds to happiness.

But for example, classic economic theory increases unhappiness, as it proposes a mobile population is desirable and more efficient. However, mobility detracts from our ability to form good relationships and also decreases community trust; there is a correlation between crime and the numbers of newcomers in the community.

The most miserable are people in communist countries but the happiest are the highly taxed Scandinavians; perhaps because they do not see their taxation as arbitrary but as a contribution to a decent society in which people value things other than ‘getting ahead’.

Aslan, absolutely brilliant.Bozzie well done as well
The basics are well and truly covered if people do not smoke, drink or gamble, or buy $100 pairs of jeans and $150 sneakers when they obviously can't afford it.
There are very few people in this country who are poor who work hard and buy their necessities before their wants.
Kenny arguments about getting rid of sportspeople,movies stars because they are paid too much is silly. What about all the happiness people get from watching movies and sport or listeing to music.

t.u.s.

No, Mollydukes, I can assure you that I did not miss the point which suggests that "we base our proposal on emerging empirical evidence on what makes individuals happy".

My previous posting essentially questions the veracity of "happiness" research, and its public policy implications, primarily on the basis that happiness is inherently subjective to the individual. For instance, the robustness of qualitative survey evidence would be of concern in this area.

To go further, I am alarmed at the potential for using such an inherently subjective construct as "happiness" as yet another rubbery justification for wholesale government intervention, as is the case in the paper for greater tax progressivity. As a personal aside, I am not a supporter of income tax progressivity, but would a government hell-bent on promoting progressivity, using a "happiness" rationale, ask me as to how I feel about it, and then duly consider my views on the matter? I fear not.

To my way of thinking, this paper represents a case of scientism (again, as explored in detail by Hayek) at its worst. Just because something is "empirical", Mollydukes, does not shield it from scrutiny.

This lot and other do gooders talk about happiness an excesses and myself and many others are working very long hours,raising a family,paying taxes,school fees, food ,etc and these two over indulged lawyers are trying to tell us we have too much.Give us a break.After paying for all the stupidity in the form of red tape,excess insurances and regulation due to fear litigation there is hardly enough left for savings and retirement.This sort of mentality just encourages higher taxation and the growth of more Govt bureaurarcy that expands in the guise of protecting us.No wonder birth rates are falling.Our lawyer friends earn too much in proportion to what they actually contribute to society.They have us tied in knots and fearful of our own shadows.What a wasted use of intelligence to manufacture a need based on weakness and then sell us our rights.

The point is, that ‘happiness’ is not a subjective and vague concept. This research raises the issue anew but it is not a new idea (agreed Bozzie). That old but great mythology, the Christian religion, has also made similar claims about happiness for thousands of years.

Classical capitalism, and although I haven’t read Hayek, I have read enough of capitalist theory to understand this, only works perfectly if you have perfectly logical and rational individuals.

We are not and never have been purely rational and so governments have always had to step in and stop the powerful and greedy (who are not necessarily the ‘best’) from subverting the system.

All this article does is suggest that there is some more up-to-date knowledge on which to base taxation and other Government policies that would be more rational to cater for irrational people. Lke the one example I provided of the miss-match between capitalist theory and happiness theory.

The depth and extent of the irrationality present in the population, can be judged by the failure of people here to understand the article and the total rejection of the idea. LOL, even to attacking the writers because they are lawyers.

Arjay, obviously you aren’t one of the Australians who spent millions last year on food they didn’t eat and things they didn’t use or want.

Who were all those people, since so few people here admit that they have more money than they need.

I know I have but so many people here are sure they pay too much tax and need more money?

I’d post the link to this research but nobody would go there. You are all so sure that your opinions are better than research. Apparently research leads to scientism. LOL again.

The economy, according to Hayek, most certainly does not rely on logical, rational individuals (in a neoclassical economics sense) to help ensure the workings of a market economy. In fact, quite the opposite - some of his famous papers "Economics and Knowledge" and "The Use of Knowledge in Society" explains this perpsective further. These works most certainly puts paid to the notion that governments can somehow cater for irrational people by employing a vague, subjective concept such as individual "happiness" to justify changes in taxation/expenditure parameters. Mollydukes, I would be really happy to read the link that you could prospectively provide on this issue, so why not provide that?