What is progress?

In my last post I gave several reasons why I think the ‘good society’ is a useful concept. There is another reason. The concept of a ‘good society’ may help us to think more clearly about progress.



What is the problem with progress? I am just about old enough to remember the 1950s when the most persuasive point used in favour of any change in Australia seemed to be: “You can’t stand in the way of progress”. A lot of good things were done in the name of progress but other things, particularly uneconomic public investment in dam building etc. gave progress a bad name. More recently the concept of progress has been confused by well-meaning people who have combined national accounting concepts with idiosyncratic values to produce meaningless indicators of “genuine progress”. Further confusion results from the tendency for people who still cling to long-discredited collectivist political views to be described as progressives.


The article in “The Economist” this week (19 Dec ’09 to 1 Jan ‘10) about progress and its perils discusses the popular view that while technology and GDP advance, morals and society are either treading water or sinking back into decadence and barbarism. The general message is that despite a general tendency to shy away from judgementalism many people yearn for a sense of moral purpose. The article ends by quoting Susan Neiman, a philosopher, who asks people to reject the false choice between Utopia and degeneracy: “Moral progress, she writes, is neither guaranteed nor is it hopeless. Instead it is up to us”.


I agree that people need a sense of moral purpose. A large part of the apparent decline in sense of moral purpose, however, can be attributed to a lack of moral clarity. In particular, there seems to be a great deal of confusion about the morality of modern consumer society. It is common to hear even avid users of new technology suggesting that the production of this stuff uses scarce resources but does little to add to their happiness in the long run. So why do they buy it and use it? Could it be because such stuff provides them with improvements in communications etc that are of enduring benefit, even though it has little effect on their emotional states in the longer term? The moral issue, whether it is good for us to have such stuff, does not depend on its transitory impact on our emotional states.


In terms of public policy, if progress means anything it must mean movement toward a good society, or movement from a good society to a better society. Changes can be counted as progress if they improve our capacity to live together in peace, provide us with greater opportunities to flourish or provide us with greater security.


However, the idea of progress also embodies optimism about the future of humanity – the idea that there has been a tendency for material, political, social, intellectual and moral conditions to improve throughout human history and that such improvement will continue in the foreseeable future. Roger Kerr has recently reminded us how inspiring the idea of progress was in the 18th Century. He argues that the idea that life tends to get better over the longer term still has potential to be inspiring today.


It seems to me that despite all the existing and potential problems faced by humanity there is a basis for optimism that advance of knowledge will continue to enable people to enjoy progressively better lives in coming decades.

Is the 'good society' a useful concept?

Readers of this blog will know that over the last couple of months I have been thinking about the concept of the ‘good society’. The time has come to try to summarise why I think the ‘good society’ is a useful concept.



First, I think it would possible for nearly everyone to agree that a good society is one that is good for its individual members and that such a society would have certain objective characteristics. The institutions of a good society would:
• enable its members to live together in peace;
• provide its members with opportunities to flourish – to have more of the things that are good for humans to have; and
• provide its members with a degree of security against threats to individual flourishing, including security against misfortunes such as accidents, ill-health and unemployment.
Some people would want to go further in specifying characteristics that may make a society good for the people living in it, but attempts to do this may place at risk the ability of people to live together in peace. (See: Is there such a thing as a good society? and What are the characteristics of a good society?)


Second, the ‘good society’ concept is distinguishable from other similar concepts such as the ‘great society’ or ‘open society’. When a society agrees to provide individual members with a degree of security against threats to individual flourishing, for example through provision of a welfare safety net, it departs to some degree from the liberal principles of an open society. But it may still be a good society. (See: Are the institutions of a good society the same as those of the great society?)


Third, the characteristics of a good society are measurable.
• It is possible to measure the peacefulness of different societies using the safety and security sub-index of the Legatum prosperity index. A large part of the variation in peacefulness of different societies can be explained by World Bank governance indicators relating to political stability and the quality of legal institutions. (See: What institutions explain the peacefulness of societies?)
• It is possible to measure opportunities relating to a range of aspects of human flourishing in different societies such as: economic opportunity; the extent that people feel happy or satisfied with life; safety and security; health and longevity; educational opportunity; freedom to choose how to live; the opportunity to participate in political processes; social capital; satisfaction with efforts to preserve the natural environment. Many of these indicators tell similar stories about human flourishing. Economic freedom and governance indicators also tend to tell similar stories about the potential for human flourishing in different societies. (See: Do all well-being indicators tell similar stories about human flourishing? and Do economic freedom and governance indicators tell similar stories about human flourishing?)
• Economic security in different societies can be measured by indicators such as the average income of people at the lower end of the income distribution. This measure is closely related to average income levels and measures of economic freedom and good governance. (See: Does economic security depend on average income levels?)


Fourth, it possible to identify fairly clearly how good various societies are for the people who live in them without making the subjective judgements that would be necessary to combine various indicators into a ‘good society’ index. The indicators generally tend to tell a similar story – but a combination of indicators tells a more reliable story than any single indicator considered in isolation.


Fifth, it seems to me that the concept of a good society is an aid to clear thinking about the kinds of societies we want to live in. When people suggest, for example, that policies in particular societies should be changed to place more emphasis on life satisfaction and less emphasis on raising incomes it may be useful to remind them that high average life satisfaction and high incomes are both common characteristics of good societies.

Does economic security depend on average income levels?

In an earlier post I suggested that there would be widespread agreement that a good society would provide members with a degree of personal economic security against potential threats to individual flourishing, including misfortunes such as accidents, ill-health and unemployment. (See: What are the characteristics of a good society?)

In suggesting that there would be widespread agreement about this I had in mind that nearly everyone would tend to be somewhat risk averse if they had to choose what kind of society to live in without any knowledge of their own personal circumstances. Rather than focusing exclusively on the median (or most likely) outcome of their choice I think nearly everyone would have some regard to what their quality of life might be like in various societies if they were to draw the short straw in terms of parentage, health, intelligence, good looks and good luck. (How people would actually respond to such a thought experiment is an empirical question. I recall reading somewhere that John Rawls’ difference principle has not been supported by empirical research, but this principle seems to assume extreme risk aversion applies to choices made behind a veil of ignorance. If any readers are aware of useful empirical research on this question I would be grateful to be made aware of it.)


It seems to me that the average income of people at the lower end of the income distribution is an appropriate measure of economic security because it relates directly to the quality of life that people are able to lead. This can be estimated for a wide range of countries using survey data on the percentage of national income or consumption of people in the lowest 10 percent of the income distribution. Another relevant indicator is survey data on the proportion of the population that have at times not had enough money to buy food that their family needed in the preceding 12 months.
The following table shows countries ranked by the average income level of people in the lowest 10 percent of the income distribution. Percentages with not enough food are also shown along with a range of other indicators of average well-being and institutional quality. As in similar tables in recent posts, the ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red. Indicators are defined below the table.
As would be expected, countries which rank highly in terms of average incomes of the bottom 10% tend to have the lowest percentage of people who claim that at times they did not have enough money to buy food. There are some interesting anomalies, however, at both ends of the spectrum. For example, the percentage claiming that they did not always have enough money for food were higher than would be expected in several high-income countries including the UK, Italy, Australia and New Zealand. Low-income countries in which the percentage claiming inadequate money for food was lower than expected included Nepal, Vietnam and India.

The table shows that average incomes of the bottom 10% of the population depend strongly on the goose that lays the golden eggs – i.e. on the institutional factors that determine average income levels of the whole population. I do not intend to imply, however, that democratic institutions and income redistribution policies of governments play no role in supporting incomes of the bottom 10%. A regression analysis suggests that democratic institutions do tend to support average income levels of the bottom 10% of the population. Examples are evident in the table. Countries in which relatively low ratings on ‘Voice and accountability’ may help explain lower than expected incomes of the bottom 10% include Iran, Tunisia and Argentina. Countries in which relatively high ratings on ‘Voice and accountability’ may help explain higher than expected incomes of the bottom 10% include India and Mongolia.

Hint: Click on the table for a clearer picture.

Notes:
Income index for the poorest 10%: Index expressed as a fraction of estimated average income of the poorest 10% of families in Norway, the country in which the poorest 10% have the highest average income. Estimates based on share of income/expenditure of the poorest 10% of the population from Table M, HDR 2009 Statistical Tables, UNDP.
Not enough food %: The proportion of the population claiming that at times in the preceding 12 months they have not had enough money to buy food that their family needed. Survey data from the Gallup World Poll.
Average income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Voice and accountability: Index compiled by the World Bank capturing perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
Economic Freedom (Fraser): According to the Fraser Institute’s definition, individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Data from the 2009 report (for 2007).
Control of corruption: Index compiled by the World Bank capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. Quality of life index: Gallup World Poll data on “life today” (latest available) country averages, expressed as a fraction of the rating for Denmark, the country with the highest rating.
Social capital: A sub-index of the Legatum prosperity index which reflects how well people are engaged in social networks and relationships that are trustworthy and supportive.

Do economic freedom and governance indicators tell similar stories about human flourishing?

This follows on from my last post: Do all well-being indicators tell similar stories about human flourishing? The indicators that I looked at did tend to tell similar stories – countries that have high average income levels also tend to have high rankings on other well-being indicators.

The purpose of this post is to extend the analysis to consider the institutions that are associated with human flourishing. There is a great deal of evidence that economic freedom is associated with high income levels and other aspects of human flourishing such as health and education. Evidence on the effects of democratic institutions is less clear, although the opportunity for citizens to participate in political processes may itself be viewed as an aspect of human flourishing.
A recent study by Michael Stroup (‘Economic freedom, democracy and the quality of life’ World Development, 35(1) 2007) has examined interactions between economic freedom and democracy on measures of health, education and disease prevention. The study found that while greater economic freedom consistently enhances a range of well-being measures, democracy has a smaller positive influence.

I accept that leaders (and potential leaders) of non-democratic countries with low levels of economic freedom may need to consider whether they should give higher priority to democracy or economic freedom when devising strategies to improve the well-being of citizens. There are good reasons, however, why democracy and economic freedom should be viewed as complementary rather than competing objectives. For example, rule of law is less problematic if there is a mechanism for political leaders who are suspected of considering themselves to be above the law to be voted out of office. Similarly, control of corruption is easier in a democracy where the public has power to dismiss corrupt leaders. It is possible for democratic rights to result in greater rent-seeking and less economic freedom, but non-democratic rulers do not necessarily promote economic freedom and widespread prosperity – some seek to benefit themselves and their cronies by impoverishing the general public.

The following table presents indicators of the performance of various societies in relation to two indexes of economic freedom and the World Bank’s governance indicators. As in the table in the preceding post, countries have been ranked by per capita income levels. The ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red.
The table shows that all the institutional indicators tend to tell a similar story about performance of various countries. There are, however, a few exceptions for ‘Voice and accountability’, reflecting particularly an absence of democratic institutions in some high-income and upper-middle income countries. In the case of United Arab Emirates and Kuwait this is associated with relatively poor performance in a range of well-being indicators, but that is less evident the case in Singapore and Hong Kong (as can be seen by comparing information in this table with the one in the preceding post).
All the indicators are strongly correlated with per capita income levels. A few countries manage to have high per capita incomes without a high level of economic freedom and good governance – but only by producing a huge amount of oil.
Indicators are defined and information sources are presented below the table. Hint: Click on the table for a clearer picture.

Notes:
Income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Economic Freedom (Fraser): According to the Fraser Institute’s definition, individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Data from the 2009 report (for 2007).
Economic Freedom (Heritage): The Heritage Foundation defines economic freedom as the right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. Data from the 2009 report.
Voice and accountability: Index compiled by the World Bank capturing perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
Government effectiveness: Index compiled by the World Bank capturing perceptions of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies.
Regulatory quality: Index compiled by the World Bank capturing perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.
Control of corruption: Index compiled by the World Bank capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests.

Do all well-being indicators tell similar stories about human flourishing?

Human flourishing is about enjoying the things that it is good for humans to have. It is more than economic opportunity; it is more than feeling happy or satisfied with life; it is more than safety and security; it is more than good health and longevity; it is more than educational opportunity; it is more than being free to choose how you live your life; it is more than the opportunity to participate in political processes; it is more than social capital; it is more than the opportunity to enjoy the natural environment. These things may all be relevant to human flourishing but no single aspect incorporates everything that contributes to individual flourishing. Any list of aspects of human flourishing is likely to be incomplete and include items that are more important to some individuals than to others.



Hopefully everyone who reads the above paragraph will consider it to be a statement of the obvious. However, the idea that there is more to life than feeling happy or satisfied actually seems to be quite controversial. Some happiness researchers, including some economists, seem to think that everything that is good for humans to have can be reduced to a single number reflecting feelings of happiness or satisfaction with life.


In an earlier post (What are the characteristics of a good society?) I suggested that nearly everyone would agree that a good society would provide its members with opportunities to flourish – to have more of the things that are good for humans to have. In another post (Is a good society index a good idea?) I foreshadowed that I would attempt to identify the suite of indicators that are most relevant to assessing to what extent particular societies might qualify as good societies. This post goes some way toward that objective. It presents indicators of the performance of various societies in relation to a range of aspects of human flourishing.


In the following table countries have been ranked by per capita income levels. The ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red.


The table shows that many well-being indicators tell a similar story about human flourishing. It also shows, however, that both per capita GDP and subjective indicators of the quality of life have limitations as well-being indicators. This is particularly evident in regard to societies such as United Arab Emirates, Singapore and Kuwait. (Many of the indicators used in the table are sub-indexes of the Legatum Prosperity Index. Indicators are defined and information sources are presented below the table.)

Notes:

Income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.

Quality of life index: Gallup World Poll data on “life today” (latest available) country averages, expressed as a fraction of the rating for Denmark, the country with the highest rating.
Safety and Security: A sub-index of the Legatum prosperity index. High ratings reflect the existence of a safe environment and peaceful society.
Health: A sub-index of the Legatum prosperity index measuring how well citizens are capable of living long and healthy lives.
Education: A sub-index of the Legatum prosperity index reflecting mainly the years of schooling that a nation’s citizens complete.
Freedom: A sub-index of the Legatum prosperity index which measures how well citizens are able to freely choose the course of their lives and their perceptions of societal tolerance.
Democratic Institutions: A sub-index of the Legatum prosperity index which reflects civil liberties, political rights, the independence of the judiciary etc.
Social capital: A sub-index of the Legatum prosperity index which reflects how well people are engaged in social networks and relationships that are trustworthy and supportive.
Environmental satisfaction: Gallup World Poll data on the satisfaction of citizens with efforts to preserve the environment in their country, presented in index form such that the highest rating country has a rating of 1.0 and the lowest rating country has a rating of zero.

Where are people most satisfied with efforts to preserve the environment?

This question arose as I was thinking about the relationship between the determinants of happiness (i.e. survey measures of subjective well-being or SWB) and human flourishing at a national level.

Recent research has been able to explain around 90% of inter-country differences in average SWB in terms of average income levels, enough money for food, healthy life expectancy, friends to count on, perceptions of freedom, corruption, charitable donations and church attendance. (See: John Helliwell et al, NBER Working Paper 14720.) It is not surprising that these factors affect well-being but it is hard to accept that items on this short list could explain as much as 90% of variation among countries in average well-being. Other factors that might also be thought likely to affect well-being include education, environmental quality, democratic institutions, and participation in cultural and sporting activities.


In the case of education, some studies have shown that while higher levels of education tend to be associated with higher levels of SWB, the effects of education tend to drop out when other factors such as health status and income are included in models. Education improves health and income-earning potential and thus indirectly contributes to SWB. Furthermore, the importance of education to individual well-being does not depend solely on its impact on satisfaction with life or happiness. Education could arguably still be good for people even if it did not make them feel good.


It is possible that similar considerations may apply with regard to environmental quality. For example, water and air pollution are detrimental to health and longevity. Furthermore, arguments advanced in favour of preserving the natural environment do not rest solely on the contribution it makes to the emotional well-being of humans.


However, there does not seem to have been as much research done on the contribution of environmental quality to SWB. This may be because of the difficulty of interpreting available survey data relating to perceptions of the natural environment.


The World Values Surveys include questions concerning the priorities that people give to environmental protection. These surveys show that the proportion of the population who consider that higher priority should be given to environmental protection than to economic growth tends to be somewhat higher in high-income countries with relatively high average SWB. These results might reflect what Ronald Inglehart has described as a shift toward postmaterialist values in advanced industrial societies rather than dissatisfaction with efforts to preserve the environment.


The Gallup World Poll asks respondents specifically whether they are satisfied or dissatisfied with efforts to preserve the environment in their country. Some characteristics of countries in which high and low proportions of the population are satisfied with efforts to preserve the environment can be compared in the chart below. The other variables shown in the chart are: per capita GDP expressed as a percentage of that in the country with highest per capita GDP (United Arab Emirates); average quality of life (data from the Gallup World Poll expressed in percentage terms); government effectiveness -perceptions of the quality of public services; and regulatory quality - permitting and promoting private sector development. (The latter two indexes are sub-indexes of the World Bank’s suite of governance indicators, converted to percentage terms such that the country with lowest rating has a score of 0% and the country with the highest rating has a score of 100%.)

The chart shows that satisfaction with efforts to preserve the environment tends to be somewhat greater in countries with higher average incomes. The factor that stands out most, however, as a characteristic of countries in which there is greatest satisfaction with efforts to preserve the environment is government effectiveness.

Countries which rate highly in terms of both satisfaction with environmental efforts and government effectiveness include Singapore, Austria, Switzerland and New Zealand. At the other end of the scale, countries which combine low ratings in terms of both of these factors include Mongolia, Ukraine and Pakistan.

What institutions explain the peacefulness of societies?

I don’t think many people would dispute the idea that the observance of common rules plays an important role in making it possible for individuals to live together peacefully in society. Even if I were to quote something written by Friedrich Hayek that emphasizes the importance of that idea, I doubt whether that would provoke many people to dispute it. (For some suitable quotes from Hayek, see: Are the institutions of the “good society” the same as those of the “great society”? )

 However, in this instance accepting the logic of a proposition is only one step along the road to understanding its practical significance. It might be useful to know to what extent the peacefulness of societies can be attributed to various factors associated with observance of common rules – factors such as political stability, the quality of legal institutions, civil liberties, and strong social networks and relationships. I report below an attempt to assess the relative importance of these factors using regression analysis.


The measure of the peacefulness of societies used in the analysis is the Legatum Institute’s safety and security sub-index (LSS), which is a component of its Prosperity Index. Indicators covered in the LSS include standard measures of violence such as homicides and assault, refugees and displace persons, flight by professionals (brain drain), civil war and ethnic violence, survey information relating to incidence of theft and perceptions of whether people feel safe walking alone at night. (I compared the LSS and the Global Peace Index here.)


The measure of political stability is the World Bank’s political stability and absence of violence index which captures perceptions of the likelihood of governments being overthrown by unconstitutional or violent means.


The measure of the quality of legal institutions is the World Bank’s rule of law index. This index captures perceptions about contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence. The appropriateness of this index for current purposes is discussed here.


The measure of civil liberties is the Freedom House civil liberties index. This index covers freedom of expression and belief, associational and organizational rights, rule of law and personal autonomy.


The measure of social networks and relationships is the Legatum Institute’s social capital sub-index (LSC), which is a component of its Prosperity Index. The coverage of the LSC includes perceptions relating to reliability of others, importance of friends, trustworthiness of others and membership of various types of community organizations.


To enable the estimated contribution of the explanatory variables to be compared more readily all indexes have been converted to the same form as the Legatum indexes i.e. with highest value equal to one and the lowest value equal to zero. Estimated coefficients (with standard errors in brackets) are as follows:


• Intercept:                              0.06 (0.03)
• Political stability:                 0.46 (0.06)
• Quality of legal institutions: 0.42 (0.06)
• Civil liberties:                     -0.02 (0.05)
• Social capital:                     -0.01 (0.04)          Adj. R squared = 0.82


The results confirm that political stability and quality of legal institutions play an important role in explaining the peacefulness of societies. They suggest that civil liberties and social capital do not play a significant independent role in this context, but it is possible that these factors may contribute positively to political stability and the quality of legal institutions.


A chart showing how well political stability and quality of legal institutions predict the peacefulness of societies is shown below.

It is apparent from the chart that actual peacefulness is never much greater than predicted peacefulness. This means that political instability and poor quality legal institutions virtually guarantee that a society will not be peaceful.

Does the World Bank's rule of law index measure the quality of legal institutions?

The authors of ‘Governance Matters’, Daniel Kauffman, Aart Kraay and Massimo Mastruzzi, tell us that the World Bank’s rule of law index captures “perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence” (Working Paper 4978, p 6).



On the basis of that description the index seems highly relevant to assessment of whether societies have institutions that enable their members to live in peace with one another. (For background on reasons why I am interested in such indexes see: Is a ‘good society’ index a good idea?)


I think it would be more appropriate to describe this index as a legal institutions index than as a rule of law (RoL) index. The rule of law is the ancient principle that no-one, not even the king, is above the law. It possible for a jurisdiction to have a relatively high score on the World Bank’s RoL index even though its legal foundations for rule of law may be somewhat tenuous e.g. Hong Kong. (Someone might be interested in a previous post on the question: Is rule of law an esoteric concept?)


As with the five other indexes in the World Bank’s suite of governance indicators the RoL index is based on perceptions based data reflecting the views of a diverse range of people, including tens of thousands of household and firm survey respondents and thousands of experts working for the private sector, NGOs, and public sector agencies. The aggregation method gives greater weight to indicators that are correlated with each other.


The RoL index seems to cover similar ground to the Legal structure and property rights sub-index (LSPR) of the Fraser Institute’s economic freedom index. Indicators incorporated in the LSPR cover: judicial independence, impartial courts, protection of property rights, military interference in legal and political processes, integrity of the legal system, contract enforcement and regulatory restrictions on sale of property.


The chart below shows how closely the World Bank’s RoL index and the Fraser Institute’s LSPR index correspond to each other. The blue diamonds represent actual indexes and the pink diamonds represent the predicted value of the LSPR index using linear regression.

In later posts relating to good society indicators I will use the World Bank’s RoL index as an index reflecting the quality of legal institutions.

How closely does the global peace index reflect internal safety and security?

In my last post on the Global Peace Index (GPI) I implied that potential users (such as myself) who are primarily interested in the internal peacefulness of different societies would be more interested in a sub-index excluding the effects of militarization. It so happens that a sub-index of the Legatum Prosperity Index, the Safety and Security Sub-index (LSS), may provide a good measure of internal peacefulness.

Indicators covered in the LSS include standard measures of violence such as homicides and assault, refugees and displace persons, flight by professionals (brain drain), civil war and ethnic violence, survey information relating to incidence of theft and perceptions of whether people feel safe walking alone at night. The safety and security indicators covered in the GPI seem to be broadly similar.
The LSS and GPI are compared in the chart below. The position of each blue diamond reflects the scores on both index for each country. The pink diamonds are predicted scores of the GPI resulting from a linear regression.

It is apparent from the chart that both indexes present a similar picture of the peacefulness of the vast majority of countries. The two main exceptions are Israel and the United States – which have a higher level of internal peacefulness than others with similar GPI scores.

What does the global peace index measure?

The creators of the Global Peace Index (GPI), the Institute for Economics and Peace (aka Vision of Humanity), claim that their index represents the first attempt that has been made to rank the nations of the world by their peacefulness. The GPI is apparently the brainchild of Australian entrepreneur, Steve Killelea, but has been developed in conjunction with the Economist Intelligence Unit and with the guidance of an international team of academics and peace experts.


As noted in the 2009 GPI report, peace is notoriously difficult to define. The approach adopted was to define peace as ‘absence of violence’ and to use metrics that combine both internal and external factors to rank144 countries. The Index is composed of 24 indicators covering three broad categories: measures of ongoing domestic and international conflict, measures of safety and security in society and measures of militarization.


The third category seems to me to raise a problem because it may sometimes be possible for us to promote peace more effectively by sending potential aggressors a credible message that if they mess with us they will suffer hellish consequences, rather than by disarming to convince them that we do not pose a threat. Instead of basing the index on the assumption that unilateral disarmament would promote peace I think it would have been preferable to leave this question open for further research.


For the benefit of potential users (such as myself) who are primarily interested in the internal peacefulness of different societies it would be desirable for the creators of the GPI to publish sub-indexes which exclude the effects of militarization (and international conflicts).


In view of the way the GPI has been constructed it is not surprising that a country like New Zealand, which does not have any reason to feel threatened by any other country, should be given the highest ranking as a peaceful country. The United States could be expected to have a somewhat lower ranking because of its greater militarization. I was surprised, however, that the GPI ranking of the U.S. is as low as 83 out of 144.


The relatively low ranking of the U.S is not entirely attributable to militarization. The percentage of the population in jail in the U.S. is apparently higher than in any of the other countries included in the index and the rate of homicide is higher than in New Zealand (and many other countries including Australia and the Britain).


The chart below indicates that it is possible for a country to have a relatively low GPI ranking while remaining relatively peaceful. For example, despite its relatively low ranking, the GPI score of the U.S. is much closer to that of New Zealand than to that of Iraq.

One final thought might be worth noting. This measure of the peacefulness of nations does not take account of the extent that different governments pursue policies that induce some of their residents to send their capital to other jurisdictions to avoid confiscatory taxation. This omission may be important for users who are interested primarily in the internal peacefulness of different societies.

Is a 'good society' index a good idea?

Before attempting to answer this question I should recap some previous posts about the good society.
 
Is there such a thing as a good society? Yes. A good society is one that has institutions that are good for its members.

What are the characteristics of a good society? I suggest three characteristics:
• Its institutions enable its members to live together in peace.
• Its institutions provide its members with opportunities to flourish – to obtain the things that it is good for humans to have.
• Its institutions provide members with a degree of security against threats to individual flourishing.


Are the institutions of a good society the same as those of the “great society”? I suggest that there is a lot of overlap between the institutions of the good society and the liberal principles of the great society, or open society, as discussed by Friedrich Hayek.


Why is it wrong to coerce people for their own good? Richard Kraut raises this question in his book, “What is good and why”. My answer is that it is wrong to coerce people for their own good because this is not consistent with living in peace with them.


Should we expect the rules of the good society to be good for everyone? Richard Kraut questions societal rules such as those discouraging theft and interference with other people because they are not always good for everyone. The point I make is that the rules for the good of all – rules that nearly everyone would agree to behind a veil of ignorance about their own particular interests and vulnerabilities - are not necessarily good for everyone.


So, I think I am on the way to identifying the characteristics and institutions of a good society. Having reached this point the thought has crossed my mind that it might not be too difficult to identify indexes that others have constructed that measure the various characteristics and institutions of a good society. If I were to combine those indexes into a good society index that would make it easy to classify various societies as bad, not so bad, OK, good, better, best. (I might even be able to think of a better classification.) A composite index of this kind would make the statistical feast more easily digestible and might even grab public attention (and perhaps even make me rich and famous).


I see a couple of problems with this idea, apart from the possibility that the world might already have just about enough composite indexes measuring broadly similar things (and fame would probably not be good for me). First, as I noted in my article ‘Gross National Happiness’, recently published in Asian-Pacific Economic Literature (abstract; draft), there is the problem of finding appropriate weights for each item included in a composite index. It is not really good enough to just have a set of weights that reflect my own values. Even if I could find a Nobel prize winner, or two, prepared to endorse a particular set of weights that would not really help much because people do not get Nobel prizes because their values are universally accepted. Ideally, every user of the index would be able to use a set of weights reflecting their own values, but then we would have a multitude of indexes rather than a single index.


Other options include use of equal weights or weights that come out of regression analyses that use the sub-indexes to explain per capita GDP levels or average life satisfaction in different countries. Equal weights are intrinsically mindless and the second option would not be much better because the ‘good society’ index resulting from it would not amount to much more than an index of average of per capita GDP or average life satisfaction.

The second problem is that composite indexes tend to hide the relationships between sub-indexes. It seems to me to be more useful to make observations about such things as differences in life expectancy in countries with differing levels of economic freedom than to be able to classify particular societies as being good, bad or indifferent using a single index number.


I have decided that a good society index would not be a good idea. In later posts I will attempt to identify the suite of indicators that would be most relevant to assessing to what extent particular societies might qualify as good societies.

What does the Legatum Prosperity Index measure?

Prosperity. However, my initial reaction when I first looked at the index was that it was more like an index of the quality of life or well-being than of prosperity. My perception of prosperity was too narrow. One of the purposes of the index is apparently to encourage people ‘to take a holistic view of prosperity’. The authors might have a point. Dictionary definitions of prosperity don’t focus solely on economics – they suggest that prosperous is synonymous with flourishing, successful and thriving.

The index has nine components or sub-indexes:
• Economic fundamentals
• Entrepreneurship and innovation
• Democratic institutions
• Education
• Health
• Safety and security
• Governance
• Personal freedom
• Social capital.

Is this a comprehensive list of factors affecting human flourishing? One apparent omission is environmental quality. Although this is considered to some degree in the indicators used for health, I get the impression that the authors’ view of prosperity does not place much value on the enjoyment that people obtain from the natural environment. I wonder whether that view is backed up by research findings.

The main problem I have with this report is that I am not sure how much substance lies behind it. The presentation is incredibly smooth, mainly because it is completely uninterrupted by references to research papers or data sources. The preface suggests that information on data sources is available on the prosperity web site. All I could find on that site, however, apart from the acknowledgement of input from research consultancy, Oxford Analytica, is a statement that the index draws on the Gallup World Poll and other data and includes only factors for which a statistical link with material wealth or life satisfaction can be shown.

The Legatum Institute claims to be a think tank. It seems to me that no organisation claiming to be a think tank should publish research findings without making sure that the underlying research is open to public scrutiny.

However, leaving aside my doubts, this report is worth looking at just to view the chart showing that countries with high prosperity tend to have high performance on all sub-indexes and those with low prosperity have low performance on nearly all sub-indexes.

Addendum:
Hamish Banks of Legatum has responded as follows:
"Thank you for writing about the Prosperity Index; may I refer you to the Prosperity Index website where you may download both the 55 page Methodology and 85 page Technical Appendix, which should answer your questions on the the data sources? (http://prosperity.com/report.aspx)

So far as possible we have been transparent with the sources and in some cases the data is publicly available; in others, like the Gallup World Poll, it is proprietary and not ours to publish.
You are right in surmising that the non-inclusion of environmental quality is based on research findings: we did not simply choose the factors that appealed to us, but regressed more than 200 variables to the 79 for which there was a clear and strong correlation with prosperity - environmental quality qualified only, as you note, in the general health indicators."

How do preferences relate to well-being?

Readers of this blog will know that I am attracted to a developmental view of individual well-being. I have previously argued that if happiness is viewed as a positive emotional state (involving, for example, peace of mind, optimism, uncompression, exuberance, flow, joy and cheerfulness) then well-being cannot be the same thing as happiness. Well-being also involves other factors - including personal security and security of property, health and longevity, access to goods and services – as well as a positive emotional state. (See: What are the links between freedom and flourishing?) The kind of life that is best for all humans is a life of flourishing - one that follows a pattern of psychological and physical growth filled with enjoyment.

 What does a developmental view of individual well-being have to say about the relationship between well-being and the satisfaction of preferences? Richard Kraut’s questions whether a more preferred outcome is necessarily a better outcome for an individual, even if it satisfies her properly informed and rational desires. His point is that it is possible to have properly informed and rational desires that are not good for us.

 One example Kraut gives is a desire for fame:


“There is no way to criticize the desire for fame except to say that its object is not something that it is good to have. But it should not be at all surprising that human beings sometimes have desires whose objects fall into this category. Nature has not installed in us some wonderful mechanism that guarantees that what propels us forward and focuses our minds on certain courses of action will bring us to something that it is good for us to have. Somehow or other, we have to take steps to learn about what is good for us, and even to care about what is good for us; that is not a topic about which we inevitably come to have tacit knowledge merely by virtue of having desires” (“What is good and why”, p 185).


Daniel Hausman and Michael McPherson note that if well-being is not the same as preference satisfaction then the normative significance that economists attach to preference satisfaction would appear to be without foundation. These authors then offer a new partial defence of welfare economics based on the view that if people are more or less self-interested with respect to certain alternatives, then economists can use their preferences to make inferences concerning what they believe will benefit them. This means that if it is reasonable to suppose that individuals are good judges of what will benefit them, then economists can use people’s preferences as evidence concerning what in fact makes them better off (‘Preference satisfaction and welfare economics’, Economics and Philosophy: 25 (2009).


What happens if we are dealing with policy issues where evidence has accumulated that individuals are often poor judges of what will benefit them? Does this mean that paternalistic government intervention will produce better outcomes? No. The argument that imperfections in individual judgement justify government intervention is just as fallacious as the old argument that departures from perfect competition in markets justify government interventions to increase competition.


In order to consider whether intervention is warranted it is necessary to consider the consequences of alternative institutions, or rules of the game. The judgements that governments make on behalf of individuals may be worse than the judgements that people make on their own behalf. For example, compulsory superannuation in Australia forces some young people to begin to save for their retirement at a time of their life when they would probably be better off saving to buy a house.


In addition, it is important to consider the consequences of government interventions that displace personal responsibility. It is good for adult humans to accept responsibility for decisions affecting their own well-being because this contributes to their personal development and self-respect.

Should we expect the rules of a good society to be good for everyone?

In my view, we should expect the rules of a good society to have the assent of nearly everyone but that does not mean that these rules are good for everyone. In particular, the law of liberty – preventing people from interfering with the protected domain of others – cannot be expected to be good for everyone even though it serves the good of all.

 A good place for me to begin to explain the point I am trying to make is with Richard Kraut’s suggestion that under certain conditions norms, rules and laws do not serve the good of all (“What is Good and Why”, p31). The example he gives is of a situation in which our confidence that it is wrong to steal could possibly be diminished because “the property system may make it impossible for some to have the material resources they need to maintain their health ...”. Kraut asks: “What objection can be made to taking what is not yours if you need it to sustain the health of your children, and the person from whom you take it has so much that it would do him no good?” The point he is making is that the rule against taking what is not yours “must be evaluated as a component of the social system in which it is embedded”.



I agree that the rule must be evaluated as a component of the social system, but I don’t think we need to be assured that the social system functions in a way that is good for all members before we can endorse laws prohibiting theft. Does Kraut’s example demonstrate that we could expect people to flourish to the same extent in a society with large wealth disparities in which there are no rules against theft as in a similar society where there are rules against theft? I don’t think so. If there were no rules against theft some resources currently devoted to mutually beneficial activities would be allocated to theft and to the protection of property against theft. Those who have a particular aptitude for stealing might benefit, but the costs to other people would clearly outweigh the benefits to thieves.



Some might argue, however, that our disapproval of theft should allow exceptions in circumstances where the thief has great needs and the victim is relatively unaffected. We might approve of such redistributions if we were to choose behind a veil of ignorance about our chances of being in a situation where we might be tempted to steal or of becoming a victim of theft. In the real world, however, how could a potential thief be sure that a potential victim would be relatively unaffected by the theft of any particular item? Even people who wear their wealth lightly can still own items that have great sentimental value.


Such considerations suggest to me that nearly everyone would agree that theft should be prohibited. I think it is likely that support for such a prohibition would be widespread even among population groups whose members have reason to be aggrieved about their treatment under the prevailing social system. In this sense disapproval of theft may be widely considered to be for the good of all, or at least widely considered to be likely to produce better outcomes than would an ambivalent attitude toward theft.

 Does it change matters when the redistribution is undertaken by governments rather than by thieves? There are similarities between theft and rent seeking - the competing efforts of various individuals and interest groups to use the coercive powers of the state to have income redistributed to themselves at the expense of other groups in the society (for example through government budget allocations, provision of services, trade protection and other forms of industry assistance). The involvement of governments is an important difference, however, because the decision-making processes of governments may be widely viewed as having greater legitimacy than those of thieves. In addition, the information required to implement modest redistributions that might be given nearly universal assent behind a veil of ignorance – for example, provision of a welfare safety net – is available to governments responsible for implementing such redistributions.

 The considerations involved seem to be similar when we come to paternalistic interventions to prevent adults from harming themselves. Norms, rules and laws protect individuals from all kinds of interference by other people, including well-meaning interference to prevent people from harming themselves. It is possible, however, to construct examples where our confidence that it is wrong to interfere is diminished. Richard Kraut gives us the example of a person who has fallen into an acute but curable despondency who proposes to kill himself even though he has many good years ahead of him (p 238). The argument that it is wrong to coerce a person for his own good because this is inconsistent with living in peace with him (see my last post) loses some force if the powers of judgement of the person concerned are obviously impaired.


However, the circumstances in we would condone people coercing others for their own good are extremely limited. We might have somewhat more confidence in intervention by government agencies than by individuals whom we have no reason to trust, but substantial moral hazards are involved whoever is permitted to intervene. Regulation might be more permissible than ad hoc interventions.


Behind a veil of ignorance just about everyone might support regulations that restrict freedom to a minor extent in order to protect vulnerable people whose judgement is obviously impaired. But in the real world it is difficult to frame such regulations to achieve the right balance. For example, in its draft report on gambling the Australian Productivity Commission has recently published draft recommendations that the maximum bet limit on most gaming machines should be set at one dollar and the maximum amount of cash allowed to be inserted into a gaming machine at one time should be $20. While I claim no expertise in this area I think such limits could significantly inconvenience gamblers who want to minimize the time they spend playing mind-numbing machines, without doing much to protect problem gamblers. No matter how low the limits are set, they will not be low enough to prevent some vulnerable people from harming themselves.


This is true of all forms of regulation designed to protect vulnerable people from making bad choices. The rule that is good for all – the rule that nearly everyone would agree to behind a veil of ignorance about their own particular interests and vulnerabilities – will not be good for everyone. We should not expect the rules of a good society to be good for everyone.

Why is it wrong to coerce people for their own good?

In his recent book, “What is good and why”, Richard Kraut argues that pure antipaternalism is in a weak position because it cannot say why it is wrong to coerce someone to prevent him from doing himself harm. I think there is a very good reason why coercion is wrong under such circumstances, but first I want to quote some passages that I agree with.


I particularly like the following passages that seem to me to capture the developmental approach to well-being presented in the book:
“For human beings, no less that other living things, it is always good to flourish; and if a human being is flourishing in all ways, both physical and psychological, he is doing very well indeed” (p. 133).

“Speaking in the broadest possible terms, there is one kind of life that is best for all human beings – a life of flourishing, one that follows a pattern of psychological and physical growth filled with enjoyment. But it is no less true that the concrete realization of such a pattern differs enormously from one person to another” (p. 140).


Having recognized the importance of individual differences, it is hardly surprising that Kraut is quite positive about the value of autonomy to human flourishing: “Since our well-being consists in the exercise of our powers, and among these powers are those involved in reasoned choice, it is bad for us when matters that we can decide about, on our own, and take pleasure in controlling are taken out of our control” (p. 197). In the end, however, his endorsement of autonomy is qualified: “Important as it is, autonomy is only one good among many, and its value must not be exaggerated” (p. 201). Kraut suggests that since people often make poor choices about matters such as marriage partners we can’t be dogmatic that institutions such as arranged marriages are never good for people.


It seems to me that the problem here is that the author’s discussion of autonomy places too much emphasis on exercising the powers to make choices rather than on self-direction and responsibility. We do not harm our chances of flourishing by seeking advice in order to augment our limited capacity for reasoned choice when making important decisions. But a person can hardly be said to be fully flourishing if important personal decisions are taken out of her control, so that she does not bear responsibility for them.


This brings me to antipaternalism. Kraut writes: “There is no merit in the general idea that we should all be allowed to do whatever we choose. So why suppose that there is some merit in the idea that an adult should not be coerced, when the grounds for doing so appeal solely to his well-being? Why is that, in principle, never a good enough reason for coercion? Pure antipaternalism cannot advert to the bad consequences that would occur were this the only basis for bypassing someone’s will. It must say instead that this is simply wrong, but it cannot say why it is wrong” (p. 237).


In my view it is wrong to coerce a person to prevent him from doing himself harm simply because this is inconsistent with living in peace with him. In a good society coercion would be strictly limited to situations where it is necessary to prevent the actions of different individuals from interfering with each other. As I argued in my last post, if we perceive living in peace to be a necessary condition for a good society then we must accept the primacy of liberty.

Are the institutions of a "good society" the same as those of the "great society"?

In my last post I suggested that nearly everyone would agree that a good society has the following characteristics:
· institutions that enable its members to live in peace;
· institutions that provide opportunities for members to flourish; and
· institutions that provide members with security against various threats to flourishing e.g. foreign military threats and economic misfortune.

There is substantial overlap between the institutions of a good society and the institutions of the “great society” or “open society”, as discussed by Friedrich Hayek.

Hayek emphasized that “only the observance of common rules makes the peaceful existence of individuals in society possible” (LLL, I: 72). He argued that the aim of the rules of just conduct is to define “the protected sphere” of each person in order to prevent, as much as possible, “the actions of different individuals from interfering with each other” (LLL, I: 108). He observed: “The Great Society arose through the discovery that men can live together in peace and mutually benefiting each other without agreeing on the particular aims which they severally pursue” (LLL, II: 109). Hayek went on to make the point that in the great society we all “contribute not only to the satisfaction of needs of which we do not know, but sometimes even to the achievement of ends of which we would disapprove if we knew about them (LLL, II: 109-10). In the great society we have no way of knowing the purposes for which others will use the goods we supply.

If we perceive living in peace to be a necessary condition for a good society then I think we must accept the primacy of liberty - individual freedom and rules that determine the boundaries of the domains of freedom (the protected spheres of each person) are necessary conditions of a good society.

The implications of the primacy of liberty might be more profound than they appear at first sight. For example, a society in which the majority of people flourish could hardly be viewed as a good society if it has laws that cause individuals to be denied liberty if they pursue lifestyles that are offensive to the majority, even though those individuals have done nothing to infringe the protected spheres of other people. The majority might argue, perhaps with good reason, that the individuals concerned would have a better chance of flourishing if they were put in jail, but this does not justify the use of force to make them change their lifestyles.

Other aspects of the relationships between particular sets of institutions and opportunities for human flourishing and security against threats to flourishing seem to be of a more empirical nature. I would argue, for example, that high levels of economic freedom tend to provide greater opportunities for human flourishing, but that is a testable hypothesis. Some relevant discussion is here. Similarly, I would argue that governments have an important role in providing members of society with security, but the extent to which such a role might be warranted involves empirical questions.

The institutions of a good society may differ from those of the great society in relation to personal income security. Hayek argued that the provision of some kind of welfare safety net was not only “a wholly legitimate protection against a common risk to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the small group into which he was born” (LLL, III: 55). He recognized, however, that national safety nets that would be higher in wealthier countries would necessitate restrictions on migration. In my view such considerations may make it necessary for the institutions of a good society – one that its good for its members - to depart to some degree from the liberal principles of the great society.

What are the characteristics of a good society?

In my last post, (Is there such a thing as a good society?) I suggested that a good society would have good institutions – norms and laws that are good for its members.

In thinking about the characteristics of a good society different people tend to emphasise different things that they consider to be important e.g. egalitarianism, personal freedom, moral values and spirituality. Rather than just agreeing to differ I think it might be useful to try to identify some characteristics of a good society that nearly everyone would agree to be important. Then it would be possible to consider what evidence might be available about the nature of the institutions that would foster those characteristics. This might enable us to develop a view about the nature of the institutions of a good society that would be widely accepted.

So, what are the characteristics of a good society? First, as I suggested in my last post, the most important characteristic of a good society is a set of institutions that enable its members to live together in peace. This entails an absence of major threats to persons or property such as those associated with civil war, high levels of corruption and absence of rule of law. The institutions should also prevent use of the coercive powers of the state by despots or influential interest groups to enrich themselves at the expense of others or to restrict the freedom of others to choose how they will live their lives. Institutions that promote the peaceful co-existence of individuals and groups with differing interests and values are obviously a necessary condition for human flourishing.

Second, nearly everyone would agree that a good society would provide its members with opportunities to flourish – to have more of the things that are good for humans to have. This would include opportunities to live long and healthy lives, economic opportunities, opportunities for educational and cultural pursuits, opportunities to make important decisions affecting themselves and their families and opportunities to participate in political processes.

Why focus on opportunities rather than outcomes? Good institutions can make it possible for humans to flourish but humans can’t be made to flourish – for much the same reasons as you can lead a horse to water but can’t make it drink. Human flourishing is an inherently self-directed process. The best we can hope for is a set of institutions that will maximize the probability that any individual chosen at random will be a flourishing individual.

Third, I think there would be widespread agreement that a good society would provide its members with a degree of security against potential threats to individual flourishing. For example it would endeavour to maintain good foreign relations and provide national defence capability sufficient to deter foreign aggression; it would maintain safeguards against government corruption and misuse of the coercive powers of the state (e.g. processes that make it difficult for narrow interest groups to acquire or maintain disproportionate influence in policy-making processes and processes for removal of governments that do not have popular support); it would maintain appropriate machinery to prevent or deal with environmental disasters; it would prevent “the tragedy of the commons” by maintaining appropriate institutions for ownership, pricing and use of natural resources; and it would provide members with a degree of personal economic security against misfortunes such as accidents, ill-health and unemployment.

What evidence do we have about the institutions that tend to foster these characteristics of a good society? An attempt to answer that question will be left to a later post.

Postscript 1:
The best place to look for further discussion by me of the concept of a good society is Chapter 6 of my book Free to Flourish, which is instantly available for a very modest price. 

Postscript 2:

In March 2024, I decided that my view that peacefulness is a characteristic of a good society does not actually depend on the degree of support for that view in any society. Please see: Why should peacefulness be viewed as a characteristic of a good society?

Is there such a thing as a good society?

Margaret Thatcher famously said that there is no such thing as society. What she was actually reported as saying was that some people "are casting their problems at society. And, you know, there's no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbours."

I think that Mrs Thatcher probably meant that human societies consist of nothing more than individual humans and the relationships between them. Society is not some kind of magic pudding that has an existence that is separate from the individuals that comprise it.

Human societies are characterized by patterns of relationships among individuals who share distinctive institutions. It seems reasonable to suppose that a good society would have good institutions.

Good for whom? If our focus is on humans, there are two possible answers: those outside the society and those within it. It might make sense to think of a good society as one that acts in ways that benefit people outside it, for example by fostering peaceful relations and trade. But it seems more relevant to focus on the way the culture and institutions affect the lives of those within the society and the quality of their relationships with one another.

What are the characteristics of a society that is good for the people who live within it? Different views have been expressed. For example, John Cruddas and Andrea Nahles write: “The good society is about solidarity and social justice. Solidarity creates trust, which in turn provides the foundation of individual freedom. Freedom grows out of feelings of safety, a sense of belonging, and the experience of esteem and respect.”

The main problem I have with this approach is that social justice tends to be a divisive concept. Even if there is widespread agreement that a lot of people deserve higher incomes and better health care and education etc than they obtain at present, the people who would have to pay higher taxes to make this possible through government intervention often feel, with some justification, that they deserve to keep the incomes they have earned. Policies to achieve social justice tend to increase distributional conflict.

Some authors suggest that the concept of a good society is inherently subjective. For example, in attempting to provide an answer to the question of what is a good society Lyndsay Connors writes: “Our answers to this question will always draw upon our personal values and describe the kind of society in which we could feel a sense of well-being.”

The personal values of Walter Lippmann, the famous journalist who wrote a book entitled “The Good Society” in 1937, are evident in his perception of the good society. Lippmann saw the good society as being synonymous with “the liberal, democratic way of life at its best” (“Essays in the Public Philosophy”, 1955, p.96). He also wrote: “The ideals of the good life and of the good society fall far short of perfection, and in speaking of them we must not use superlatives. They are worldly ideals, which raise no expectations about the highest good. Quite the contrary. They are concerned with the best that is possible among mortal and finite, diverse and conflicting men. Thus the ideals of freedom, justice, representation, consent, law, are of the earth, earthy. They are for men who are still (as Saint Paul says in Timothy I, 9-10) under the law. (op cit, p. 142-3).

However, it seems to me that there are objective characteristics of a good society, that nearly everyone would agree on. The most important characteristic of a good society – one that is good for the people living in it – is that the institutions of the society should enable those people to live in peace. In an earlier post I have discussed Friedrich Hayek’s view of what living in peace entails. In broad terms, it requires the ideals that Walter Lippmann identified.