Is there much difference between feeling in control of your destiny and feeling satisfied with life?

In an earlier post about inner freedom (here) I mentioned that I would look further at how closely inner freedom is correlated with life satisfaction.

One of the questions that people have been asked in the world values survey is “how much freedom of choice and control you feel you have over the way your life turns out”. They are asked to indicated this on a scale where 1 means “none at all” and 10 means “a great deal”.

In the following scatter diagram each point shows for an individual country the proportion of the population who feel they have a great deal of this inner freedom and the proportion of the population who feel satisfied with life as a whole. (Data are for 72 countries for the year 2000 and have been sourced from “Human Beliefs and Values” by Ronald Inglehart et al.)




The chart shows that there is correlation at a country level between life satisfaction and inner freedom. Countries in which a high proportion of the population feel satisfied with life as a whole tend to be the same as those in which a high proportion of the population feel a great deal of inner freedom. The correlation is obviously far from perfect, however. The percentages feeling a great deal of inner freedom in Italy, Belgium and the Netherlands, for example, were lower than would be expected on the basis of percentages feeling satisfied with life. On the other hand, the percentages feeling a great deal of inner freedom in Venezuela and Taiwan, for example, were higher than would be expected on the basis of percentages feeling satisfied with life.

I have conducted a regression analysis in order to see whether the difference between inner freedom and life satisfaction is related to various values or beliefs. The dependent variable was the percentage who feel a great deal of inner freedom and the explanatory variables were: the percentage who feel satisfied with life; the percentage who say competition is good (it stimulates people to work hard and develop new ideas); the percentage who place high importance on leisure; the percentage who say it would be good if less importance is placed on money; and the percentage who say that people should take more responsibility to provide for themselves.

Apart from life satisfaction the only variable for which the estimated coefficient was significantly different from zero was the competition variable. That result seems to me to make sense. If a high proportion of a population feel that they have a great deal of choice and control over the way their lives turn out then it stands to reason that they are more likely to feel that competition is a good thing.

Are we rational or predictably irrational?

If you ask Tim Harford, author of “The Logic of Life” (2008), he would say that we can generally be expected to make rational decisions. According to Harford, people do the things they do largely as a result of rational choices.

If you ask Dan Ariely, author of “Predictably Irrational” (2008), he would say that we are generally far less rational than we think we are. According to Ariely, while we like to think of ourselves as sitting in the driver’s seat, with ultimate control over the decisions we make, we are actually pawns in a game whose forces we largely fail to comprehend. We tend to make the same mistakes over and over because of the basic wiring of our brains.

After reading these books I felt that both authors made some good points. Is it possible that both could be right?

Harford adopts the time-honoured economic method of seeking to explain how various phenomena could be a consequence of rational individual behaviour. He refers to research studies explaining a wide variety of things in these terms that are often thought of as symptoms of irrationality. The list includes crime, addictions, divorce, provision of astronomical remuneration to some chief executives, racial segregation and the growth of large cities.

Ariely approaches the subject as a behavioral economist. His research methodology is more akin to experimental psychology than economics. He uses his experiments to illustrate that human behavior is influenced by a list of factors other than rational choice. This list includes price anchors, the power of gifts, social norms, the influence of arousal, the problem of procrastination, the tendency to over-value the things we own, the effect of expectations and the influence of ethical codes on integrity.

It seems to me to be possible for both Harford and Ariely to be right because they use different definitions of rationality. Harford’s definition of rationality is simple: rational people respond to incentives (p 8). Ariely views rationality as involving much more. In his terms, to be rational implies “that we know all the pertinent information about our decisions, that we can calculate the value of the different options we face, and that we are cognitively unhindered in weighing the ramifications of each potential choice” (p 239). Rationality involves making “logical and sensible decisions” and “if we make a wrong decision from time to time we will quickly learn from our mistakes (p 239).

That might make it possible for Harford to say that a person’s behaviour in some situation was rational whereas Ariely could say that it was predicably irrational. There is not a great deal of overlap between the things that Harford and Ariely have written about, but what they have to say about self-control in relation to spending and saving decisions can be used to illustrate this point. Harford would argue that when we have self-control problems the warring parties within us are both rational - it is just that one party is impatient and the other party is willing to wait for larger rewards in the future (pp 56 -66). Ariely implies that a person with such problems is having difficulty behaving rationally (p 122-3). Both acknowledge the potential to resolve problems by making strategic decisions e.g. placing your credit card in a glass of water in the freezer, so that you have to wait for the ice to thaw before you can use it.

The definition of rationality may have some importance to the extent that it is used as an anchor in public discussion. When we define rationality so broadly that foolish behaviour can be rational, some foolish people may think that this implies approval. Similarly, when we define rationality too narrowly some foolish people may think that the existence of irrational behaviour by individuals provides an open and shut case for more government regulation.

While adopting a broad definition of rationality, Tim Harford acknowledges that individual rationality can produce undesirable social outcomes. For the most part Dan Ariely suggests that the best way for individuals to deal with their irrational tendencies is to be aware of them. Sometimes, however, he slides quickly (too quickly in my view) from identifying irrationality to suggestions for government intervention.

Freedom and Flourishing: Which questions come first?

As I noted in the title of this blog my aim here is to explore the links between freedom (liberty) and human flourishing.

I decided when I started this blog about seven months ago that the best way to ensure that I actually used it to undertake this exploration of links between freedom and flourishing would be to make each item in the blog an attempt to answer a relevant question.

It seemed to me that the exploration could usefully be thought of as a sequence of questions. As each question was explored, that would raise further questions, which would, in turn, raise further questions, and so on.

However, the existence of a sequence of questions is not obvious when you look at the front page of the blog, even though I think I have stuck fairly well to my original intentions. As with any other blog, what you see on the front page of this blog is like what you would see opening a book at random. You might see some topics at the side, but trying to follow those is like looking at the index at the back of the book and then reading entries that look interesting.

Dipping into a blog in this way can be a useful thing to do to get an idea of what it is about. But some readers may prefer to read an introduction.

What I attempt to do below is to give readers the benefit of my thinking about the order in which questions should be considered.

Where to begin?

Many people who come to this blog will view happiness as the ultimate goal of life. If that applies to you, you might like to begin by considering how human flourishing relates to happiness.

• What does flourishing mean? Here
  However, you might have come here with the view that there is nothing more important than individual freedom. If so, you might ask:
• Why consider the links between freedom and flourishing? Here

Where next? In my view the question most central to this blog is:

• Is freedom a necessary condition for human flourishing? Here

From there it seems to me that it would make sense to consider a set of questions related to the links between freedom and flourishing.

• What do objective measures of freedom and flourishing tell us? Here.
• What do subjective measures tell us about human flourishing and about the links between freedom and flourishing? Here.
• Do people want to be involved in political decision-making? Here
• How can we categorize the arguments against freedom? Here

Now, each of those questions raise a series of further questions.

1. Objective measures of flourishing. How good is income as a measure of human flourishing? See particularly:

• Is anything left of the Easterlin paradox? Here
• How does probability of happiness vary with income levels? Here
• What should we make of survey results showing no increase in happiness as income rises? Here

2. Subjective aspects of flourishing.

• How well do happiness surveys measure human flourishing? Here
• Does inner freedom link liberty with flourishing? Here
• How important is autonomy? Here
• What is the best book about pursuit of happiness and good government? Here
• Are some goals better than others? Here

3. Political institutions.

• What does living in peace entail? Here
• How would you know if you lived in the best of all possible worlds? Here
• Can government be bound? Here
• Can government be restrained by transparency requirements? Here

4. The arguments for restricting freedom

• What is the role of individual responsibility? Here
• How should needy people be helped? Here
• Does a welfare state strengthen the social fabric? Here
• Why not let people opt out of the welfare state? Here

This sequence of questions is not a complete listing of the topics covered in the blog. Hopefully it covers enough ground to provide readers with a useful introduction.

Does paying tax make us happy?

I know that just about everyone who has read this far will think this post has to be about masochism, or schadenfreude. What is the definition of masochism? Masochism is the pleasure that some people feel when they pay their taxes. What is the definition of schadenfreude? Schadenfreude is the pleasure that some people feel when others have to pay more tax than themselves.

Actually, that is all I intend to write about masochism and schadenfreude in this post. The rest of the post is about the findings of some scientific research that suggests that paying tax can stimulate the same brain regions as are fired when basic needs such as food and pleasures are satisfied (B Harbaugh, U Mayr and D Burghart, ‘Neural responses to taxation and voluntary giving reveal motives for charitable donations’, Science, 2007).

In the experiment 19 women were given $100 and then their brains were scanned as they watched some of their money go to a food bank (a local charity) through mandatory taxation and as they made choices about whether to give more money voluntarily or to keep it for themselves. When the participants saw their money going to the food bank this fired off the same areas of their brains that respond to basic rewards like sweets, nutrients or positive social contact – indicating that they felt good, even when they had no choice about giving. The activation of these brain areas was even larger when the participants gave the money voluntarily.

One of the authors of the study, Ulrich Mayer, claims that the results show that people are to varying degrees pure altruists. Arguably, however, the results show that giving provides emotional benefits to the giver. When they give anonymously some people may give solely for the benefit of others, but most would do it for the warm inner glow.

I am not particularly surprised by the results of this study. People like to see others being helped when they fall on hard times because they know that they would appreciate help themselves in similar circumstances. I imagine that, if choosing behind a veil of ignorance about their own income, the vast majority would choose to live in a society in which those unable to support themselves were helped by others - and would be more than willing to pay an income-related insurance premium for this purpose as the price of admission.

At the same time, however, we often have good reasons to think of redistributive taxation as more akin to extortion than payment of an insurance premium. A substantial proportion of redistribution occurs because the recipients of transfers have the political muscle to have the coercive powers of the state used for their benefit. Paying tax could not be expected to make people happy under those circumstances.

It seems to me that the way this experiment has been structured tends to favour the result obtained.
First, I wonder whether inclusion of men among participants would make any difference to the results. For example, men might be less sympathetic than women to the plight of needy people.
Second, I wonder whether it would make any difference if participants were required to work for the initial allocation of funds. People might have less resistance to compulsory sharing of windfalls than money that they have worked to obtain.
Finally, I wonder what difference it would make if people saw their money being used by welfare recipients to fund such things as purchase of alcohol or gambling. It seems to me that a person would have to be a masochist to feel happy about paying tax under such circumstances.

I’m sorry! I forgot I wasn’t going to mention masochism again in this post.