Wednesday, October 10, 2007

Social Happiness and Government Policies

Many economists find the concept of "social happiness" too difficult. This is especially true of those who subscribe to economic rationalism, where the main argument is for less government intervention.

John Howard would like to think of himself as an economic rationalist. He has expressed the view "let the market decide", most recently about a carbon emissions trading scheme. That is, if business thinks there's money to be made, let them do it. He certainly did not want his government to interfere and set binding emissions targets. At the other end of the spectrum, he has been most happy for government intervention when it is to his own political advantage: the takeover of Mersey Hospital in Tasmania is an example. So is the growth of "public servants" and "media advisers" for government self-promotion. Kevin Rudd might be a little less "dry" in his economic thinking, but he, too, is prone to promised intervention if it suits.

"Social happiness" is sometimes expressed as the "sum of all individuals' happiness". But this is difficult to measure. Are people happy because they have another tax-cut? Are they happy knowing that the collective money could be used for public good? Individual people know that Public utilities (public hospitals, other health facilities, public schools, national highways) are essential, but are "happy" to take the money themselves ... until they need to use the public facilities. Then they ask "why isn't the government funding this properly?"

Government policies at State and Federal levels have been geared to individualism and privatism for too long. It is time to better fund our Public utilities for public good, rather than political expediency.