“National happiness” is more difficult to measure than “national income”. But should governments seek maximum per capita values for either variable? Austrian-British philosopher Karl Popper did not think so. I agree.
Karl Popper believed that government cannot know what people want (indeed, perhaps we barely know this ourselves). But what it can know – and measure – is human suffering. Hunger, ill health and poverty are things that are straightforward to measure. Popper therefore argued that government should not set itself to the goal of maximising happiness, growth or “utility”, but to the minimisation of suffering, an index where its success or failure could very easily be assessed. Unlike his better-known concept of the “open society”, it is striking that this aspect of Popper’s philosophy has been largely ignored.
Carne Ross, “Hunger, ill health and poverty are simple to measure“, letter to the editor, Financial Times, 7 August 2012.
After Karl Popper (1902-1994) died in the UK, his ashes were transported to his native Vienna and buried next to the body of his wife. Two years ago I visited the grave and snapped a picture, which I posted here.
I can relate to Popper’s comment in the pensions context.
We can fairly easily establish who amongst the old are poor or suffering deprivation. We can also measure fairly easily how successful state interventions might be to alleviate or even fix that. Also which programmes work (at what cost) and which don’t provide value for money. The scale of the state’s involvement will depend on the amount society is prepared to pay. The two drivers here will be the annual amount payable to each old person and the age from which it starts. Income tests should be avoided as they often hurt the people they are intended to help.
It’s not for the state to say what citizens might do about the rest of their retirement wealth needs. That’s for them to decide, including whether to smooth consumption between working and non-working periods.
On those grounds, compulsory private provision and tax breaks have no place. Neither should the state get involved in helping citizens to maintain pre-retirement living standards in the Bismarckian mode. Beyond the objective of alleviating or, preferably, eliminating aged deprivation, everything else is for individuals. Only they can settle the ‘utility’ function that Popper refers to.
All this doesn’t mean the state is uninterested in citizens’ decisions. States can express that interest through information and education programmes but they should keep their hands out of citizens’ pockets.
Thanks for this excellent contribution, Michael.
Your comment reminds me of the remarks of Michael Cullen, New Zealand’s Deputy Prime Minister and Minister of Finance, at the Retirement Commission Symposium in June of 2003:
“I have often said that the ability to retire in a degree of personal comfort, without worry and with dignity, is the least that citizens can expect in a modern, developed economy. I have also said that it is the most they can expect. They cannot expect the state to maintain in retirement the incomes the people became accustomed to during their working lives.”
With subsidies for retirement saving (KiwiSaver), New Zealand sadly is moving away from this philosophy of government.