Measuring Quality of Life

Though the evidences of discontent are perhaps not so conspicuous now as a couple of years ago, there is still reason to wonder why the unprecedentedly high incomes of present-day Americans coexist with so many manifestations of discontent and despair. Some dissatisfaction with the social order, and with leadership in institutions of all kinds, is evident on all sides. The 1960s were a period when real incomes grew unusually rapidly, yet by the end of that decade there was more evidence of dissatisfaction with the social order—not only government, but universities and other institutions and authorities—than there had been for some time. When one looks across societies, it is by no means obvious that Americans are more contented with their lot than Europeans, though there can be no doubt that they have higher real incomes. When one looks at the sweep of history, it is by no means clear that periods of economic growth were the most quiescent politically; they were often periods of protest and even of violence. A glance at suicide rates, at the proportion of the population whose level of satisfaction is so low that life no longer seems worth living, suggests if anything that the higher-income countries have higher suicide rates than the poor ones. Nor does the number who are unable to cope with life or who suffer mental illness show any tendency to diminish as incomes increase (though, tranquilizers have permitted a reduction in the population in asylums).

If we cannot be at all sure that rapid economic growth will diminish discontent, there is a reason to ask: What really happens when the economy grows? Does it make everyone happier or better off? Or is it associated with subtle forces which reduce well-being in some dimensions just as it improves it in others? Do the obvious manifestations of discontent in rapidly growing and high-income societies simply misrepresent a general increase in contentment, or is there at least a part of the population that is worse off in some sense than it would have been had the economic growth not taken place? Even those who believe, as I do, that economic growth is on balance highly desirable, should want to understand why it fails to diminish proportionately, if at all, the evidence of discontent and social pathology.

Any effort to look in an integrated way at economic growth and its relation to contentment and discontent must take account of the fact that income statistics tend to include most of the things that are readily brought under the "measuring rod of money" and to leave out most things that are not. Economics was in fact defined by Alfred Marshall as the study of that which is readily measured by money, so that the economist in particular must be concerned about what it is about a phenomenon or good that makes it readily so measurable.

Some people suppose that what keeps a good from being measured monetarily is that it is "priceless." But only rarely are people willing to give up "everything" for a given good or purpose. And if one good were literally priceless for a person, a second good could not possibly be, because the person might then be confronted with a situation in which he could not have more of the one good without less of the other, and the trade-off would indicate that he put a finite price on at least one of the goods.

Normally, it is not pricelessness that keeps a good from being measured in monetary terms, but rather the fact that an individual cannot take more or less of it as he wishes. If an individual takes more or less of some good, he reveals, by what he has to give up (e.g., money), how much it is worth to him. We know how much apples and oranges are worth to a shopper because we know what he has to give up in money (and thus other goods) to get another dozen.

Many things, and some that are precious to many people, are not available to the individual in greater or lesser quantities. Family and friendship relations, for example, do not exist at all if there is only a minimal level of interaction. A man cannot, for example, have "half of a wife." He could of course have a casual or intermittent relationship with a woman, but that would be a different thing—in the economist's language, a different "good." Similarly, an acquaintance is not a half or a tenth of a friend, but something qualitatively different. When a relationship involves continuity and a substantial commitment, people do not regularly reveal how much a given relationship is worth to them. An individual who obtains a divorce reveals that he or she finds a given relationship is, on balance, not worth the cost or sacrifice it entails; but the person who does not obtain a divorce may place an extraordinary value on the relationship or may be nearly indifferent. In either case, his behavior does not reveal the "price" he puts on the relationship. It is not possible to take a little more or less, and thereby to reveal what one would or would not give up for it.

If the outside observer cannot know what price people put on the satisfactions or goods their families, friendships, and social groups produce, we cannot readily tell whether there is a deterioration (or even absence of improvement) in the satisfactions people get from familial and personal interactions that could make them, on balance, less contented after a period of economic growth than before. The tangible goods we buy in the stores are available in even greater quantities. What of the more abstract goods we obtain from our families and friends?

It seems probable that most people value at least reasonably stable or relatively continuous personal and group relationships. Certainly there is evidence that some degree of stability in the personal environment is necessary for children. What is the effect of economic growth on the continuity of personal relationships?

Economic growth requires technological change or capital accumulation. It requires doing things in new ways. It means reconstituting work groups, often in new locations. It requires incentives that enable some to rise in the social order and cause others to fall. In modern times, it often requires huge and therefore impersonal organizations and workplaces.

The change, the social and geographical mobility, that economic growth involves may therefore to some degree lessen the continuity of personal relationships. As a society, we may purchase the goods we buy in the marketplace partly with the goods produced by stable personal relationships. This does not mean that economic growth is bad, as some have thoughtlessly suggested. It means rather that it may have a social as well as an environmental cost. This is a cost of which we need to be aware, even if it cannot readily be brought under the measuring rod of money.