The Economics of Happiness: a film review

A new film The Economics of Happiness makes an eloquent case for a more localised economic system that forgoes ceaseless increases in GDP and delivers higher levels of wellbeing and even happiness. However, its failure to engage with defenders of GDP, big business and globalisation leave the viewer with a sense of unbalance.
James Murray
10 February 2011

If there is one thing economists agree on, it is that GDP is a pretty terrible measure of progress. As any undergraduate can tell you, the crude measure of all the transactions in an economy makes no judgment on whether or not economic activity is in the social interest. Wars of aggression, oil spills, debt-fuelled consumer bubbles and mass prison-building programmes all lead to spikes in GDP while being largely detrimental to society as a whole.

However, if economists agree that GDP is rubbish, they quickly divide into those who believe that, like Churchill's democracy, GDP is the worst form of economic progress except for all the others that have been tried, and those who believe the future of civilisation depends on our ability to develop a more effective measure of economic progress.

Helena Norberg-Hodge, Steven Gorelick and John Page, makers of the new film The Economics of Happiness, are very much in the latter camp and in their taut, 67-minute documentary, which premiered in London last night, they eloquently make the case for a more localised economic system that, while forgoing ceaseless increases in GDP, delivers higher levels of wellbeing and even happiness.

The film's central argument is undermined by the recitation of several left-wing anti-globalisation tropes that would have seemed tired 20 years ago and a visual style that has more in common with Open University broadcasts than the best documentaries of recent years. But its central diagnosis of the way in which globalisation lies at the root of the financial, environmental and psychological crises modern societies face is tellingly prescient. As is the argument that a new economic system based on more localised business models will be required if we are to successfully tackle climate change and address the epidemic of depression that has swept across Western societies over the past few decades.

The first half of the film is given over to an analysis of the absurdities of globalisation and the way in which it has allowed power to concentrate in the hands of under-regulated multinational firms that use advertising to fuel dissatisfaction and sever long-standing community ties.

Much of the criticism of globalisation feels under-cooked and the film fails to engage on any level with the counter-arguments, offering not a single talking head willing to point to some of the achievements consumer capitalism has delivered. Moreover, there is no real explanation as to why globalisation has proven such an attractive and resilient economic model for billions of people around the world, beyond the accusation that it is all the fault of advertising. Modern adverts are powerful devices and have plenty to answer for, but they cannot be the sole reason that virtually every country in the world has signed up to an economic model which, according to the film's makers, is not in their interests.

That said, the film contains some shocking revelations, such as the US annual survey which found the proportion of Americans describing themselves as happy peaked in 1956, or the table of imported and exported staple goods which shows that the UK exports basically the same amount of butter as it imports as part of a Kafka-esque cycle of international trade. As Conservative MP Zac Goldsmith explains in the film, we have bought the myth of multinationals' economies of scale and ignored the enormous levels of waste that result from these monoliths.

Similarly, it was shocking to hear of the ways in which the past two decades have seen small businesses lumbered with ever more red tape while multinationals have orchestrated a staggering roll-back of regulation and taxation, particularly on the day an article by George Monbiot zipped around the Twitter-sphere detailing how the coalition is pursuing plans to turn the UK into the world's largest corporate tax haven.

However, the film gets really interesting in its attempts to map out a solution to the inter-connected challenges globalisation presents in the form of more localised economic networks. Many of the ideas explored, such as transition towns, decentralised energy generation and community currencies will be familiar to anyone with an interest in low-carbon economics, but the central premise that deep cuts in carbon emissions can only be achieved through a drastic shortening of global supply chains still resonates.

There is also a powerful section towards the end where people from the remote Himalayan region of Ladakh are taken on a "reality tour" in the UK in an attempt to show them that the Western lifestyle the developing world is now pursuing is not all wealth in luxury – it is also landfill sites and residential homes full of isolated pensioners. You are left with the feeling that we could all do with such a tour that reveals how our economic model is resulting in painful social and ecological consequences.

However, the film falls down in its complete excoriation of globalisation and big business. For example, it is hard to imagine that the advanced solar cells and aerodynamic wind turbines the film rightly insists are essential to build a cleaner decentralised energy system can be delivered without global supply chains and the concentration of the best and the brightest engineers and scientists from around the world. Equally, old-school green criticism of nuclear power and GM crops loses much of its power through the film makers' failure to engage with those scientists who believe the exact opposite.

The Economics of Happiness is right to argue for a better measure of economic progress, just as it is right to criticise the worst excesses of globalisation, and make the case for a more localised economic model. However, it fails to articulate how it might be possible to combine the best of both worlds – delivering localised low-carbon networks that still draw on the technological innovation and material comforts delivered by globalisation. Then again, you can't criticise the film for failing to find the answer to all the world's woes, as it is certainly not alone in that.

This piece was originally published on

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