As I travelled between meetings this week I listened to a recent episode of The Rest Is Money podcast in which Robert Peston and Steph McGovern interviewed Lord Richard Layard. There was much to learn from their 25 minute discussion.
Lord Layard is currently Co-Director of the Community Wellbeing Programme at LSE’s Centre for Economic Performance. As his own website says, he was “one of the first economists to work on happiness”, and over the years his writing and thinking have directly influenced public policy in the UK and beyond.
The podcast demonstrated that, at the age of 90, he remains a forceful intellect whose views are perhaps becoming more rather than less relevant.
Layard believes passionately in the inclusion of measures of wellbeing, as well as more traditional economic metrics such as GDP, when assessing the value of an enterprise or policy. And wellbeing can effectively be paraphrased into happiness.
Developments in psychology over the last 3-4 decades have made it possible to measure happiness, and this in turn has facilitated the research which provides the evidence that feeds much of what Layard advocates.
For example, people who live in broadly more egalitarian societies where children are educated to ask “what can I do for others?”, rather than “how can I help myself?”, tend to be happier.
Similarly, those working in an environment where rewards are based on team rather than individual success also tend to be happier and, importantly, more productive.
And increased productivity is where the touchy-feely rubber of happiness hits the hard economic runway. Layard points to his research showing that investments in mental health give the best “value for money” because mental health, unlike physical health, affects more people of working age.
By returning them to work or improving their mental health in work, productivity can therefore be improved. The same can be applied, he claims, to providing professionally delivered life skills training in schools. Effectively this is mental illness prevention rather than cure.
Layard is keen to stress that competition is central to the economic success of a country, but this should be between companies and not between individuals within companies.
I think the TV show The Apprentice has something to teach us here: its success as entertainment is at least in part based on a group of egomaniac contestants being forced to spend 12 weeks doing their best to masquerade as team players. I can scarcely think of one I would want to darken the doors of George Shippam Financial Planning as an actual apprentice!
But perhaps it is also telling that the host of The Apprentice in the US ended up in a somewhat higher profile role to which he may soon return… And that the US ranks 8th in the world for GDP per capita (source: Worldometer), but 23rd for happiness (source: World Happiness Report 2024)… A country where the over sixties are happier than the young.
And finally, when asked if he was happy himself, Layard sounded briefly bashful…before mentioning tennis and his wife. There’s a lesson there too.