When it comes to happiness, myths abound. For centuries we have hotly debated what makes a good life, where satisfaction ultimately comes from and fundamentally how we can be happy. The determination to ask what leads to human flourishing is perhaps what sets apart civilised countries from uncivilised ones. It is only recently, though, that we have come up with anything as preposterous as the idea that the government can and should survey us to work out how to make us happy.
The Institute of Economic Affairs today publishes a watershed work on wellbeing economics. In it, among other things, we critique two of the most prevalent myths on happiness. ...and the Pursuit of Happiness: wellbeing and the Role of Government  attacks the "Easterlin Paradox" which suggests that an increase in absolute income does not correspond to a rise in happiness and also one of the perceived implications of the recent work The Spirit Level which, it is widely claimed, argues there is a link between happiness and equality in a society.
Crucially, new evidence finds that not only is there a significant relationship between people getting richer and getting happier but also that across the world it is clear that richer societies are happier societies. At the same time, there is remarkably little relationship between happiness and inequality.
In addition to this the publication shows a clear relationship between a smaller state and happiness. Amazingly, where governments spend a lot, people’s levels of happiness decrease – interestingly this holds “regardless of how effective government bureaucracy is or how democratic a country is”. This study shows that “increasing government spending by about a third... would cause a direct reduction in happiness of roughly 5-6%”.
Read the rest of the article on the Daily Telegraph website .