David Cameron proposes monitoring happiness as well as GDP, but it will be a struggle to wean Britain off the idea that consumption brings joy
At some point during the past few weeks, you have probably heard someone say that Christmas is a peak time for suicides. Christmas Day, when everybody else is supposed to be having fun, is the day when those who are lonely, hard-up and depressed decide to end it all.
The relationship between suicide and Christmas sounds as if it ought to be right. Dominated by the advertising industry, Christmas has become so stripped of its original meaning that it is hardly surprising that large numbers of people feel alienated by the orgy of materialism going on around them. If there is no more to life than overeating and conspicuous consumption, then what's the point of it all?
The fact is, though, that the idea of a sharp spike in suicides at Christmas is a myth: statistical evidence tends to suggest the opposite ? not just for 25 December itself but for the month as a whole. Despite all the hand-wringing about over-commercialisation, people like Christmas. It cheers them up. Generally, it makes them happier rather than sadder.
There are some obvious reasons why this should be. Households open their doors to relatives, friends and sometimes distant acquaintances because they don't like to think of other people being sad at Christmas. They invite the neighbours they haven't spoken to for the past 12 months in for a drink. They brave the elements to visit aged relatives.
Far from being the recipe for family conflict, these gatherings provide support for the isolated and the vulnerable. At a more formal level, there is an awareness that support needs to be provided in terms of food and shelter for those who lack resources of their own.
Giving rewards
Individuals are also generous with their money. They buy presents for the people they love, even when they can't really afford it. If ever there was a time of year when the notion of rational economic man comes a cropper it is December, because the textbooks say that we would maximise our utility by spending as little as possible on others while receiving lavish presents ourselves.Real life is not like that, however. People get as much pleasure ? in many cases even more pleasure ? from giving a present to someone else as they do from getting a present back in return. While it is no doubt true that much last-minute Christmas shopping is about grabbing a pack of socks or the latest Lady Gaga CD, it is also the case that many people put real effort into seeking out a gift they hope another will enjoy. Having said all that, of course, the warm glow will be transitory for those who become financially incontinent at Christmas. The data shows that the suicide rate picks up in January, when the seasonal hospitality ends, the credit card bills start to roll in and the high streets empty of shoppers.
Figures released by Eurostat last week showed just how much Britons love spending. While incomes per head in the UK are 12% above the European Union average, consumption per head is 25% higher, second only to Luxembourg.
From an economic perspective, this is a big problem. It helps to explain the UK's low savings ratio, high levels of household debt and chronic balance of payments deficit. As a nation we spend more than we earn, so imports are higher than exports. The City sucks in hot money from the rest of the world to allow us to live beyond our means.
All of this creates something of a political headache for the government, because the signs are that the next couple of years are going to be tough for consumers. Incomes are already rising more slowly than prices, and that trend will be amplified when VAT goes up to 20% in the new year. Both the Treasury and the Bank of England believe that Britain is long overdue a period when consumer spending rises more slowly than national output, allowing us to rebalance the economy by importing less and exporting more.
Why should that be a problem if, as many economists say, we are no happier now than we were half a century ago when consumption was a lot lower?
While that may well be true, lower levels of consumption tend to be associated with higher unemployment and greater strains on relationships, both of which are linked to greater levels of unhappiness. Rising consumption levels may make us no happier as a nation, but that doesn't mean we are necessarily eager to embrace the new frugality where we make less go further and ration our visits to the shops.
Fortunately, we should be able to put matters to the test, because David Cameron has proposed the idea of the Office for National Statistics launching a happiness index, an attempt to broaden out measurement of wellbeing from narrow concepts such as growth rates or GDP per head.
This initiative deserved better than the blast of cynicism that greeted it. It makes sense to look at the impact that factors such as rising crime, higher levels of inequality and the state of the environment have on our wellbeing, and it is time we stopped making a fetish of GDP per head.
Belt-tightening
If, as the prime minister says, there is more to life than money, we should welcome a bit of belt-tightening. We should spend less and save more. We should have cut back sharply on the Christmas spending budget this year as a precaution against rising taxes, higher unemployment and spending cuts. Get right down to it and we need to be a bit more like Scrooge or Silas Marner.This, though, is not going to happen, at least not without a heck of a lot of resistance. You can learn more about the way people really think and behave by reading Dickens or George Eliot than you can from ploughing through endless tracts analysing the marginal utility of consumers. Far from being admired for their prudence, Scrooge and Marner are two of the most pitied characters in English literature. The clear lesson from Christmas is that we enjoy spending money. We would rather be considered spendthrifts than misers.
Allen Stanford Consumer affairs Roy Hodgson Mergers and acquisitions Banking Digital media
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