Are you happy? The odds are that if you spend a lot of time pondering this question, you are not. Happiness, like economic growth, is best achieved by not aiming obsessively for it.

This worldly-wise view has recently been challenged by some economists who are sure that happiness can be measured, at least on a comparative basis, and that these measurements provide a basis for policy. This view is based on opinion surveys, which have been belatedly discovered by economists with all the thrill of "the shock of the new". A good summary is provided by two Swiss economists, Bruno Frey and Alois Stutzer.*

But although I welcome the addition of opinion surveys to the all too limited toolbox of applied economics, I still question whether these happiness studies show what they are supposed to. They are normally based on questions such as: "Taking all things together, would you say that you are very happy, pretty happy or not too happy?"

International comparisons produce some weird results. Austria is rated as the least happy western country with an index of 6.51 and Denmark the happiest with an index of 8.16. Nigeria comes out above Austria.

Despite these offbeat examples, reported well-being does vary with income - but only up to a point. People living in poor countries become happier with increasing average per capita income. Within a single developed country, better-off people report themselves as being more satisfied with life than poorer citizens. Nevertheless, among the richer nations, increases in average income contribute little to well-being. Well-being peaked in the US in the late 1960s, despite a large subsequent increase in real incomes.

Some economists have used these results as egalitarian debating points. If, below a certain level, people's well-being reflects their relative position, why not redistribute income so that those in the middle or at the bottom no longer feel such intense "relative deprivation"? As far as I know, no one has demonstrated that the gains to the median citizen from soaking the rich would offset any loss to his or her own self-esteem from levelling up the poor. But as a libertarian I would rule out resentment and malice from policy considerations.

A new result reported by Frey is that federalism and direct democracy contribute to personal happiness. The idea is that people enjoy being able to determine policies directly through referenda and small-scale government. It is hardly surprising that Swiss authors should come to such conclusions, which are based on a cantonal study.

If we take the happiness research seriously, we shall have to go all the way towards Brave New World. This was a novel by Aldous Huxley, published in 1932. His New World differs from Orwell's Nineteen Eighty-four since people are not made to conform by fear of Big Brother. They are conditioned to do so by selective breeding. The population is divided into categories ranging from the alphas, who give the directions, to the epsilons, who do the dirty work. There is also a drug, "soma", to be taken at any sign of waning happiness.

Brave New World is presented as a nightmare. But we need to be careful. The inhabitants are conditioned to enjoy their existence. The problem was previously aired by John Stuart Mill when he said it was better to be Socrates unhappy than a pig happy. I have always had a sneaking sympathy for the pig, so long as he can be bred to live as long as Socrates. Luckily, we do not have that choice.

In all the time that has passed since Huxley's novel appeared, genuine soma pills have not been invented. The hard drugs that some of the affluent young take to bring on a "high" seem in the end to produce squalor, suicides and other tragedies. Huxley himself was ambivalent about soma pills or their equivalent. Throughout his life he was looking for drugs that could bring on delightful feelings without an unfortunate kick-back. He ended up by recommending mescalin. But to the best of my knowledge there are still no happiness drugs devoid of side-effects.

To me, what was conclusive was that the conditioning in Brave New World was neither entirely painless nor completely successful. Small children were given shocks to induce a distaste for flowers and books. And the action of the novel depends on there being alpha individuals incompletely conditioned who looked back fondly to the world of Huxley's time.

There is a different way of looking at happiness, which derives from a book by the English philosopher Gilbert Ryle, The Concept of Mind. The tendency of that book is to reinterpret mental phenomena, which are usually discussed as subjective feelings, in terms of observable behaviour. Ryle does not deal with happiness as such but he does discuss enjoyment, which comes close to it.

He gives an example of a person who enjoys digging in his garden. This is "not to say that he has been both digging and doing or experiencing something else, as a concomitant or effect of the digging; it is to say he dug with his whole heart in his task, i.e. that he has dug, is wanting to dig and not wanting to do anything else". There are not two activities going on side by side: digging; and internal experiences of satisfaction.

The first clue to how happy people are is indeed to look at how they behave and regard their answers to direct questions about their feelings as no more than useful supplements. What then is an alternative policy guide? Quite simply: to maximise the range of opportunities open to each individual. And I see the task of policy largely in negative terms: to remove obstacles to the exercise of individual choice rather than lots of fussy interventions on our behalf.

This article is based on the Templeton lecture at the Institute of Economic Affairs. The full text is available here.

*Happiness and Economics: Princeton University Press