Shooting at the wrong goal

Guest post by Mao Yushi

Over three decades of economic reform, China has witnessed an exponential increase in wealth creation. China is now one of the largest wealth generators in the world – but probably also one of the largest generators of dissatisfaction, considering the recent increase in citizen complaints.

This is curious. Although the gap between rich and poor is still a cause for concern in China, the country has improved the living conditions of its poorest inhabitants. As the World Bank recently pointed out, in recent years China’s poverty-reduction policies have had unexpected success. Uneven distribution of wealth notwithstanding, China is making tremendous progress in the fight against poverty.

However, the fact that Chinese citizens’ sense of well-being is not increasing in line with wealth indicates that society is unstable – and that wealth is not the problem.

I personally believe that the problem lies with the goal we are striving to achieve. We consider wealth acquisition the only target worth pursuing. It is not wrong to make money, as long as the latter is merely regarded as the means to achieve a goal, and not as the goal itself. Nowadays, the work of government functionaries is exclusively assessed on the basis of economic performance, and the central aim of local government is to achieve GDP growth targets.

However, in spite of a rapid increase in wealth, the degree of satisfaction amongst Chinese people is still low. This highlights the fact that wealth does not lead directly to happiness.

The Chinese government has recently set the strategic goal of building a “harmonious society”. But harmony is too vague a notion to be scientific and quantifiable. From an economic perspective, the general pattern of increased wealth that China has followed over the last 30 years perfectly embodies the “Pareto improvement” theory. A “Pareto improvement” occurs when there is a change in the allocation of resources that makes one person better off without making anybody else worse off. For example, imagine an elderly lady who sells one of her chicken’s eggs to a customer who desires to eat it: both agents gain from this exchange, without hurting anyone. This is the advantage of a free market economy.

Similarly, how can a “harmonious society” achieve harmony? Not through the maximisation of wealth, but through the maximisation of happiness. That is, making at least one person happier without making others unhappy. If we popularise this concept in our society, we could succeed in increasing human happiness.

The Shanghai World Expo 2010 offers an analogy. It could have been an enjoyable event for everyone – but it wasn’t. The country and its leaders attained considerable prestige, and the authorities earned plenty of money. But visitors spent hours queuing outside the pavilions, waiting to attend the exhibits. This was totally predictable: the combined daily capacity of the pavilions was limited to less than 100,000 people, while the average daily attendance was estimated between 300,000 and 400,000 people. Three quarters of visitors were thus destined to wait outside.

Some people argue that limiting government power might improve society’s sense of well-being – but if privileged classes become unhappy, then the goal of maximising happiness fails. However, I think that even if, in the short term, the happiness of privileged classes falls, long-term happiness is still likely to increase. In the long run, the selfish pursuit of wealth to the detriment of others can be dangerous. Although justice is not always dispensed fairly, people are not discouraged from voicing their opinions and social unrest like that we have recently seen in Egypt will be difficult to prevent.

The maximisation of happiness has not yet become a widely shared goal because, today, information and opinion is not spread freely. Society is not sufficiently well educated and lacks tolerance towards value pluralism.   I hope that politicians will embrace the concept of well-being and put aside their pompous rhetoric, in order to focus better on the happiness of citizens.