Economics of Happiness

After such a long stint in the economic doldrums, much has been made of the recent upturn in consumer spending in Germany, improving growth rates and falling joblessness (3.7 million in July compared to almost 4.4 million at the same time last year). So much so in fact, that some are talking of a second "economic miracle."

Reports about a better balanced budget and a new-found joie de spending among the notoriously cautious Germans abound. All of a sudden, the headlines are filled with a refreshingly convincing optimism, which seems to both reflect and spread a growing positive mood. Or is it just wishful thinking?

Birgit Gebhardt, the managing director of the Trendbüro Agency for Social Change, said Germany is not out of the woods yet.

"After years of national depression, all of a sudden the tide has made a massive turn, and the media claims we're in the throes of a consumer party," she said. "In actual fact, we really aren't at that point yet."

Gebhardt added that although Germany has managed to vastly improve its competitiveness over recent years and although a booming economy can contribute to reshaping the mood of a nation, Germany still has a long way to go.

What constitutes happiness?

The Allensbach Institute for Public Opinion has been conducting surveys about the happiness of Germans since 1945, when, with so many men killed in the war, women were asked whether they thought they could be happy alone.

The question of happiness was raised over and again in subsequent polls until the point at which it became a research subject in its own right. The most recent survey in the Institute's extensive archive was carried out last year.

A cross-section of 1,800 Germans from all over the country were interviewed face to face to try and establish what constitutes contemporary happiness. Wilhelm Haumann, a project leader at the Institute, said a blossoming economy is not the key to human joy.

"If we look at how income and how the perception of happiness have changed since 1945, we see a massive increase in income and absolutely zero change in the number of people who say they feel happy," he said.

On the other hand, however, living below the bread line is a fast track to misery, he added.

"While there is no definitive correlation between a strong economy and happiness, there is certainly a relationship between a weak economy and unhappiness," Haumann said. "Sixty percent of interviewees who said they were really unhappy, had financial problems."

Money is not the answer

So if being able to throw money around is not what makes people smile, what does?

"People like to be able to have the feeling that they are in charge of their own lives, that they can be influential and don't have to bow to external powers," Haumann said.

He added that Germans have been bound up in a very hierarchical society for so long that they don't have the freedom of personal autonomy. Being able to organize one's own life and make decisions at work rather than simply being bossed around contributes greatly to creating a strength of personality, which in turn is a pre-requisite for happiness.

"It's no coincidence that those with the greatest sense of initiative are the happiest," Haumann concludes.

All that being the case, the way in which the German labor market is developing must be a good thing. Although there is less security than in bygone days, there is far greater flexibility for both employers and staff, which should promote initiative, thus leading to happiness.

Happiness through flexibility

Tanja Siegmund, a spokeswoman for the international recruitment agency Adecco, said she recently witnessed a shift in the approach to finding work.

"The German labor market has traditionally been quite conservative, once people had a job they stayed in it even if they were unhapp," she said, adding that this is changing.

"People are becoming more daring, they are giving up their full-time, secure jobs because they are beginning to understand that they have other possibilities," she said.

Siegmund said she believes Germany has a lot to learn from countries like Holland and the United Kingdom where there is a far greater tradition of temporary and part-time work.

"It used to have a negative connotation attached to it in Germany, but people are beginning to see things differently," she said.

And it seems to be changing right across the employment board.

Jürgen Weber, a freelance television director, agreed that there is a new willingness for people to take chances with their jobs.

"There seems to be a new feeling that anything is possible, that if you lose one job, you can find another," he said, adding that people are prepared to work for less money than in the past and that they seem to have more fun with what they are doing.

"The industry is much more dynamic now, the mood is simply better," he said.