Impact of Size and Quality of Governments on Happiness: Financial Insecurity as a Key-Problem in Market-Democracies

If I agree to do a job for a friend for $100, my friend and I would get very upset if someone else would put his hands on our shoulders, telling us that he wants a 20 % Value Added Tax and 25 % Income Tax of the remaining $80, $40 altogether. Perhaps we would cool down a bit if he would be a nice guy and if he would tell us some reasonable story about all the good things he wants to do with our money. But we would still be rather upset and critical. Benjamin Radcliff however, argues that there is a positive relation between the size of governments, as expressed in expenditures and taxation, and average happiness in nations. His conclusion is counterintuitive but nevertheless convincing, in particular by his excellent statistical analysis of available data. His argument would have been even more convincing, if he would have focused a bit more on his key-problem: poverty and financial insecurity in free-market societies. This problem can be solved by a gradual introduction of a basic income, in combination with more political attention for the distribution of labour in society. Work has to be done by somebody! He also should have paid more attention to the quality of governments as a necessary condition for his argument, and he should have acknowledged that even a small government can be very effective. Big government is neither required nor sufficient for happiness! In this article Radcliff’s argument will be summarized first, followed by some critical comments. Copyright Springer Science+Business Media Dordrecht 2015