“WHEN you open the window, both fresh air and flies come in,” said Deng Xiaoping, describing the good and bad consequences of the opening of China’s economy. Most people see economic growth and rising incomes as desirable, but they have their disadvantages. Families break apart, as young people move to the cities. Jobs become more insecure if the labour market is liberalised. Rising inequality may upset even those who are becoming richer. Small wonder, perhaps, that the satisfaction ordinary Chinese expressed with their lot fell at the start of the economic boom sparked by Deng’s reforms, before rising again as growth accelerated. So, at any rate, concluded a study published in 2012 by Richard Easterlin of the University of Southern California and colleagues.
Mr Easterlin is best known for a hotly contested paper published in 1974, which argued that rising incomes do not make people happier. Ever since, in spite of the obvious benefits, economists have debated whether getting richer is all...Continue reading
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