As a grad student in Detroit in the late 1980s, a social policy professor of mine suggested I read George Gilder’s 1981 book “Wealth and Poverty.”
The rationale behind the recommendation was that if I intended to enter the policy world, I needed a wide breadth of exposure to even the most controversial ideas floating around at the time.
While reading the book, I came across a passage I still remember vividly today. It talked about the decline in one’s standard of living after the birth of a child. Newly married at the time, I looked up and said to my wife, “Huh. Listen to this. According to this book, you can expect your standard of living to go down by 26 per cent after the birth of your first child. And even more with a second kid.”
I’m not sure what I intended to accomplish by introducing this topic. I was uneasy with the prospect of parenthood for many reasons, not the least of which was the enormous responsibility of caring for a child. I though that maybe this hard-headed fact might dissuade my wife from wanting to have children, given that it would literally eat into our standard of living.
I was wrong, and a few years later my eldest son was born. I know it sounds nauseatingly cliché, but something flipped almost instantly in me after he arrived and I fully embraced fatherhood. Gilder’s caveat retreated to simply being an interesting data point, a topic of discussion with polite company over drinks or dinner.
And more than 30 years later, I can confidently state that the birth of my two sons enhanced the quality of my life in incalculable ways.
I thought of this anecdote as I read reports of the annual World Happiness Report released recently, juxtaposed with the incessant criticism from opposition leader Pierre Poilievre, and a shrill posse of premiers, over Canada’s federal carbon tax.
Unsurprisingly, we learned from the happiness document that the top four countries reporting the highest levels of contentment come from heavily taxed Scandinavian nations. Canada ranks 15th. Other notable results among peer countries include the United Kingdom at 20 and the U.S. at a dismal 23.
Simultaneous to the release of this report was the weeklong drama of the federal Tories hammering the government over its plan to increase the carbon tax on April 1. Under Poilievre’s guidance, the opposition introduced a non-confidence motion to defeat the minority government. The gambit ultimately failed after the NDP and Bloc Québécois voted with the Liberals, but the Conservatives used the spectacle to make the case that they were the ones standing up for average Canadians.
“We cannot in good conscience stand by while this prime minister imposes more misery and suffering on the Canadian people,” thundered Poilievre in the House, according to the CBC.
It made for good political theatre, but is Poilievre correct? Will an increase in the carbon tax increase our collective “misery,” as he claims?
These questions led me back to the happiness report, looking for answers.
Were one to superimpose a ranking of marginal tax rates over the happiness index ranking, it might line up almost perfectly. Those pesky Scandinavian countries reporting such high levels of happiness also pay income tax rates well above satisfaction laggards like Canada and the U.S.
It’s further notable that many of the countries reporting high levels of happiness have been paying some form of carbon tax for decades. Finland, the perennial leader, introduced carbon pricing in 1990; Denmark, second on the list, has had one since 1992.
It’s cliché to parrot the mantra that money doesn’t buy you happiness. But in the case of disposable income and contentment, these Nordic countries are clearly on to something. Which begs the question: Mr. Poilievre, why are you so insistent on decreasing my happiness?
