HOW CAN WE TAME THE RAT RACE?
In Chapter 10, "How can we tame the rat race?", Layard describes some possibilities to create better conditions for happiness in Western societies. He reformulates and emphasizes again the importance of social comparison by demonstrating the impact of hierarchical status on happiness with statements like the following on p. 150.
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'We want to entertain other people as well as they entertain us, and we want our children to have the things their friends have. These are not ignoble sentiments of envy; the desire for status is basic to our human nature.'
Money is one of the things that bring status and if money was simply wanted for the sake of status, the quest for money would be totally defeating. The number of ranks in income distribution is fixed, and one person's gain would be another's loss. Fortunately people also want income for its own sake and not only for its value relative to others. At this point Layard refers to a study that found that people care about absolute income twice as much as they care about relative income (Blancheflower and Oswald, 2004), The struggle for relative income is self-defeating and should be discouraged. A collective agreement would be a solution but there are too many people to make such an agreement possible; we need to find some other way.
Layard has five 'other ways' or principal proposals to tame the rat race.
1. Tax on income from work, or in Layard's words, 'taxing pollution' in order to help people to preserve their work-life balance.
2. Taxing addiction, like a tax on cigarettes, to compensate for the fact that people do not sufficiently anticipate the addictive effects of certain products.
3. Discourage performance related pay because this type of payment stimulates dysfunctional social comparison and undermines intrinsic motivation.
4. Ban commercial advertising directed at children under 12 like in Sweden.
5. Create a better balance between competition and co-operation by stimulating co-operation.