A World of Unhappiness

A Bleak View

Observing the world as it moves through the second half of the 2020’s, the view looks bleak.

Wars, financial pressures, pandemics, economic coercion, persistent inequality, and rampant global warming are piling on top of one another. The world seems to move from one calamity to the next without properly fixing the last problem. Trust in the competence, power, and good faith of institutions to bring order to the world seems to be eroding everywhere.

Since 2011, the average score in the World Happiness Report has increased by 4.6% (footnote 1). That doesn’t sound too bad. But in the same period, global GDP has increased by 56% (footnote 2). If you exclude ex-communist bloc countries, the increase in the global happiness score has only been a miserable 1.5%. At the same time, there has been a well-documented recession in democracy across the world. Populism, authoritarianism, and illiberalism seem to be on the rise everywhere. The model of increasing wealth leading to increasing freedom and happiness simply isn’t working as promised.

This cluster of essays explores this world of unhappiness, mainly from the perspective of its symptoms. The Pursuit of Happiness and its Enemies cluster will then attempt the ambitious task of trying to isolate and diagnose the underlying causes.

The Moral Equivalence Problem

Before looking at the symptoms of unhappiness, I think it’s important to engage honestly with a question of moral philosophy that is mostly glossed over by much of the commentary on global issues: how to think about the challenges of the rich world versus the challenges of underdeveloped countries.

A fair-minded reader could legitimately question why the project should worry at all about wellbeing in Finland, where the average happiness score is 7.76, when the average happiness score of a citizen of Afghanistan is 1.45. And it is a fair question.

What is clear to me as a citizen of one of the rich countries is that most people in the first world simply don’t consider all human life to be of equal value. There is a pervasive behaviour, both in the media and among individuals, that seems to value a life primarily on the basis of the wealth, and maybe attractiveness, of that individual.

What I don’t want to do in this series is perpetuate and reinforce that bias by applying some sort of moral equivalence between first world and third world problems. And yet first-world discontent is consequential, and not only for the people experiencing it. The wave of nativist populism sweeping rich democracies is producing policy outcomes like protectionism, institutional withdrawal, and the erosion of the political will to sustain open trade and multilateral cooperation that fall hardest not on the populations generating them but on the developing world. The trade openness that has been the primary engine of poverty reduction across Asia in the post war period is now under sustained political attack from workers in rich countries who feel, with some justification, that its benefits have not been equitably distributed at home. The institutions of global cooperation that developing countries depend on most are being weakened by the same democratic dysfunction that rich-world voters are registering their discontent about. A causal chain runs directly from first-world grievance to developing-world harm.

There is a further reason to take this rich world discontent seriously on its own terms, without requiring that it rise to the level of injustice or be compared with more acute global suffering. Amartya Sen’s capabilities approach to human wellbeing asks not what people have, in absolute terms, but what they are genuinely able to do and be. By that standard, a rich-world former industrial worker whose community has hollowed out, whose children face worse economic prospects than he did, and whose sense of social recognition has collapsed, has experienced a real contraction in human flourishing even if his material circumstances remain vastly better than those of someone in the developing world. These are not equivalent deprivations, but they are both real. If this project is able to offer insights and innovations that improve human flourishing anywhere, it needn’t apologise for considering unhappiness wherever it genuinely exists, provided doing so comes at no cost to those who are objectively the worst off.

There is also a third, purely pragmatic, reason for taking first world issues seriously. Much of the developing world is subject to rule by a political class that overtly ignores existing unambiguous opportunities to improve the functioning of their countries. To the extent that this project can surface promising ideas for improving happiness outcomes, they are much more likely to be adopted by societies that already take the welfare of their citizens seriously.

This provides what I think is a morally defensible approach. The case for addressing first-world discontent rests not on moral equivalence but on three simpler propositions: that the consequences of first world grievance are genuinely global, that a world in which rich democracies function better is, on the available evidence, a better world for everyone in it, and, any useful ideas are more likely to be adopted by those rich countries than by developing countries that are already failing to adopt known beneficial policies.

Pattern Recognition

The essay The Unravelling World Order provides a deep dive into my take on the ways in which the rules-based international order, plus the post-cold war economic and political consensus, has been increasingly fraying. It is an uncomfortable read.

The essay takes a tour of useful and prominent examples of that unravelling, including the growth in civil and international wars, the hypocrisy and opportunism of major powers, weaponisation of supply chains and trade interdependency, trade nationalism, the failings of decolonisation, and the inability of the world to adequately respond to climate change. None of these is new as a topic, and this project makes no claim to have discovered problems that are not already widely discussed and examined.

What I argue in that essay though is that those problems share a common proximate cause - that the ruling elite in each country inevitably acts in its own self-interest, and that existing governance systems are simply not sufficient to grapple with the complexities of the world as it exists. Specifically, there is a common structural deficit, visible across the failures: the absence of governance that operates at the scale of the problem, with the authority to compel rulers, and operating with the explicit objective of producing better lives for all citizens rather than being subservient to the interests of the ruling elite.

These problems, I argue, are present across the governance spectrum, from full democracies to full autocracies. If it is accepted though that democracy, however imperfect, is at least structurally oriented toward aligning the interests of the ruling class to those of citizens, then the global retreat of democracy becomes yet another dimension of the accelerating failure of the world order.

The evidence for such a democratic recession is hard to ignore. The Economist Intelligence Unit’s Democracy Index has tracked it in granular detail. The global average democracy score peaked in 2014–15, declined in each of the following eight years, and reached its low point in 2024. The 2025 index reports stabilisation for the first time in nearly a decade. This is a finding worth acknowledging, and perhaps cautiously welcoming, but stabilisation at the bottom of an eight-year slide is not recovery. The sub-pillar showing the deepest and most persistent deterioration is the functioning of government — not elections, which are still mostly held, but the capacity of democratic institutions to translate political mandates into effective governance. The world is not simply becoming less democratic in form, it is becoming less capable in substance.

And there is one glaring exception to the 2025 stabilisation that the report explicitly names: the United States, where democratic institutions have deteriorated sharply since January 2025 and continue to do so. It is worth highlighting this, not because the US is somehow deserving of special attention and sympathy, but because the US has an outsized influence on the world, both geo-politically and culturally. Declining democracy there helps create the conditions for ruling elites to backslide on democracy and ethical governance everywhere.

There is a particular kind of exhaustion that sets in when problems arrive faster than they can be properly comprehended, let alone addressed. Wars without clear meaning or purpose that don’t seem to end. Institutions that pronounce and promise and then retreat. Solemn undertakings made by governments that remain unfulfilled. Wealth compounding in the hands of those who already have it. The clinical term for this convergence is polycrisis — multiple serious problems interacting and compounding simultaneously.

I think it is fair to assert that the feeling that the world is struggling is not paranoia, it is pattern recognition.

Could Things Get Worse?

For many people contending with these challenges, the sudden emergence of AI reasoning models has piled yet another source of dread onto an already heavy burden.

The essay The AI Abyss discusses my own modelling of the potential economic impact of AI. It presents the results of an economic model that applies orthodox economic assumptions and relationships to an economy suffering a productivity shock from AI under three scenarios, with the scale of employment displacement being the key differentiator between the scenarios.

The headline finding is more benign than initial intuition might suggest: under base-case parameters, employment falls only modestly in the low and central scenarios and rises in the high scenario, while real GDP grows substantially and real household incomes rise for both workers and capital owners.

This optimistic view needs to be heavily qualified by three observations though:

First, regardless of employment outcomes, the distribution of income shifts persistently and substantially toward capital. Real wages grow, but capital income grows two to three times faster, compressing the labour share of national income across all scenarios. The political economy implications of this shift for tax systems, for redistribution mechanisms, and for the legitimacy of market-determined income allocation, are significant, and are not resolved by the observation that employment may be broadly maintained.

Second, the benign outcome is parameter-dependent in important ways. It assumes that capital owners recycle their substantially enlarged incomes into consumption at a rate approaching 100% — a strong assumption given historical savings behaviour among high-income households, and one that becomes less plausible as capital income concentration intensifies. It also assumes that fiscal policy maintains a broadly non-contractionary stance. If either condition fails, employment outcomes deteriorate sharply.

Third, and most fundamentally, the benign outcome rests heavily on the orthodox economic belief that new industries and new jobs will emerge to absorb workers displaced by technology, as has been the case with every past productivity revolution. In the central scenario, 12.3% of total employment must be in industries that do not currently exist at scale; in the high scenario, more than half.

Standard economic theory predicts this will happen — rising incomes create demand for new goods and services, and entrepreneurial activity responds. But economic theory predicts that new industries emerge; it does not guarantee when, at what pace, or at what wage levels for displaced workers.

More disturbingly, there is a respectable argument that AI may be unlike any preceding technology.

A great insight of orthodox economics is the theory of comparative advantage, the principle that even a less productive party can find a mutually beneficial role in trade. In this case it guarantees that there will always be work that humans do in preference to machines, and that full employment can be more or less maintained. This argument has real force in normal circumstances. But with AI, it runs into a problem that is genuinely new in economic history. Comparative advantage works as an employment-preserving mechanism when the more productive party faces genuine capacity constraints. The brilliant lawyer who is also a faster typist than her secretary still hires a secretary, because her time in the courtroom is worth more than her time typing. The secretary has a job because the lawyer cannot be in two places at once.

AI does not face this constraint. It can be deployed in millions of instances simultaneously, at a marginal cost that is close to zero and falling. There is no ‘the AI is too busy doing more important work’ that leaves residual tasks for humans. This means that for any task AI can perform, the competitive wage for a human doing that task is bounded by what AI costs — which may be a small fraction of a subsistence income.

Humans retain a genuine comparative advantage in tasks AI cannot perform: physical presence that requires a body in a specific location; emotional authenticity that requires shared human experience; creative work that depends on lived life; legal and moral accountability that requires a person who can be held responsible. These categories are real and will likely grow in social value as AI-produced work becomes ubiquitous. But whether the demand for genuinely human work is sufficient to employ the full workforce at living wages is unknown. Humans may come to feel about AI much as horses must feel about the internal combustion engine.

Yet, AI may still be a boon for humanity if it generates abundance, and that abundance is shared in ways that leave every citizen better off.

So, the benign outcome is possible, but it is not inevitable. Whether it is realised depends heavily on decisions around capital income deployment, fiscal policy, labour market institutions, the social and political conditions under which new industries are cultivated, and taxation and redistribution policies.

The key point is that humans are not mere passengers on this journey. Decisions made by Governments will profoundly influence the destination.

Anxiety around AI is rising rapidly. In part this is due to the scale of uncertainty, and the speed of change. Implicit in the anxiety though is necessarily a doubt as to whether Governments are capable of responding quickly, effectively, and in ways that are in the best interests of the average person. Unfortunately, the state of the world, and the quality of Government functioning, gives people good reason for their anxiety.

Fear as the emotion of the moment

The problems described here are real and serious, and before winding-up this narrative I want to explicitly acknowledge the human impact. What can arguably be seen in the political trends across the globe is fear as the dominant emotional register of the current moment. There is a three-part structure to that fear: People are scared of actual events; they are frightened they won’t be dealt with because that has been the experience, and; they are immune to reassurance because too many of the claimed solutions were only ever politically convenient stories. There is a compelling argument that the dominant political trends of today, populist nationalism, authoritarianism, and illiberalism, are a direct product of this fear.

I do not believe, however, that the problems are unsolvable, the fear inevitable, or the trends unstoppable. The third cluster of this project attempts to probe more deeply into the root causes of why the governance systems that are needed have not yet crystallised. That will provide the platform for surfacing ideas about what fit-for-purpose governance might look like, and how Governments can pursue genuinely pro-happiness policies.

This essay has an unavoidable negativity to it. It is important to remember though that humanity has been through many dark periods, and yet it finds a way to regroup and to progress. While things may look bleak, it is also entirely reasonable to have hope, and to believe that from adversity, a better world can emerge.

Footnotes:

1. Comparing only countries with data for both years.
2. World Bank estimate at purchasing power parity, constant international $.

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