Do people who live in more developed and wealthier countries find more happiness than people in lesser developed countries? This paper analyzes the results of happiness between two sets of countries that fall on opposite sides of the industrialization and democratization scale. The results show that people between the two sets of countries are equally happy. It also shows that people in both sets of countries also are equally likely to be happy when finding things like family or friends important. As it turns out, happiness has little to do with GDP or wealth income of one’s country. In the second part of the study, happiness does not change much as a country industrializes. The author explores the point to industrialization and democratizing given one of the main goals of government should be happiness of their people.
Review of the Literature
It is a generally accepted idea that when countries industrialize, they improve living conditions for everyone in the country most importantly the rural poor. Britian was the first country to industrialize over a century ago, now each country that wishes to follow Britian’s example must use more state intervention. Resources and workers must be moved from rural agriculture to urban life in factories. This theory is known as the Gerschenkronian collective dillema and suggests that countries should want to industrialize and do it quickly with government coercion.
Along with more state intervention in the domestic markets, industrialization also includes opening up a countries markets to international free trade. Theories introduced centuries ago by Adam Smith and other neoclassical economists state that countries will be able to increase wealth and gross domestic product (GDP) by allowing the markets to dictate free trade. David Ricardo took this idea one step further in introducing his idea of comparative advantage which stated that each country has an abundance or scarcity of either land, labor or capital. If a country has an abundance of one and a scarcity of another it is in their advantage to trade with a country that has a scarcity of one and an abundance of the other. Under Ricardo’s theory, all countries would have relatively equal weath leading to his idea of the convergence theory. This states that if countries follow his model of trade they will converge in wealth over time. Unfortunately, Ricardo failed to understand the important role of research and development and technology.
To make up for this omission, the strategic trade theory stresses those two things in its model of development. The theory also stated that the convergence theory won’t work because some abundances are more competitive than others and with firms forming oligopolic power there is no perfect competition. But even this theory has not been able to bring countries together.
Unfortunately today, countries are drifting apart in terms of wealth and are being separated along...