The Happiness Industry by William Davies, book review: How wellbeing got expensive

William Davies quotes Friedrich Nietzsche as having said that "Man does not strive for happiness; only the Englishman does that". That might partly explain the emergence of "happiness" indices as alternatives to GDP for measuring the well-being of society and the UK government's zealous adoption of the "nudge" principle developed by US academics Richard Thaler and Cass Sunstein.

I have been waiting for a book like this for a long time – one that warns of the dangers of such an approach. I noted with apprehension the setting up of a "Behaviour Insights [Nudge] Unit" in the Cabinet Office. The unit has used experimental behaviour techniques to attempt to alter people's actions, ostensibly for the common good. The assumption is that people can be "nudged" to make the "right" decisions, whatever that might be. One well-known area for this sort of approach is pensions. Only allowing people to "opt out" of a company scheme rather than "opt in" as before rapidly increases participation in the scheme; this is justified on the premise that better pension provision improves the well-being of society and makes us all "happier".

But is this ethical? Not if someone else decides what is and isn't right without going through a democratic process to get there. And not if you have been unknowingly manipulated into doing something you wouldn't otherwise do (and with dubious benefits for you in the future). Hands up those of you who think that the annuities they would get after years of pension saving represents good value for money.

Davies warns against the alliance that has developed between political authorities and academic researchers as well as those between economists and psychologists. I am usually in favour of interdisciplinary work. But Davies is right when he says that the notion of "happiness" has moved from being, as he calls it, a pleasant add-on, to a measurement useful in the business of making money – and at the expense of increased control over your life.

Look, for example, at the development of the "positive psychology" movement that helps you eliminate unhelpful thoughts. Children may soon be taught "happiness" in schools. Being miserable is no longer socially acceptable. There are now computer programmes designed to influence the way we feel. Face-reading software will soon be able to identify moods. Global firms have "chief happiness" officers. There are experimental "mood-tracking" apps that individuals carry with them on their smartphones, adding to the information which is being collected. We can now predict suicide rates from social media and mobile phone conversations.

The University of Pittsburgh analyses 50 million tweets a day to spot clear patterns in happiness levels, on aggregate. Techniques and technologies are now available in the workplace, the high street, even our homes, that apparently help us deal with our bodies to end up healthier and "happier".

In some ways, there is nothing much new in this. The ancient Greeks also talked of the link between a healthy mind and a healthy body. But the advances of the neuroscientists who claim they know how to stimulate the right parts of the brain to provoke "bliss" or engineer a "pain-dimmer switch" at will is worrying, according to Davies. For a long time, behaviourism concentrated on the study of animals, but in the last century this has slowly and remorselessly been extended to humans. This owes a lot to an animal psychologist called John B Watson, who in 1915 became president of the American Psychological Association. Watson argued that mental concepts such as perception, sensation and will mattered little and didn't need to be studied. Observation of how humans react to stimuli tells us everything, he said, just as it did for the white rats on which he had experimented. Watson's bid, according to Davies, was to turn psychology into "a proper science, cleansed of metaphysics and become a tool of expert manipulation".

After being sacked from his academic post for conducting an illicit affair with his graduate assistant, he was hired by the advertising giant J Walter Thompson, whose president, Stanley Resor, saw advertising as "mass education". Watson set off to advise that consumers could be conditioned to do – and feel –anything the advertisers wanted. Watson couldn't, though, dispense with human characteristics altogether, however much he would have liked. People have an annoying tendency to express desire, likes and dislikes. Feelings cannot be eliminated completely. But they can be investigated to allow the right selling environment to be designed. Randomised sampling methods, invented by statisticians in the 1920s, improved the survey techniques of the time. In the 21st century this has been hugely facilitated by mathematicians and physicists being able to first predict, and then influence, our behaviour. This is greatly helpful to companies which can then sell us "customised products", the so-called "predictive shopping" which tells us what we want to buy.

But it can be even more sinister than that. Right now, workers' email traffic is used to evaluate employees through the use of algorithms. "Smart homes" and "smart cities" monitoring (that responds instantly to real time data on the way we run our lives and homes) is already used to influence individual behaviour. Visit a Facebook page, sign an online petition and you are contributing to this data mining.

This data-led approach to understanding people under the guise of improving our happiness is leading to an expansion of surveillance capabilities to which we acquiesce. Big business and the state are able to condition our responses. So comes a seismic shift in the power balance between the individual and big business and more worryingly, between individuals and the state. We are, it seems, sleepwalking into the world of Larkin's "Essential Beauty", in which adverts depict "well-balanced families" but "Reflect none of the rained-on streets and squares". As Davies implies in this readable, disturbing book, being depressed by the human condition will no longer be socially acceptable, or even an option. The state or big business will soon see to it!

Vicky Pryce is the chief economic adviser at the Centre for Economics and Business Research and co-author of 'It's the Economy Stupid, Economics for Voters' (Biteback)