Richard Layard looks happy in his book jacket photo. And well he might. After all, he's a professor and peer of the realm, occupations that give him wealth and status. As well as being desirable in themselves, both are likely to lengthen his life - which, given that he appears to be enjoying it, is fur- ther reason to smile. And yet we should not jump to conclusions. According to Professor Layard's entertaining if moralistic book, wealth and status may even be the enemies of happiness.

If the professor enjoys life, it is more likely to be because he is engaged in good work - promoting the well-being of the nation. Putting the needs of others before our own is, he claims, an important ingredient of happiness. There are others, such as being part of a happy family, trusting others, and autonomy. But Layard's main concern, as an economist, is to disabuse us of the notion that happiness correlates with wealth.

This is not an ivory-tower thesis. Layard, who has been a senior government adviser on issues of unemployment and equality, believes not just that happiness is a desirable ambition for a society, but that the latest findings of neuroscience, psychology and economics make it achievable. Advancements in brain science enable us to measure happiness (so no more undergraduate debates about its meaning) and economic management can help us deliver it to the nation. It is now the business of any govern- ment, Layard thinks, to turn its attention to making us happy, just as it once saw enriching its citizens as a primary aim.

And that seems a rational ambition. We are richer than ever, but we are not happier. Happiness has remained static at roughly its 1975 level. We may even be less happy than we were in the 1950s, when we were almost four times less rich. This is because our wants increase according to our means. Our sense of well-being, instead of following income on an upward trajectory, has an annoying habit of falling behind as new perceived needs swallow up increases in salary. As Samuel Johnson put it long before the "new science": "Life is a progress from want to want, not from enjoyment to enjoyment."

But that does not mean that it is better to be poor, or that income has no impact on our enjoyment of life. Satisfying basic wants does increase happiness. After that, however, the relationship between money and happiness breaks down. Within a short time, a pay rise will have no effect on a person's mood. Its impact will be further dulled if colleagues receive the same as you.

This habit of comparing ourselves with others is a major source of discontent, and Layard urges us to give it up by telling the following joke. A Russian peasant has no cow but his neighbour does. "How can I help?" asks God, and the peasant replies: "Kill the cow." Gore Vidal expressed the same idea even better: "Whenever a friend succeeds, a little something in me dies."

The past two decades suggest that concern for others and joy in their happiness is not hard-wired, though it played a significant role in left-wing thought in the past century. Now, Layard believes, the primary "ism" is individualism; the decline of social responsibility that it brought in its wake has left a moral vacuum. Thus, the two dominant ideas in the west are Charles Darwin's "natural selection" and Adam Smith's "invisible hand". We think it is progressive to be selfish and that, if we are, things will anyway turn out for the best. Layard's book is intended to challenge both ideas.

With its sky-blue dust jacket, its cartoons (songbird to man: "I don't sing because I am happy. I am happy because I sing"), graphs and bold-type cross-heads, Happiness would be at home on the self-help shelves alongside titles such as Seven Paths to True Bliss. (Layard even offers a "big seven" causes of happiness.) But there are worse crimes than making economics fun to read - and Layard directs those made uneasy by such lightness to a website on which he has posted annexes of his analyses and statistical data. He appears to be scrupulous in attributing ideas to their original authors, and would surely be the first to admit that his findings and prescriptions rely on the work of other "happiness" experts such as the Nobel Prize-winner Daniel Kahneman, Richard Easterlin and Andrew Oswald (who famously costed a happy marriage at £70,000).

But is Layard right to believe it the proper business of government to make us happy? It is not so much the ambition that chills me as the thought of the heavy-handed and humourless way in which politicians might interpret such a duty. Even kind-hearted Professor Layard can be horribly prescriptive, arguing, for example, that because family life has such a huge effect on happiness, our government should introduce compulsory parenting classes, and schools should teach emotional intelligence from the age of five. I feel the depression descending already.

Barbara Gunnell is a contributing editor of the New Statesman