Yes, folks, happiness days are here again, again. A new campaign called Action for Happiness was launched on Tuesday. It was also launched, I distinctly recall, back in January, and often before by such luminaries as David Cameron, the Dalai Lama, Billy Graham, Dale Carnegie and Aristotle. You can ridicule happiness, bash it on the head, stamp it under foot, but back it comes, smiling cheerily and offering a free cappuccino. Today's guru is Lord Layard, claiming support from "people in all walks of life in 68 foreign countries." In January he persuaded the BBC to launch a happiness-does-not-mean-money "challenge", spoiled when BBC executives were revealed as joyfully and mindfully paying themselves fortunes.

In a troubled world it is hard to quarrel with a peer of the realm going round doing "small acts of kindness" to others in distress. Yesterday's online launch was drenched in early Blairism, with a "global mass movement" of 5,526 people, all professing to "be the change", with "10 keys to happier living" and websites with names like headspace.com. It brings back fond memories of luvvies, cool Britannia and Arts Council grants for reciting abstract nouns. As Charlie Brown would have put it, happiness is a big debt.

Is there any more to this than "Hullo clouds, hullo sky"? The answer is surely yes. I regard Layard's basic challenge as perfectly serious, that of a practical economist remarking: "Our living standards are unprecedented and yet our happiness is no higher than 50 years ago." There is respectable evidence for this claim, which makes me ask why Layard is in bed with so many fruitcakes.

That happiness – or wellbeing or satisfaction – is hard to define does not negate the attempt. The Georgian philosopher Jeremy Bentham influenced a century of British welfare radicalism with his "felicific calculus". His quest for "the greatest happiness of the greatest number" was eventually sublimated in one man, one vote – but the assumption was the same, that people would vote for what gave them most contentment. The trouble for Bentham, as for Layard, is that they tend to vote for prosperity. Money might not bring happiness but, other things being equal, it helps.

In this debate the search for solid ground underfoot is not easy. The paradoxes are familiar. Voltaire's Candide had the same problem in El Dorado: it was blissfully rich "but was not Westphalia". Midas was granted his wish that all he touched be turned to gold, but with alarming culinary consequences. More recently the king of Bhutan demanded of his ministers not gross national product but "gross national happiness", but it was achieved by evicting aliens and behaving as an absolute dictator. Democrats want politicians to give them money, not mush.

Yet their wants are more subtle than that. The much-vaunted Gallup world happiness poll for the University of Illinois in July of last year surveyed 136,000 people covering "96% of the Earth". It reached the conclusion that there was a clear correlation between income and "life satisfaction", but less between income and positive enjoyment. In the latter case more depended on personal respect, independence, work fulfilment and human relationships. At a certain level of comfort, people began opting for friendship, fair treatment and even a sunny climate.

There is much research on the role of "positional goods" and of equity in promoting happiness, so much so that Layard once advocated a marginal tax rate of 60% on the rich, to penalise them for the offence their mere existence posed to the poor. The economists Richard Wilkinson and Kate Pickett suggested in The Spirit Level that countries with more equal incomes had fewer social problems, though others protested that such countries were just smaller or had fewer immigrants.

All of which suggests that this neo-hedonism should be taken seriously by students of politics. Nanny statists bid us care for our bodies by exercising, not walking under trees and eating fruit twice a day. Surely they should be equally proactive about our minds. What of the evidence that meditation aids mental stability or redistributive taxation promotes social harmony? Why not have psychotherapy on the rates?

Even where government is properly engaged, as with existing welfare policy, what the public wants surely matters. Research indicates that people are more satisfied with services the closer they are run to their community, as with clinics in Scandinavia or police in Japan. They are happier where they are allowed more personal and neighbourhood autonomy. Yet all British governments, national and local, remain implacably opposed to honouring this satisfaction. They do not trust people to tax and provide locally.

Likewise, there is a clear preference for smallness and intimacy in public institutions. People like small schools and small hospitals. They like their own GPs rather than group practices. Yet every move by government is in the direction of bigness, closing local schools and hospitals and aiming always at regional concentration. The assumption is too glibly made that people want what is big, efficient and cheap, though they are never asked if they might prefer small even if less efficient and more costly. Why not ask what makes them most happy, rather than just less taxed?

The greatest misery caused by the state to the greatest number of people in Britain is, I have no doubt, by the 1971 Misuse of Drugs Act. It takes a random selection of variably harmful substances and fails to regulate or curb their use, merely criminalising, imprisoning and wrecking the lives of tens of thousands of users, at an enormous personal and public cost. Every sane politician who deals with this law knows it to be bad. Yet it is not reformed because that would take a degree of political courage, which is another way of saying that the happiness of the many is not allowed to interfere with the contentment of the few – in this case politicians.

I would have more sympathy with the happiness lobby if, rather than constantly eschewing any thought of "being political", it got its hands dirty. Rather than parody John and Yoko's "make love for peace", the lobby should put its money where its mouth is. The claim is that happiness is definable and measurable. In that case the lobby should subject government policy to a rigorous happiness audit. It should test and expose the misery-creating acts of politicians and champion a true state infrastructure of joy.