Happiness: what's the use?

Abstract

There is a growing literature suggesting that economic analysis is not after all a dismal science, and that the discipline is capable of reinventing itself as an investigation of the nature and causes of human happiness. Reviewing two recent contributions to this genre, it is suggested that economists do have difficulties substituting ‘happiness’ for ‘utility’ as the touchstone for resource allocation, that the importance of ‘happiness’ in the evaluation of economic policy was well known in the eighteenth century but largely eradicated from the classical economics of the nineteenth and that the recent (re)discovery of ‘happiness’ by mainstream economics remains partial and unconvincing.

Keywords:

• happiness
• utility
• neoclassical economics
• wealth
• welfare

Notes

1. Abbé Sièyes, manuscript note commenting upon the preface to the second edition of Jean-Baptiste Say. Traité de l’Économie politique (1814), quoted in Sonenscher (2007, p. 262).

2. A very ‘social realist’ TV film of the 1977 book has, to my knowledge, never been re-shown, perhaps because it lends more emphasis to the hollowness of these kinds of dream than to the chance to dream – as in the later musical – see http://www.vivnicholson.co.uk.

3. Given that a proportion of the income of the British National Lottery is used to fund various social and community projects that otherwise might be considered the domain of central government expenditure.

4. Although national income accounting can be traced back to early efforts to assess the ‘strength of a nation’ (see, in particular, Stone, 1997) it was not until the 1920s that serious effort was made to arrive at a precise, monetary assessment of national output and consumption; for the British story, see Tribe (2005).

5. ‘It will be readily conceded that pain is the opposite of pleasure; so that to decrease pain is to increase pleasure; to add pain is to decrease pleasure. Thus we may treat pleasure and pain as positive and negative quantities are treated in algebra. The algebraic sum of a series of pleasures and pains will be obtained by adding the pleasures together and the pains together, and then striking the balance by subtracting the smaller amount from the greater. Our object will always be to maximise the resulting sum in the direction of pleasure, which we may fairly call the positive direction’ (Jevons, 1957 [1871], p. 32).

6. See Michael Sonenscher's brilliant exposition of this argument (2007, pp. 206ff.); see also more generally Hont (2006).

7. Bruni (2004) does sketch out some of the earlier French and Italian argument on ‘happiness’, but argues for a continuity in the development of modern economics, whereas I seek here to emphasize a radical reconstruction in the course of the twentieth century that disposes of the earlier work on which he lays emphasis.

8. ‘[T]he so-called Austrian school is scarcely distinguishable from the neo-classical’ (Veblen, 1900, p. 261).

9. One only needs to reflect upon procedures followed in sight and hearing tests to understand that those who rely for their living on measuring subjective states place no faith in subjective cardinal rankings.