Note on Economics of Happiness

Topics: Sustainability, Gross domestic product, Sustainable development Pages: 5 (1166 words) Published: October 7, 2013
Theme Note on Student's Seminar Competition-2012
Topic - Economics of Happiness

Robert Kennedy, March 16, 1968
The Gross National Product (GNP) measures neither our wit, nor our courage, neither our wisdom nor our learning. GNP measures everything, in short, except that which makes life worthwhile. We have certainly missed to have a proper look at these points in the past few decades of our relentless pursuit of economic growth. Despite the world's unprecedented wealth, there is vast insecurity, unrest and dissatisfaction. According to Prof. Jeffrey Sachs, the relentless pursuit of higher income is leading to unprecedented inequality and anxiety, rather than to greater happiness and life satisfaction. Economic progress is important and it can greatly improve the quality of life, but only if it is pursued in line with other goals. In words of Prof. Simon Kuznets, 1962, an economist and the architect of the concept of GDP, “The welfare of a Nation can scarcely be inferred from a measurement of national income as defined by the GDP. Goals for more growth should specify of what and for what. What for whom is this growth for!” Bhutan is a small neighbour country of India, the king of Bhutan decided 40 years ago, as its national goal to pursue, “Gross National Happiness”, rather than gross national product. Since then, Bhutan has been experimenting with an alternative, holistic approach to development that emphasises not only economic growth but also culture, mental health, compassion and community. How to achieve happiness cannot be characterised by rapid urbanisation, mass media, global capitalism and environmental degradation. How can our economic life be reordered to recreate a sense of community, trust and environmental sustainability? Some initial conclusions on a path to seek solutions to these questions are listed here:

1. We cannot denigrate the value of economic progress. Economic development that alleviates poverty creates a vital problem in boosting happiness. 2. Relentless pursuit of GNP to the exclusion of other goals is also no path to happiness. 3. Happiness is achieved through balanced approach to life by both individuals and societies. It is one thing to organise economic policies to keep living standards on the rise, but another to subordinate all of society's values to the pursuit of profit. Apart from the pursuit of profit, a society typically may want to pursue 'other' aspirations. These are:

a. Fairness;
b. Justice;
c. Trust;
d. Physical & Mental Health, &
e. Environmental Sustainability.
4. Global capitalism presents many direct threats to happiness by destroying natural environment through climate change and other kinds of pollution. It is weakening social trust and mental stability – as is evident from the rising prevalence of clinical depression, the world over. The mass – media have become outlets for corporate messaging, much of it is anti-scientific. This results into lack of transparency in communication of information, which ultimately adds more stress which people have to bare. 5. To promote happiness, it is necessary to identify many factors other than GNP that can affect society's well-being. It is required for countries to invest to measure GNP, as well as to spend some minimum amount of resources to identify the sources of poor health, declining social trust and environmental degradation. Early economists and philosophers, ranging from Aristotle to Bentham, Mill and Smith, incorporated the pursuit of happiness in their work. Yet as economics grew more rigorous and quantitative, more reductionist definitions of welfare took hold of the discussion. Utility was taken to depend only on income as mediated by individual choices on preferences within a rational individual's monetary budget constraint. In principle, economists, should be concerned with measuring the conditions of the well-being of the households, of a community or nations as well as the conditions of...
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