Economics and happiness a new field with a long history

Many people focus on wealth when they pursue happiness, but research on social relationships suggests that they can be more important than material prosperity to subjective well-being. The word needs to be spread - it is important to work on social skills, close interpersonal ties, and social support in order to be happy. It is a mistake to value money over social relationships. (Diener and Seligman 2004)

After Rome had caught fire, it was probably 65 ad, Emperor Nero engineered to restore his reeling popularity by staging, in a surviving amphitheatre (before the Colosseum even existed), an immense gathering to watch a group of poor Christians be eaten up by fierce lions. As the stage opened -so the story goes - very soon after the first roaring hungry beast had dashed into the arena, one of those poor Christians, quite unexpectedly, sprang up toward the lion and somehow managed to mutter a few words in the lion's ear. Instantly the lion lost his mood, collapsed to the ground and lay still without any possible reaction. Breathless, the crowd looked at Nero. The Emperor immediately ordered a second lion, a fiercer one, to enter the stage. To no avail, however, and the same scene went on being repeated three or four times. The event definitely looked like a miracle. The Emperor, of course, was furious as the atmosphere was getting stormy. Two brutal soldiers got hold of the poor Christian, raised him to the Emperor's stalls and threw him at His Majesty's feet. 'What the hell did you say' - Nero raged - 'in the lion's ear?'. To which the man innocently replied 'I just said to him: "There will be speeches after dinner!"'.

The story looks plausible and it explains the inclination of a number of scholars who are, to the present day, so fiercely opposed to dinner speeches during Conferences. The same fate, unfortunately, sometimes extends to introductory chapters of collected papers or classics. Some editors may in fact sometimes be tempted to seize the opportunity and play Nero at the expense of their fellows, the proper authors. It will be up to the readers to judge if, in the present instance, we are able to escape our lot in that respect. Our introductory chapter presents a brief survey of the formative steps of the new and developing field of research on Economics and Happiness. We really trust this is not merely paying lip-service to a possibly disputed custom. To give a more precise idea of what it is all about, we further propose a discussion of the main interactions of the analysis on Economics and Happiness with old and new topics in contemporary Economics. We are going to touch on externalities, especially in consumption, Sen's idea of liberty, including his discussions on functionings and capabilities, and the recent developments on civil (rather than political) economy, characteristically emphasizing the role of interpersonal relations. All of these topics have some close relationships with the current developments of Ethical studies in Economics, as we shall see along the way. We shall also discuss some of the recent achievements in Cognitive or Behavioural Economics, which come as a fruit of the renewed Interactions of Economics and Psychology and are extremely relevant to our subject. A number of open questions concerning Happiness studies in Economics will then be touched upon in a third section: these concern issues on labour and satisfaction, problems of income distribution, the role of the market and, more particularly, of financial markets. We shall then finally give a summary outline of the present volume and try to weave a plausible thread linking the contributions to one another, thus offering an evaluation on the coverage in this volume of the fast expanding field of Happiness studies in Economics. We shall close with a number of indications for further reading in a brief survey of the recent literature in the field.

A great philosopher of music (Jankelevitch 1983), has made it part of his own philosophy and argued at some considerable length that it is a special character of musical experience that through music we are rewarded with an acceptable expression of something valuable if, and only if, we have not directly and possessively searched for it, so that it all comes to us as a gratuitous reward (ibid., pt III, ยง 2). A kind of serendipity is involved in the argument. Jankelevitch draws an interesting parallel with religious experience: in fact what he contends for the case of music is hardly new in the realm of events which are the result of grace. That we should probably not be inclined to think of music in the first place under that rubric, only means that, indeed, it can be rated as a discovery that the approach applies to both musical creation and musical experience, as Jankelevitch maintains.

Once we understand that as a discovery, we will probably find it quite natural to extend the result to the whole field of poetical creation. However, that would sound utterly implausible in economics, at least in so far as it is assumed that economics deals with actions where grace, and thereby gratuity, is excluded. The surprising discovery here, then, is that this is no longer self-evident once we enter the domain of happiness studies within economics. The main reason for this is that here we are led beyond the realm of action per se into the relatively unexplored territory of motivation. As we enter that territory we see immediately that current economic thinking is rather arbitrarily restricted to a narrow set of motivations to action and we are, therefore, forced to think in more general terms. It is in a context of this kind that we approach the idea that the notion of creation or tmesis - which means 'production' or 'creation' and from which also the word 'poetry' comes - has a very extensive domain for its application and that, indeed, had a not inconsiderable part historically in the shaping of the economic language. That this sounds odd today and require justification can be explained by the prevailing emphasis on exchange, rather than production, of much of the current imprinting of our current economic language. Of course production and exchange cannot possibly be entirely separated in economic reasoning; at the same time we get a very different view of the subject according as to whether we put the emphasis in our language on one or the other of the two terms. The dichotomy has often been stressed in the economic literature, albeit from different standpoints compared to the perspective chosen in our case.

A view of happiness which emphasizes creation has been called eudaimonism - a term which was popular in eighteenth-century philosophy, but which today forms the backbone of one current of thinking on happiness and well-being in economics. Eudaimonism - as explained, for example, by Deci and Ryan (2001, pp. 143-5) - conveys the belief that well-being consists of fulfilling or realizing one's daimon or true nature. In today's research eudaimonism parallels hedonism (to which we shall turn presently) as one of the two major approaches in the field of happiness studies in economics. The philosophical reference for the eudaimonistic approach is to be found in Aristotle, while Jeremy Bentham - not unexpectedly - still represents today the parent stem of the hedonic line of thinking and language in economics.1 It is proper here to dwell on two characteristics of eudaimonia, that are important also for the current debates on the paradoxes of happiness in economics, to which we shall come in due course. The first characteristic concerns the civil or political nature of eudaimonia leading to make friendship, as a form of fellow-feeling, an ingredient of it. This is stressed by Aristotle in his Nichomachean Ethics:

Surely it is strange, too, to make the supremely happy man a solitary; for no one would choose the whole world on condition of being alone, since man is a political animal and one whose nature is to live with others. Therefore even the happy man lives with others; for he has the things that are by nature good. And plainly it is better to spend his days with friends and good men than with strangers or any chance persons. Therefore the happy man needs friends. (Nic. Eth., IX, 9,1169b)

In its highest expression friendship is a virtue and it is more important than wealth, according to Aristotle, because it is part of eudaimonia and, therefore, is an end in itself, while wealth is only a means to that end.

In the second place, as a further ingredient of eudaimonia as a conception of happiness, to Aristotle there is an intrinsic value in the commitment to participate in civil or political life, without which human life does not flourish. Although human life by its very nature is capable of autonomous flourishing, in the sense that it cannot be jeopardized by bad fortune, it is also true that some of the essential components of the good life are connected with our links to our fellows and with interpersonal relationships. Thereby participation in civil life, as much as having friends, loving and being loved are essential elements of a happy life. In this sense - this is what needs emphasis - eudaimonia involves a paradox of the invisible-hand type: it cannot be achieved only through instrumental means. Rather it is the indirect result of virtuous actions, carried out merely in view of their intrinsic value, without any further motive.

Because it is composed of actions and goods, who has the activity - we might say - will of necessity be acting. This is what Aristotle argues in his Nichomachean Ethics in which he defines that 'it is our actions and the soul's active exercise of its functions that we posit as being Happiness'. With that definition we have 'virtually identified happiness with a form of good life or doing well'; and 'virtue in active exercise cannot be inoperative - it will necessarily act, and act well' (Nic. Eth., I, viii). We may translate Aristotle's words in the following message: civil life leads to eudaimonia by its very nature, that is, only if it is marked by sincere and gratuitous sentiments. Martha Nussbaum (1986, ch. 12) argues that friendship, love and political commitment are the three main relational goods that Aristotle had in mind. They have an intrinsic value, are part of eudaimonia, are gratuitous, and cannot be instrumental. Because they are made of relationships, relational goods can be enjoyed only in reciprocity and, also for this reason, they are said to be vulnerable and fragile.

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