The case against happiness-based economics

It is the greatest good to the greatest number of people which is the measure of right and wrong.
— Jeremy Bentham

The bones of philosopher Jeremy Bentham may be locked in a case at University College London, but Bentham’s ghost is flying around universities and government buildings, animating nice people. These otherwise intelligent folks are engaging in so-called “happiness economics.” And that should make us a little unhappy, for reasons I’ll explain.

Jeremy Bentham is the fellow who, in the 1700s, set out the philosophy of “utilitarianism.” That’s the moral theory that basically says the “good” or the “moral” is whatever action or policy contributes to the greatest total happiness in society. Bentham thought you could devise a “hedonic calculus” — a measure of aggregate happiness. It’s no accident that some forms of welfare economics grew out of his idea. In fact, some consider Bentham to be a founder of modern economic science. But be warned: utilitarianism is a bankrupt idea.

The main problems of utilitarianism are:

  • It’s impossible to measure happiness or well-being (despite lots of questionnaires);
  • Happiness is fundamentally personal — that is, subjective;
  • Attempting to aggregate happiness means thinking of “society” as having happiness;
  • Policies derived from the latter bullet ignore individual rights;
  • It opens doors to those who claim to know how to make “society” happier, given power;
  • Proponents usually jump to conclude that wealth redistribution satisfies the utility principle, whether or not the methodology works.
  • And there are more.

The extent to which an alternative strain of utilitarianism can address these problems is the extent to which it is a tortured strain. But happiness research and “happynomics” is pretty much just mainstream utilitarianism wrapped up in surveys and questionnaires. That’s why we should be suspicious from the start.

Utilitarianism warmed over

Take Kentaro Toyama’s recent pitch for happynomics in The Atlantic. In “The case for happiness-based economics,” Toyama concludes:

Building a public policy on the foundation of happiness research would be controversial, to say the least. Critics, especially on the right, might accuse Washington of using wishy-washy assumptions about money and happiness to guide our tax and welfare policy. To be sure, causal relationships between income and happiness are still not established, and we care about values beyond income equality. But, focusing on the logarithm of income might make us pay a little more attention to that third pursuit Thomas Jefferson hailed in the Declaration of Independence.

Before doing anything else, we ought to defend Thomas Jefferson. The whole point of that “third pursuit” (the pursuit of happiness) is that it is a right to pursue, not to an outcome. Welfare economics and so-called “happiness-based” policies are, by their very natures, ambivalent with respect to pursuits. In fact, the whole point of utilitarianism is that it is concerned with consequences — e.g., the measure of happiness at some slice in time.

Similarly, redistributing wealth is about the goal of reduced income equality. Jefferson meant something very different when he wrote the Declaration. In other words, Jefferson wasn’t concerned about whether or not you became happy — or rich — but that you had the freedom to pursue happiness your own way. Diverse means and diverse ends. I don’t know which is more troubling: confusion about the term “pursuit of happiness” or conflation of the phrase “all men are created equal” with worries about income equality. But I digress.