Capitalism and the economics of happiness

It is difficult for humans to be happy on an empty stomach or without shelter. Yet, in most surveys about the sources of happiness, people usually rate higher other determinants of happiness such as family and health. So, it is wealth-creation (the main objective of capitalism) the only road to happiness? The answer is obviously no!

Different people pursue happiness in different ways, namely through meditation, friendship and many other ways that do not depend on the availability of the material comforts of life (see Layard, 2005). Yet, it is also unquestionable that the abundance of material comforts may facilitate or prevent the attainment of happiness.

One important factor to notice is that the pursuance of material wealth is often detrimental to the other factors contributing to human happiness, namely family life, community and friends. However, most people will pursue wealth regardless of the economic system.

Therefore, as it is often the case, the drive for wealth should not be confused with the results of an economic system (capitalist or other). For instance, imagine that humans were divided in two groups – satisfiers and maximizers. It will take a lot of reward to convince the first to emigrate and leave behind family and friends. So, in capitalism only its higher rewards can be blamed for enticing the urge to move on those individuals.

Nevertheless, the opposite is equally true. One should not ignore the key role played by wealth in family life. In particular the Portuguese adage that “in a hungry family all fight and none is right”.

Indeed, the impact on family life and health through industrialization and urbanization was initially very disrupting and resented in the early days of capitalism, which led many social-minded philosophers to blame capitalism for that.

Likewise, long working hours, women employment and job insecurity often contribute to some of the greatest causes of unhappiness, namely separation/divorce and unemployment. Yet, this cannot be fairly attributed to capitalism, especially when we compare its working conditions with those under slavery, serfdom or communism. Moreover, it gave women a degree of freedom never enjoyed in the past both in terms of self-supporting income and domestic help.

Of course, greater freedom inevitably comes with a greater sense of insecurity. In particular, the freedom of contracting could not provide a job-for-life and the sense of security enjoyed by the serfs tied to the land. But, to some extent the state ended up replacing the landlords in providing unemployment insurance and other welfare programs. Moreover, it freed men from compulsory labor and military service which were a major cause of death.

Finally, at the cultural and moral levels, capitalism is often criticized as responsible for the loss of a sense of belonging and for growing resentment and envy, all factors that diminish happiness. Again, the greater freedom, wealth and opportunities created by capitalism in turn favored individualism, consumerism and egalitarianism, which have happiness-reducing consequences. However, they also had significant happiness-increasing consequences in terms of liberty, abundance and social mobility, which, on balance are more important.

In conclusion, like all new economic systems, capitalism brought its own share of disruption to traditional values and certainties which wears down some sources of happiness. Although its facilitation of many other sources of happiness largely outweighs such erosion, there are some utopias that it cannot and should not promote, such as wealth equality. While equality of opportunity is indispensable for economic efficiency, trying to impose an equality of results would require eliminating individual risk and rewards and entrepreneurship which are fundamental for capitalism.

Means vs. Ends: Hedonism and Happiness

Our blog is mostly about reflections on the means to achieve human happiness. Still, from time to time, we need to keep sight of what are the end pursuits of humankind. Often, these are not easily distinguishable from the means like when we pursue a long but healthy live or when we need to trade immediate pain for future pleasures.

The later is often discussed when pursuing a hedonist approach to achieve happiness. A hedonist is defined as “someone who strives to maximize net pleasure (pleasure minus pain)”. This definition is vulnerable to the usual caveats of defining inter-temporal maximization in an environment of life uncertainty and volatile preferences. Equally important is the trade-off between individual and group satisfaction (family, social, national, etc.), sometimes called utilitarianism.

Constrained maximization is not only complex but also a poor guide for action when inter-temporal choice is involved. Despite the fact that at the unconscious level we seem to be wired in a hedonistic way to seek pleasure and avoid pain at the conscious level the science of the brain has not yet uncovered ways to explain masochist or depressive behaviors and similar deviations. Consequently a simplistic taking up of hedonism would lead us to sacrifice the future for the present.

Yet, despite its limitations, hedonism can also help us to tackle the eternal human despair over life expectancy. Almost 2000 years ago, when Seneca wrote his essay “On the Shortness of Life”, life expectancy was about one third of what it is now in developed countries. Nevertheless we continue to suffer over the same issue. Should medical science find ways to treble it again our descendents will still despair over the same issue and so on until eternity? Like Seneca, in the end we all conclude that life is never too short if we do not waste most of it. By living a full life we mean enjoying both the immediate sensorial pleasures as well as the pleasure obtained from friendship and idealistic conscious pursuits, whether metaphysical or not.

In conclusion, a mild and responsible pursuit of hedonism when complemented by love and enlightened virtues is an essential means to achieve human happiness.

New Year Wishes

I end this year with an apology to my readers for not having posted anything lately. I will start the New Year with the customary list of resolutions and wishes. My first and most obvious promise, starting in February, is to write here more often. The second pledge is that I will explore further the relationship between aims and means to reflect in particular on the role of fairness and fraternity as important parts of human happiness.

Apart from the usual longing for good health and peace, here are two of my wishes for 2011:
a) A return of enlightened reasoning in the media and politics. The “celebrity” &”sound-bite” takeover of modern culture has to be reversed. As a strong believer in individualism and market competition I am still hoping that the ongoing revolution in the entertainment and publishing businesses will be able to generate quality products. However, failing daily to find a single worthwhile prime time TV program after zapping more than 100 channels is getting me distressed. After all, even during the Roman Empire decline there was more than the Coliseum.
b) On the Portuguese (domestic) front my wish is that 2011 will see the departure of the current Prime Minister. He bankrupted the country and, to add shame to injury, rather than go to the IMF he is now peddling the world’s dictators (China, Libya, etc.) for financial assistance. What a disgraceful record for the democratic process in Portugal. After dilapidating the huge reserves inherited from Salazar and wasting the billions in grants received from the European Union the country is now broke. And for what? For an economic record that pales in comparison with that of Salazar, an unprecedented rise in inequality, a frightening increase in criminality and an education system in disarray? Still, despite this horrendous cost I would still chose the freedom gained in 1974. It was not democracy’s fault that we replaced a right wing form of state capitalism with a left wing variety. Nor do I believe that replacing Socrates will necessarily reverse the situation. But, even if the outlook is the same as with his predecessor, and the new Prime Minister turns out to be worst than the current one, it is still essential to change him to reach the bottom and get rid of the generation of “Jotas” who is destroying the country.

To finish on a positive note: best wishes for 2011!

Why only six pillars?

No doubt, the happiness of humanity cannot depend only on six pillars. However, at the dawn of a new millennium, we selected only those that strike us as the most important means to promote human happiness. By focusing on the means rather than the ends, we left out some important values like peace, friendship, family bonds and a healthy body and soul, as these are simultaneously means and ends in the pursuit of joy by humankind.

The most controversial pillar that we have left out is religion. Because of its crucial role to secure compliance with moral values and to help us face death, it should have a prominent role. Yet, since religion is at variance with the scientific method and it is often used to fuel hate and extremism we cannot consider religion as an unequivocal pillar of human betterment.

We see the six pillars as sustaining an equal number of columns in the gate of human progress. We looked for such beautiful gates with an historical significance but all we could find to illustrate our approach were the stone archway at Yuling, in China, and Hadrian’s Gate in the Ancient City of Ephesus in Turkey. Neither is particularly well suited to show the many sides supported by each pillar (so, if you are keen on art and may help us find a more beautiful gate we will be obliged). We are looking to add to each column the many ratings appropriate to monitor the multi-faced nature of the columns supported by each pillar.

Each pillar will be the subject of future posts. For now we close this post with a simply note on their role. The first two – representative democracy and constitutional liberalism are essential to understand how to manage power for the benefit of all. The next pair – market capitalism and productive work – is the key to a prosperous economy. The last two – scientific method and enlightened virtues provide the foundation for a gratifying life that goes beyond the satisfaction of our material needs.