ABSTRACT
The market doesn’t make us happy—or at least not happy enough. That, at any rate, is the complaint of the British economist Lord Richard Layard, whose Happiness: Lessons from a New Science, is only one of a number of recent contributions to the burgeoning field of “happiness economics.” Taking as their point of departure the observation that self-reported happiness or “subjective well being” seems not to have appreciated markedly in the principal Western countries over the past fifty years, despite steady gains in income, Layard and company advocate infusing classical economics with a strong dose of contemporary psychology to produce happier marginal returns. “Smithian laissez-faire is not sufficient to achieve [the greatest happiness],” Layard observes, adding that “we need a fundamental reform: we have to implant the substantive findings of psychology into the framework of economics.” From the new science of positive (or hedonic) psychology—the study of what makes human beings happy, not sad—Layard and others believe they can draw a relatively precise picture of what the Nobel Laureate in economics Daniel Kahneman calls “objective happiness,” isolating the basic sources and indicators of positive affect or mood. With this information in hand, the task of the policymaker is apparently clear. “Happiness should become the goal of policy,” Layard writes, “and the progress of national happiness should be measured and analysed as closely as the growth of GNP.” What the tiny mountain kingdom of Bhutan has already adopted as its basic social indicator—GNH (Gross National Happiness), as opposed to GNP—should now be embraced by the West.
