OCT 27

15: OCT 27 - 5. The Enlightenment, American Experience, Money and Happiness

Assigned

• McMahon, C6, “Lib and discontent” (313-331)
• "Economics of Happiness" [1]

In-Class

• Introduction to Easterlin Paradox [2]

McMahon, Chapter 6: Liberalism and Its Discontents (1st half to 331)

• Enlightenment liberalism and Classical Republicanism in the American experiment

• example of Franklin as quintessential representative of the American appropriation of Enlightenment liberalism.

• symbol of thrift and accumulation, self-made, tract, The Path to Riches and Happiness. But then, McMahon raises the question of whether the money - happiness connection is really central to the American experiment. Need to go into Enlightenment thought behind the “pursuit of happiness” phrase.

• Trivial Pursuits

• Dec. of Independence: tracing "pursuit of happiness" in enlightenment texts. Jefferson claims that he was trying to express a “common sense” of the American mind. However, he is altering Locke’s “Life, liberty, and property (estates)” phrase. Critic might call this a smokescreen for protecting property.

• Locke did think of happiness as a natural part of a Christian worldview, leading us to God. Virginia Declaration on Human Rights, contemporary, shows the liberty — property — happiness connection (318).

• Connotation of “pursuit” - Locke and Jeff understood hedonic treadmill at some level. McMahon suggests that this negative connotation is part of a deeper Christian line of thought that survived in the Enlightenment. Christianity teaches us not to expect ultimate desire satisfaction in material goods. Sermons of the time routinely linked happiness to Christian virtues.

• Jeffersonian Christianity focused on teachings of Jesus. The Jefferson Bible…. Jefferson is identified with “Classical Republican” less individualistic than Locke, focused on civic virtue and civic participation. Quote at 324. Jefferson’s knowledge of the Scottish Enlightenment thinkers would also inform him of a critical issue in Locke (raised by Hutchison), that pleasure may just lead to self-centered hedonism. Postulated “moral sense” as counterweight. A capacity to feel pleasure from good.

• McMahon traces this appreciation of limits of “trivial pursuits” of pleasure in Hume and Smith. Smith theorized that the illusory goal of desire satisfaction could have positive social effect, motivating pursuit of wealth, which is good for the society, even at the sacrifice of individual Happiness.

• Strange Melancholy

• Alexis de Tocqueville's contribution: Democracy in America 1835 1840: Sociological insight into sadness in the American experiment.

• Of Toq's thesis: Macmahon writes: "perhaps, the cynic, or at least the skeptic, may be on firmer ground. For in a society in which the unhindered pursuit of happiness (to say nothing of its attainment) is treated as a natural, Godgiven right, the inability to make steady progress along the way will inevitably be seen as an aberration, a suspension of the natural order of things." big passage: 333-334

• really about the dynamics of equality, freedom, and democracy vs. community and social values. U.S. a big experiment. Tocqueville also praised Americans for self-reliance and a sense of "enlightened self interest" -- realizing that it is in your self-interest to be concerned about others.

• And that, Tocqueville concluded in a famous line, "is the reason for the strange melancholy often haunting inhabitants of democracies in the midst of abundance, and of that disgust with life sometimes gripping them in calm and easy circumstances." praised enlightened self-interest of americans.

• Mill's contribution: Autonomy and Liberal Hope

• 344: image of John Stuart Mill reviewing Toq's essays and longing for democracy in Europe.
• If. "Let the idea take hold," Mill warned, "that the most serious danger to the future prospects of mankind is in the unbalanced influence of the commercial spirit. .. ."^^

• 347: section on Mill's depression -- famous -- finds solace in romatic poetry. why? evocative, imaginative against starker imagination of rationalist enlightenment.
• also in Mill (and Butler), the problem of indirect happiness (similar to puzzle about enlightened self-interest). Mill's passage 348 breaking with simple Benthamism.

• Mill, On Liberty passage 350 - can't violate someone's liberty to make them happier...

• McM: Is there a romanticism in Mill's position on Liberty?

• Weber's contribution: Socio-religious insight into the dynamic between capitalism and Protestant Christianity.

• Weber Section: 355 "In the Protestant anxiety over the fate of individual salvation, he argued, lay the motive force behind an impetus to capital accumulation, regarded as a sign and partial assurance of God's blessing. Combining ascetic renunciation, a notion of work as divine calling, and a critically rational disposition, the Protestant faith, Weber argued, brought together nascent capitalism's essential qualities: the restriction of consumption in favor of the accrual of capital, and a religiously consecrated ethic of discipline, delayed gratification, industry, and thrift.

• 358: "Indeed, it was during the very period when Weber was writing that America, and the West more generally, began to undergo what the sociologist Daniel Bell has described as a monumental transformation, "the shift from production to consumption as the fulcrum of capitalism." Bringing "silk stockings to shop girls" and "luxury to the masses," this transformation made of "marketing and hedonism" the "motor forces of capitalism," driving over all restraints that stood in the way of the enjoyment of material pleasures with a momentum that would have surprised even Tocqueville." (Note: Galbraith, "The Dependency Effect; reliance on raising GDP; sustainability of economy and population)

• "Material goods," he observed at the end of The Protestant Ethic, "have gained an increasing and finally an inexorable power over the lives of men as at no previous period in history."

• Discussion topic:

Crash Course on Happiness Economics, Adriene Hill

• the presenter [3]

• Typical correlates: $82K, keep your job, don't compare too much.

• General historical assumptions of economics: unlimited potential for desire and satisfaction, linear relationship with money.

• H&W Economics news!!: "Happiness economics" starts by studying the disconnects and gaps in theory based on this assumption. The Easterlin Paradox is a central area of study.

• Example: non-economic satisfactions. Cooking a meal for someone. Being offered money could ruin the satisfaction.

• Thought bubble: relative income and satisfaction. beyond some level of income the value of additional money has diminishing returns. Basically, the idea that the law of diminishing marginal utility applies to income. "The law of diminishing marginal utility says that the marginal utility from each additional unit declines as consumption increases." 2010, about $82k in the US.

• Life satisfaction judgements (H-l)do track income and wealth across time.

• Unemployment trashes H-l. Especially middle aged unemployed. Greater than the money loss. Affects future outlook.
• U-shaped curves: for unemployment, long commutes, ccard debt, inflation.
• Reference income hypothesis: Satisfaction from your income depends in part upon your reference set, who else you compare to. Living in a rich neighborhood in poor county give you a boost. Status.
• Easterlin Paradox introduced: "The 'Easterlin Paradox' states that at a point in time happiness varies directly with income both among and within nations, but over time happiness does not trend upward as income continues to grow."

• Explanations: status, set point theory, hedonic adaptation (Rousseau quote 6:45), not a paradox (possible counter evidence from low income countries).
• Steverson and Wolfers - average levels of happiness do rise in relation to GDP.

• The GDP debate -- Is GDP the right focus for economic policy? Bhutan...GNH. (Some details from Easterlin on what that might mean.) Kennedy observations: GDP counts everything, even bad things, and misses lots of things we do value.