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Summary of 'Economics of well-being'
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Summary of the course 'economics of well-being'. Contains all lectures of this course; including a guest lecture.
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Economics of well-beingSummary of all Lectures
Radboud University Nijmegen
Yoël Guijt
, Lecture 1 — Introduction: Economists, Happiness and Well-being
Following topics in this course:
> GDP, Happiness, Subjective Well-Being (SWB), SWB in labor markets, and others ways to
understand happiness
Adam Smith — Classical Economics Perspective:
> It is about “Tranquility and Enjoyment” —> This is the real aim of economic development!
Sources of Happiness:
> Recognition from others and Self-respect
> Material welfare plays only a limited role (and sometimes goes against happiness!)
> “Happiness is being in health, being out of debt, and having a clear conscience”
> Con ict between the wish to improve our life (engine of economic development) and ‘Tranquility
and Enjoyment’ as happiness
Adam Smith — Classical Economics Perspective:
> Commercial Society multiplies our needs and desires
> Commercial Society = Competitive capitalist economy
> This often depends on others’ opinions and are therefore never fully satiable
> Those multiplied needs and a constant pursuit of wealth are true engines of economic growth!
> Wealth is born out of poverty — from individual unhappiness to public happiness
(“Private vices are public bene ts”)
> Smith insists on individual happiness as the major concern of governments
This gives the following paradox:
> We have to be unhappy for the society to feel well
—> When dissatis ed, we innovate! (Fostering growth and happiness)
Solving this paradox:
> Smith: Liberty and Security promoted by the Commercial Society more important than wealth!
> Perfect happiness is unattainable, since we depend on others
>>> Smith — 'Preventing misery is more important than improving happiness!’
> So, it is crucial to look at how the government promotes happiness;
> Less misery means more safety and freedom from the direct dependence on others
> Good government, with them freedom and security, is the key to happiness according to Smith!
How to attain a good society?
> In a Commercial Society, both the rich and the poor enjoy Liberty and Security
> And thus, can be equally happy!
> Competition is important, this reduces the dependence on others
> The desire for luxuries is a salvation, ending the oppression of the lords (back in time)
> This, as an unintended consequence, increases happiness
==> What matters is that ‘Commercial Society’ delivers higher levels of liberty and security!
> So, with economic progress, we don’t get happier because we get richer, but we also don’t get
unhappier because of our pursuit of material welfare !
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