The Clarence Ayres Memorial Lecture: The Paradoxes of Happiness in an Old Institutionalist Perspective
In recent years, happiness research has become a strongly recognized new field of economic discourse. This contribution tries to delineate the insights and limitations of this research from a critical institutionalist vantage point. In a couple of articles on happiness research, Thorstein B. Veblen is mentioned. l The theoretical and intellectual affinity between Veblen's theory and path-breaking contributions in happiness research like Tibor Scitovsky's The Joyless Economy (1976), Fred Hirsch's The Social Limits to Growth (1976), and, for example, Robert Frank's Choosing the Right Pond (1985) is obvious. They are all skeptical about the assumption that changes in economic welfare indicate changes in social welfare in the same direction, if not in the same degree. Hirsch's positional goods underline Veblen's insight that economic value also depends on the relative position regarding, for example, the possessions of others. All recent authors refer to some degree to James Duesenberry, whose relative income hypothesis (1949) is directly derived from Veblen's theory of the leisure class. In this contribution I will focus on Veblen's analysis of the paradoxes of happiness in his major work on the leisure class, The Theory of the Leisure Class ([ 1899] 1994). It will be shown that Veblen can be assessed as a neglected founder of happiness research. I cannot describe happiness research in detail here.2 I will only mention the major finding of happiness research: in many countries real income has risen but self-reported subjective well-being has not (substantially) increased (Easterlin 2001). Its research strategy may be described as conceptual individualism; micro happiness functions are derived from the empirical-statistical measuring of the influences of variables on reported subjective statements of well-being.