Economic theory and happiness

Abstract

The general diffusion of any interesting idea is liable to generate a penumbra of popular misunderstandings and false assumptions, no matter how careful are those who promulgate that idea. The claim that increases in national income per head, beyond a certain minimum level, will give rise to no increase in human happiness is no less subject to this risk than any other challenging claim. In particular, it may come to be associated in popular thought with the notion that economists are bound to be surprised by such a claim, or even to regard it as a direct refutation of their most fundamental ideas. Any such notion is, of course, nonsense and ought to be exposed as such, both because truth is better than falsehood and because intelligent policy discussion about wellbeing can only be hindered by misperceptions of what economic theory does and does not have to say on this issue.