… and the Pursuit of Happiness - Institute of Economic Affairs

… and the pursuit of happiness
happiness is not within the government’s remit
interference implicit in happiness economics. Clark and Lee
separate themselves clearly from utilitarianism as a generally
acceptable rule of morality and proceed to distinguish between
two types of duty-based morality: ‘magnanimous morality’ and
‘mundane morality’:
Magnanimous morality can best be defined in terms of
helping others in ways that satisfy three characteristics –
helping intentionally, doing so at a personal sacrifice, and
providing the help to identifiable beneficiaries … Mundane
morality can be described broadly as obeying the generally
accepted rules or norms of conduct such as telling the truth,
honouring your promises and contractual obligations,
respecting the property rights of others, and refraining from
intentionally harming others. (Ibid.: 3, 6)
Beneficence, Adam Smith said, referring to what Clark and
Lee call magnanimous morality: ‘… is less essential to the existence
of society than justice … Beneficence … is the ornament which
embellishes, not the foundation which supports the building …
Justice or mundane morality, on the contrary, is the main pillar
that upholds the whole edifice’ (1976 [1759]: 86).
Mundane morality, while being essential for the existence
of society, is much less attractive to ordinary people and in fact
often not recognised as morality at all. This is because, contrary to
magnanimous morality, mundane morality has three characteristics
that contrast with the three set out above: it is self-interested,
profitable – for both sides – and dispersed among anonymous
transactors. That is why, say the authors, Smith’s ‘invisible hand’
is so little regarded in ordinary discourse.
Now we can see why mundane morality is seen in such an
unfavourable light by people who do not recognise that it has
much more general and beneficent effects in society than personal
magnanimity. Thus, it shocks people to hear that Bill Gates or
Warren Buffet have done much more good in business than with
their charitable endeavours. In sum: ‘it is much easier to understand
the persistent criticism of markets, and of the invisible hand
justification for them, once the strong emotional attachment to
magnanimous morality is considered’ (Clark and Lee, 2011: 7–8).
The inevitable moral conflict at the heart of a free society
I will conclude this philosophical criticism of happiness economics
with a warning against the mistake of applying magnanimous
moral rules to the functioning of the economic market. An ethical
monism based on natural morality creates confusion in the
judgement of well-meaning people about the character of transactions
in the economic market, where ‘non-tuism’ mostly rules,
thus endangering liberty and interfering with capitalist progress.
Conversely, ethical monism is not permissible when trying to
apply free market ethics to personal intercourse. Clark and Lee
aptly quote Hayek (1988: 18) on this point:
If we were to apply the unmodified, uncurbed, rules of the
micro-cosmos (i.e., of the small band or troop, or of say, our
families) to the macro-cosmos (our wider civilization), as our
instincts and sentimental yearnings, often make us wish to do,
we would destroy it. Yet, if we were always to apply the rules of the
extended order to our more intimate groupings, we would crush
them. So we must learn to live in two sorts of worlds at once.
Happiness economics, which tries to extend a deficient
hedonic morality to the arrangements of an open society, must be
pronounced an unworkable project.
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