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Happiness Economics, Eudaimonia and Positive Psychology: From Happiness Economics to Flourishing Economics

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Abstract

A remarkable current development, happiness economics focuses on the relevance of people’s happiness in economic analyses. As this theory has been criticised for relying on an incomplete notion of happiness, this paper intends to support it with richer philosophical and psychological foundations. Specifically, it suggests that happiness economics should be based on Aristotle’s philosophical eudaimonia concept and on a modified version of ‘positive psychology’ that stresses human beings’ relational nature. First, this analysis describes happiness economics and its shortcomings. Next, it introduces Aristotle’s eudaimonia and takes a look at positive psychology with this lens, elaborating on the need to develop a new approach that goes beyond the economics of happiness: the economics of flourishing. Finally, the paper specifies some possible socio-economic objectives of a eudaimonic economics of happiness.

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Notes

  1. See, for example, Nussbaum (2005) for a comparison of happiness notions by Aristotle, Bentham and Mill.

  2. A recent complete survey is George MacKerron’s (2012).

  3. Davis (forthcoming) has recently proposed slight changes to Putnam’s arguments in order to apply them to economics.

  4. John M. Cooper, in Reason and Human Good, Harvard University Press, Cambridge (Mass..), 1975; Rosalind Hursthouse in ‘Virtue Ethics’ Stanford Encyclopedia of Philosophy, http://plato.stanford.edu/entries/ethics-virtue/, 2012, retrieved on May 2, 2013; Julia Annas, The Morality of Happiness, Oxford University Press, 1993, p. 44; John M. Finnis, Fundamentals of Ethics, Oxford University Press, Oxford, 1983, p. 8; and Fred D. Miller, Jr., Nature, Justice, and Rights in Aristotle’s Politics, Clarendon Press, Oxford, 1995, p. 19.

  5. Familiarized with Aristotle’s ideas, Amartya Sen has been careful to use the Greek term eudaimonia and not its usual translation as happiness. He realized that happiness was a very different thing for Aristotle and for Utilitarians. Eudaimonia is not a state of the mind, but an activity guided by reason. In The Standard of Living, Sen stated that ‘the breadth and richness of the Greek concept of eudaimonia may suggest similarly broad interpretations of happiness or pleasure’ (1987, p. 8). Richard Kraut (1979, p. 169) elaborated on the difficulties of translating eudaimonia and finally suggested just using this word, noting (1979, p. 170), ‘Aristotle thinks that the most eudaimon individual is someone who has fully developed and regularly exercises the various virtues of the soul, both intellectual and moral’.

  6. Early forms of Utilitarianism were hedonistic. On these forms, see, e.g., Irwin (2011, pp. 364–397).

  7. Crespo 2007 (p. 376) explains the Aristotelian distinction between a) ends that can be considered only as means and that are only pursued for the sake of something else (first-order or instrumental ends), b) ends that are desirable in themselves and are also pursued for the sake of the final end (second-order ends), and c) ends which are only desirable in themselves (third-order or final ends—usually known as eudaimonia or ‘happiness’). The following example is provided for greater clarity: we study for an exam (i.e. a means to an instrumental end) in order to graduate (a second-order end), in order to be happy (a final end) according to our life plan (designed by practical reason). Sen’s capabilities, for example, are second-order ends. Fowers (2012a) uses the term ‘instrumental’ to refer to goods in a) and ‘constitutive’ for goods in c), probably viewing goods in b) as ‘constitutive’ as well.

  8. We use the expression ‘relational’ in a broader sense than Martha Nussbaum (1986, Chapter 12), but this meaning does not discard the relevance for eudaimonia assigned by Nussbaum to the possession of ‘relational goods’ such as friendship, love, and political commitment. That is, we do not point only to the relational (and vulnerable) character of political relations, love and friendship, but to the root of these relational goods—i.e., the intrinsic relational character of human beings as ‘political animals’.

  9. On this, see Barker’s commentary (in Aristotle 1958, p. 8) and NE I, 7, 1097b 15–7. See also C. C. W. Taylor (1995, p. 237).

  10. Instead, Layard’s theory, in Seligman’s words, is ‘a naked monism’ (2011, p. 25).

  11. See van der Rijt (2013) for a review and analysis of the difficulties involved in this task.

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Acknowledgments

We acknowledge the comments of John B. Davis, Jorge Streb, and two anonymous referees. We are also grateful for the English editing of M. Donadini.

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Authors and Affiliations

  1. IAE (Universidad Austral) and Consejo Nacional de investigaciones Científicas y Técnicas (CONICET), Buenos Aires, Argentina

    Ricardo F. Crespo

  2. Centro Interdisciplinario de Investigaciones en Psicología Matemática y Experimental (CIIPME) and CONICET, Buenos Aires, Argentina

    Belén Mesurado

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Crespo, R.F., Mesurado, B. Happiness Economics, Eudaimonia and Positive Psychology: From Happiness Economics to Flourishing Economics. J Happiness Stud 16, 931–946 (2015). https://doi.org/10.1007/s10902-014-9541-4

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