The "three happiness" and public policy

In this chapter, we will explore the nature of happiness and its determinants, and in particular the kind of institutions most likely to enhance happiness. Section II will argue that utility in Bentham’s sense is not happiness. Section III will present a theory of happiness and propose a framework involving a “forward looking happiness”, a “happiness in process”, and finally a “backward looking happiness”. Section IV uses this framework to explain some paradoxes that have been referred to by various happiness scholars. Section V then goes on to examine some policy implications of the framework. Here I shall argue that policy design should aim at maximizing the ex ante welfare of the representative individual, rather than “maximizing the greatest happiness of the greatest number” as advocated by Bentham, and I shall relate ex ante welfare to Rawlsian justice as well as to the concept of “residual risk”, which is the risk one gets exposed to involuntarily. Finally, section VI argues that “conflict resolution”, both internal within one’s mind and external in terms of relating harmoniously to other individuals will enhance happiness and we define such a holistic attitude to life “spiritual practice.” Thus “spiritual practice” is not mystical or “other worldly” at all. Rather it just entails overcoming one’s own weaknesses and handicaps, developing one’s full potential, and taking a holistic view of one’s life instead of being excessively concerned about marginal gains and marginal losses of the moment. This “transcendental attitude” would seem to be directly in conflict with economic principles of maximization but in a natural development as one becomes more mature and developed spiritually over time.