Economics Says… #2

Economics’ third pillar is the assumption that good policies increase the range of choices an individual can make. Economists’ enthusiasm for income is driven by the view that more wealth gives people more choices. Our enthusiasm for political freedom has the same source. Economists talk about good policies increasing “utility levels” which is often understood as suggesting that these policies will make people happier. Happiness is an important emotion, but there is no sense in which it is particularly related to economist’s definition of utility. Formally, higher level of utility is equivelent of having more options, not wearing a smile.

Glaeser, Edward L., “The Economic Approach to Cities”, pg 3.

So, yeah. Economics is not the path to happiness. Anyone who says otherwise is trying to sell you something. And they’re probably not an economist.

If you want to read about whether more choice leads to more happiness, I recommend Barry Schwartz’s The Paradox of Choice