ssrn-id1233400 - The Principle of Greatest Happiness in...

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Electronic copy available at: The Principle of Greatest Happiness in Western Economic Thought and its Relation to Buddhist Economics by Georg Erber 1 Preliminary: Do not quote without permission Abstract: Western economic thinkers in the 19 th century rediscovered the principle of greatest happiness (PGH). However, as Eastern philosophical and religious thinking shows it was part of common knowledge in Buddhism and Hinduism over the past millennia. PGH did not have the same agenda as later on utilitarism of John Stanley Jevons, with the utility maximization principle (UMP) of individuals disconnected from the rest of the society. The UMP was more an outcome of a fusion between moral ethical thinking as a social phenomenon with the Newtonian principles of mechanics based on differential calculus. The huge success of natural sciences in the 19 th century during the industrial revolution was too tempting not to imitate its methodologies and concepts in the social sciences as social physics (SP). This kind of approach still has many followers unsurprisingly in the natural science community nowadays. The paper studies these interconnections between these different strands of Western thinking which lead after a century to the neoclassical paradigm in economics which took the UMP as its foundation for economic analysis. Richard Layard, an English labour economist, pointed out among others by empirical research that wellbeing or happiness is not significantly correlated with an ever increasing material wealth. Here might emerge a bridge between Buddhist economics and the recent rediscovery of the PGH in modern Western economics. The paper will close with the suggestion of some first possible corrections necessary for UMP to obtain a PGH consistent with the current challenges to the global society. 1 Address: Dr. Georg Erber, German Institute for Economic Research – DIW Berlin, Mohrenstrasse 58, 10117 Berlin, Germany, phone: +49-30-89789697, Fax: -103, e-mail: [email protected] .
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Electronic copy available at: 1 Introduction Research on happiness has become a highly debated research topic in the West over the last couple of years. Searching the IDEAS-database database of research papers and publications in economics - for the keyword happiness, one ends up with more than 1000 hits. This has not been the case ten years ago. The significant growth of income in the West over the last two centuries and in particular after WWII has led to new questions concerning the aims of economic activity. Furthermore the environmental crisis and the prospect of significant climate change caused by excessive use of global resources in particular of energy and natural resources point again towards the need not to exhaust the resource base (Stern 2007; Barney 1980; Meadows, Meadows 1972). Limits towards resource based growth become a key concern in the global policy agenda even if the studies quoted leave lots of
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This note was uploaded on 10/24/2011 for the course SCIENCE PHY 453 taught by Professor Barnard during the Winter '11 term at BYU.

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ssrn-id1233400 - The Principle of Greatest Happiness in...

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