The Economics Book

(Barry) #1

216


THE AIM IS


TO MAXIMIZE


HAPPINESS,


NOT INCOME


THE ECONOMICS OF HAPPINESS


T


he first modern national
accounts for a country were
created for the US in
the 1930s by Russian-American
economist Simon Kuznets. His
pioneering work later led to the
creation of national accounts in the
UK, Germany, and other developed
countries. These accounts involved
summing up all the transactions
made in an economy over a year
to arrive at a figure for its national
income, which became known as
a country’s gross domestic product
(GDP). Early economists, such as
the Frenchman François Quesnay,
had attempted to derive similar
measures, but their efforts had
foundered due to the apparent

IN CONTEXT


FOCUS
Society and the economy

KEY THINKER
Richard Easterlin (1926– )

BEFORE
1861 John Stuart Mill argues
that a moral act is one that
maximizes overall happiness.

1932 Simon Kuznets publishes
the first national income
accounts for the US based
purely on conventional
economic variables.

AFTER
1997 British economist
Andrew Oswald argues
that joblessness is the main
reason for unhappiness.

2005 British economist
Richard Layard publishes
Happiness: Lessons from a
New Science, revisiting the
debate about the link between
happiness and income.
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