The Economics Book

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.