The Trojan Horse of ‘Happiness Research’
by Thomas J. DiLorenzo
A very large literature has built up over the past several decades in the area of so-called “happiness research.” Such research is based on several very dubious assumptions: namely, that utility is cardinal and measurable after all; that interpersonal utility comparisons can therefore be made; and that the great unicorn of economic theory – the “social welfare function” – has finally been spotted. Armed with these assertions, socialists around the world believe they have finally discovered their holy grail. Now that governments supposedly know with “scientific certainty” what constitutes “happiness,” there can be no argument (or so they think) against virtually unlimited government intervention in the name of creating happiness.
Affluence is actually a disease that generates massive unhappiness, says the Australian author of a popular book in this field, entitled Affluenza. The government of Brazil is in the process of enshrining this notion into its constitution, and similar movements exist in Great Britain and other countries.
These assumptions rest on the proclamation that public-opinion surveys are sufficient measures of cardinal utility. The economists who make such assumptions studiously ignore all of the reasons why economists have disavowed such practices – especially the notion of demonstrated preference – for generations. As Murray Rothbard explained in his essay, “Toward a Reconstruction of Utility and Welfare Economics,”
The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. … This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis.
Rothbard continued to explain the folly of relying on public opinion surveys, as opposed to the actual demonstrated preferences of economic decision makers: