The Principle of Greatest Happiness in Western Economic Thought and its Relation to Buddhist Economics
20 Pages Posted: 18 Aug 2008
Date Written: August 18, 2008
Western economic thinkers in the 19th 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 19th 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.
Keywords: Utility function, Happiness function, Time allocation, Markov Chain Monte Carlo, MCMC
JEL Classification: B12, B13, B16, D01, D83,
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