Martin Schmalz is Professor of Public Finance at Oxford University. He blogs at viewfromoxford.com.
Dusseldorf We are in the midst of a global mental health crisis. Economists – even those who are “happiness economists” concerned with life satisfaction and wellbeing – are far from providing solutions. Perhaps the subject is too young to be expected?
I think the diagnosis is worse: I fear that we economists are part of the problem – by the way we have been teaching students for generations that the way we think is the right one, and not just about economics, but also about life in general.
At least that’s how it looks from the perspective of Far Eastern traditions, which look back on a history of research into wellbeing that goes back thousands of years. A basis of human well-being in yogic philosophy is the commandment not to harm other beings.
In stark contrast, in mainstream economics it is simply a question of legality and price whether it is reasonable for individuals to impose “negative externalities” on others, that is, to harm them.
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A yogi or a Buddhist, on the other hand, knows that it is almost impossible to maintain an emotional-spiritual balance on such a shaky foundation. For them, the first to be harmed by an unwholesome act are the doers themselves.
A second example: in economics, we try to think in terms of opportunity costs: “If I didn’t read this column, what could I do with my time instead?” “If I gave up my job, how much could I earn in someone else ? “” Who could I get together with if I left my partner? “
Thinking in alternatives causes suffering
This mindset contradicts the basic understanding of Eastern traditions that happiness lies in accepting and appreciating the experience of the moment. Thinking in alternatives is the direct cause of suffering.
Our advanced teachings make matters worse. Benefits maximization considerations about whether different potential love partners are substitutes or complementary goods – that is, whether we achieve a greater or lesser benefit with two partners than with just one – are not conducive to harmonious interpersonal relationships.
So the mindsets that lead to economic success seem to contradict those that lead to mental and emotional well-being. It’s not about which way of thinking is right or wrong, but about which way of thinking is useful for achieving different goals.
Perhaps we should provide this warning notice to our students and other audiences.
More: US economists dare a head-on attack on happiness research