In defense of happiness


In this paper, I will make the argument that a self-interested rational person (and thereby all rational people) should strive to eliminate global income inequality in order to pursue the goal of happiness-maximizationTo stand up this high-level argument, I will make the following arguments in turn: 

(1) The goal of a self-interested rational person, and thereby the goal of all self-interested rational people, is to pursue happiness-maximization 

(2) Wealth is only valuable to happiness as a function of standard of living 

(3) Differences in standard of living functions result only from prior circumstances (not intrinsic qualities), but people are able to adapt to new standards given new circumstances 

(4Wealth, outside of the standard of living function, is only valuable as a proxy for goal-fulfillment 

(5) Disparities in wealth across individuals is bad for individuals, corporations, and society 

(6If wealth disparities are eliminatedthe negative drivers above will be reduced or eliminated 

(7A rational self-interested person should be interested in wealth only to the extent that it maximizes that person’s standard of living function 

(8A rational self-interested person should naturally seek to redistribute personal wealth exceeding his or her happiness maximization function in order to minimize those negative drivers above  

(9) Society, as a collection of rational self-interested persons, should naturally normalize wealth so that it satisfies an average standard of living function 


Part I: On The Philosophy of Wealth 

(1) The goal of all self-interested rational people is to pursue happiness-maximization 

To begin, I will argue that the goal of a rational self-interested person (abstractly, all rational self-interested people) is to pursue happiness-maximization. I will make this argument from the Utilitarian perspective. Utilitarianism holds that the ideal actions to pursue are those that maximize the utility of the actor and all stakeholders (decision constituents). This theoretical position most often relates utility to the well-being of decision constituents. I suggest that the spirit of well-being here is equivalent to happiness; therefore, the ideal actions to pursue are those that maximize the happiness of decision constituents. 




(2) Wealth is only valuable to happiness as a function of standard of living 

According to theories put forth by C.G. Jungreasonable standards of living and work satisfaction constitutes one of the five key drivers of happiness. This is the only driver that carries a wealth component in the form of standards of living.1 An individual will exert wealth to capture goods and services from other individuals such that the accumulation of these products satisfies the individual’s standard of living function. Therefore, wealth is only relevant to happiness as far as it is related to the satisfaction of the standard of living function. Standard of living functions seem to vary across individuals. 


(3) Differences in standard of living functions result only from prior circumstances 

I argue, however, that differences in standard of living functions result only from prior circumstances and that standards of living are just that: standards. Consider the following example. There are two people. The first is rich and always has been. He has become accustomed to servants, chefs, expensive things, and lavish holidays. The second is poor and always has been. He grew up in a village in South America and is used to doing things for himself or his communitySuppose the rich man suddenly becomes poor, and the poor man suddenly becomes rich. The formerly rich man’s new circumstances will never meet the standards set by his previous, but he is not guaranteed miseryThe formerly poor man, however, is set to new circumstances that will surely exceed those of his previousbut he is not guaranteed happiness. The standards of each of these men will adapt to his new circumstances. Only situations that exceed his new standard will bring him pleasure. 


(4) Wealth, outside of the standard of living function, is only valuable as a proxy for goal-fulfillment  

Wealth, however, is also valuable as a pre-purchasing mechanism for goal-fulfillment. It smooths your path to achieve extrinsic goals. Goals like starting a company or providing aid to the poor do not directly or necessarily improve your standard of living; however, latent capital in the form of accumulated personal wealth can make these activities easier. In these cases, though, personal wealth is not a pre-requisite – instead, it acts as a pre-purchased replacement for the effort of raising that capital from professional investors. 


Part II: On Relative Poverty and Inequality 

(5) Disparities in wealth across individuals is bad for individuals, society, and corporations 

Now that I have established that, relative to the goal of happiness-maximization: wealth is exclusively related to the standard of living happiness driver, the standard of living function is constructed from extrinsic circumstances, and wealth’s ability to act as pre-purchased effort is dissociated from happiness-maximization … I will argue that disparities in wealth across individuals is bad for individual well-being, societal health, and even corporate success. I will call out a specific example (that relative poverty results in mental illness in individuals), and then I will abstract upwards to generalize that relative poverty must result in other negative effects as well. 

I begin by pointing out that, beyond the obvious negative impacts of relative poverty on individual well-being (infant mortality, retardation, learning disabilities, substance abuse, physical abuse, …), relative poverty also results in severe mental illness and suicide.2 Strong relationships exist between the degree of income inequality in a country and the rates of mental illness in that country, and the odds ratio of an unemployed person committing suicide relative to employed persons is as much as 2.5-to-1. The role of poverty in mental health problems is well established. Although the relatively rich are not exposed directly to this negative driver, it has consequences that extend beyond the individuals which it effects. 

Society often becomes responsible for supporting those individuals with mental illness. Many of these individuals have limited or no ability to support themselves without constant medical care or mandatory medication reminders. The United States, for example, used to run asylums for the institutional care of just these persons. Recently, these asylums have been closing. In the absence of state asylums, America’s prisons have accepted hundreds of thousands of individuals with mental illnesses; these prisons have become mental asylums offering extensive services including nurses, medical care and medicine, psychiatrists, and even appropriate security measures. Regardless of whether care is administered in asylums or prisons, this care comes at a cost. The systems that support these mentally ill individuals require funds from society – funds that could be dedicated to other uses in the absence of such high rates of mental illness.  

Beyond the aforementioned negative impacts on individual and societal welfare, corporations also suffer. These entities miss out on the marginal supply and demand that would exist if these individuals were not institutionalized.3 Certain kinds of mental illness disqualify or render individuals unfit to work in some or all roles at a corporation. This reduces the supply of labor and thereby increases every corporation’s cost structure, which in turn reduces corporate excess returns to stockholders. This also has impacts on the demand side. Because some of these individuals are outside of the workforce, they have no earnings with which to purchase goods and services.  

I now want to abstract more generally to the overall negative impact of relative poverty and inequality. On the basis of inductive reasoning, I believe it is fair to make the following point. In light of the clear evidence pointing to inequality as a driver of mental illness, and the impact of these individual negative effects on both society and corporations… there must exist other negative individual effects of inequality that similarly realize negative impacts on society and corporations. 


(6) If wealth disparities are eliminated, the negative drivers above will also be eliminated or reduced 

According to the inductive reasoning held above, these negative drivers result from the existence of relative poverty and inequality in society. Naturally, if the underlying risk factor (wealth disparity) for these negative drivers (e.g. mental illness) were to be eliminated (wealth normalization) … the negative drivers would be reduced by approximately the degree to which this particular risk factor results in the same.  


Part III: On The Normalization of Wealth

(7) A self-interested person should be interested in personal wealth only to the extent that it maximizes his or her standard of living function 

Allow me to briefly set aside the topic of wealth disparity in favor of the argument above. The goal of a self-interested, rational human being is to maximize her happiness. In accordance with the argument put forth in section (2), wealth is only valuable to happiness as a function of standard of living. This standard of living function, according to section (3), results from extrinsic circumstances. Now suppose a self-interested, rational person recognizes and accepts these two propositions. To that individualwealth should only contain value such that it maximizes her standard of living function, and thereby maximizes her happiness function according to that input. This person should no longer be interested in personal wealth beyond this happiness-maximized level. Instead she would choose to spend time and energy to maximize the other happiness drivers set forth by Jung. 


(8) A self-interested person should redistribute personal wealth that exceeds her happiness-maximization point 

Given that our rational self-interested person would recognize that personal wealth exceeding her standard of living happiness-maximization point is of no value to her goal as a human being, she would naturally seek to use excess wealth in accordance with her decision framework. Suppose she is a communal utilitarian – the greatest good for the greatest number. With the definition of good set to the goal of a human being (happiness-maximization), she would distribute her wealth beyond her own happiness-maximized point to those who have the least. Now suppose she is a Kantian – to act in accordance with your duty, and your duty is the categorical imperativeIf she were in the position of poverty, she would surely wish that someone would give to her wealth so that she may reach her standard of living happiness-maximization point … to give all humanity the guarantee to maximize even one of their happiness factors. In this case, she is morally obligated to give her excess wealth to those unfulfilled peopleSuppose even that she is a hedonistic utilitarian – the greatest individual good. As a rational human, she would recognize the uselessness of the excess wealth to her personal happiness, and thereby distribute it freely.  


(9) Society, as a collection of rational self-interested persons, would naturally normalize wealth  

According to the analysis section (8)any individual rational self-interested person would distribute wealth in excess of that individual’s standard of living happiness-maximization point. Given the argument in section (3) that each individual has formed a standard of living function resulting from his or her circumstances, each individual would find his or her marginal excess dollar at a different sum total of wealth. The world would look much like it does today: with inequality according to each individual’s standard of living. The rational self-interested person, however, would recognize that variation in standard of living functions inherently presupposes wealth disparity – these two concepts are naturally tied together. By the argument in section (3)an individual’s circumstantial and predefined standard of living function is actually dissociated from her happiness. In this case, global standardization of wealth equality is possibleevery rational self-interested person would recognize that (i) their own standard of living function is circumstantial, (ii) elimination of wealth inequality is possible, (iii) through elimination of wealth inequality, future standard of living functions will be invariant, and thereby (iv) global satisfaction of standard of living functions to provide for happiness-maximization of all persons is possible. 



This paper made the argument that wealth is only valuable to satisfaction of circumstantial standard of living functions in pursuit of the goal of a human being (happiness-maximization). It went on to point out that relative poverty and inequality result in negative effects for individuals, society, and corporations and that, by eliminating inequality, these negative effects will be reduced commensurate to the degree to which inequality is a driver of the same. It further synthesized that, given the aforementioned arguments, rational individuals would recognize the inherent contradiction of variant standard of living functions and would be interested in wealth only to the extent that such wealth provided marginal gains in happiness – that is, to a normalized standard of living function. I believe that further analysis should be done on the impact, if any, of wealth on the other four Jungian factors of happiness. I further believe that, given that society has not yet normalized wealth, we should question either the validity of the arguments here or the prompt’s presupposition of the existence of rational self-interested person. 



[1] Some of Jung’s other happiness factors may also carry a wealth component, but the connection to standards of living is more obvious; I pass over an investigation of the alternatives in this paper on the basis of space concerns.

[2] n.b. good physical and mental health is one of Jung’s factors of happiness.

[3] I believe that it is fair to claim (along the lines of the broken window theory) that the incremental loss of work for those workers that operate within the support system (nurses, psychiatrists, etc.) would be a loss of non-productive work. This, incidentally, would reduce the demand for such workers and provide an even greater spur to the supply-side of the productive workforce than would be anticipated given estimates based on the mentally ill alone.