Economic Wisdom to Apply in Your Twenties

Chapter 85

Chapter 11 In your twenties, a happy life begins with an understanding of economics

Bernard Shaw said: "Economics is an art that makes people happy." Economists believe that the reason why people pursue happiness so persistently is because happiness can bring people utility, that is, physical and spiritual satisfaction.If happiness is also regarded as a commodity that can be consumed, happiness still cannot escape the doom of diminishing marginal utility.When we are enjoying a kind of happiness that we have finally obtained, in fact, the marginal utility that this kind of happiness brings to us is diminishing.When this sense of happiness gradually disappears, we will pursue another life goal or state of life, and then gain new happiness.

Section 1 Happiness is an Economic Proposition
Richard Layard is one of Britain's top economists today. He was once a member of Prime Minister Blair's advisory group and has served as a member of the House of Lords since 2000.Richard Layard has been advocating the "Happiness Healing Nation" and is known as the "Chief Happiness Economist" in the UK.In his 2005 English edition, The Economics of Unhappiness, he castigated "economics' disregard for happiness."He insisted that happiness is undoubtedly the only goal worth striving for in society. We must consider how modern civilization makes us unhappy, why we are not happy even if we have money, whether we want GDP or happiness, etc.

In 2006, my country introduced the book "Happiness and Economics" by Swiss economist Brenno S. Frey, which was highly praised by economists and the general public.This book establishes an empirical connection between economics and happiness, and between happiness and democracy. It integrates the findings and unique insights from the fields of psychology, sociology and political science into economic research. The effects of micro- and macroeconomic conditions on well-being in the form of , unemployment, and inflation.

Economics, which is closely related to our lives, once gave up attention to the concept of happiness.There are two reasons for this:

One is that "happiness" is taken for granted as a non-scientific concept, which is almost impossible to measure and discuss because of its too much subjectivity; Comprehensive discussion and research on platforms such as psychology, sociology, political science, and even philosophy is a big proposition that may never be conclusive.

Fortunately, there are still some insightful economists standing up and shouting for our happy life. The research results of Professor Kahneman and his collaborator Tufsky, who won the Nobel Prize in Economics in 2002, have confirmed the errors in some basic theories of traditional economics in many ways. Their new economics involves wealth and happiness in a broad sense .They believe that people should care about how to improve people's happiness itself, because what people are ultimately pursuing is happiness in life, not more money; it is not about maximizing wealth, but about maximizing people's happiness.

It should be said that Kahneman has corrected our consistent misunderstanding-many people once regarded wealth as a synonym for happiness.Kahneman helps us get back to our roots by arguing that our wealth is only one of the smaller factors that bring about happiness.In fact, happiness is determined by many other factors.

Pain, or happiness, is a feeling.On the platform of economic research, economists have no choice but to put happiness or pain together with quantifiable wealth.The study found that when people's income level is low, people's happiness increases with the increase of income; but when the income reaches a certain level, people's happiness no longer increases simultaneously with the further increase of income, but happiness is marginal with income. decrease.The economic explanation for this is the diminishing marginal utility of happiness.

Happiness is a psychological feeling, and it should be a psychological concept. Many psychologists prefer to call it "happiness".But happiness is a very vague thing. Introducing the perspective of economics into the study of happiness can make a more rational and objective statistical and quantitative analysis of happiness.Economists believe that happiness research has great potential, especially in economics, it can bring the pure number focus back to the people themselves, and return to the "economics of human behavior".Just as calculus was passed down and proved because engineers found it easy to use, empirical research on the factors that affect happiness will also be valuable.That might create a brighter outlook for economics.

Wisdom Pieces: The Five Laws of Happiness
　 The First Law of Happiness - Happiness is temporary.The happiness that people get is temporary, just like misfortune, as time goes by, happiness and unhappiness will gradually fade.Therefore, if we want to continue to have happiness, we must continue to satisfy more desires.

The Second Law of Happiness - The Diminishing Sense of Happiness.After people get a piece of happiness, their desire for the same or the same type of happiness will gradually decrease. When people obtain this or this type of happiness again, their sense of happiness will gradually decrease. When it reaches enough times, the desire will change. If it is zero, happiness will become zero.

　 The third law of happiness - the more tortuous people's experience of obtaining happiness, the greater the sense of happiness they get.Thirst is directly proportional to happiness.Therefore, if the experience of obtaining happiness is more tortuous, then people's desire will increase correspondingly, and the sense of happiness obtained will be greater.

　The Fourth Law of Happiness - Happiness requires feeling.Happiness requires feeling. If your desire has actually been satisfied, but when you don't feel or feel that your desire is satisfied, you still won't feel happy.

The Fifth Law of Happiness - The acquisition of happiness requires a pleasant mood.If your desire is satisfied, but if you are still immersed in the grief of other events at this time, then the feeling of satisfying your desire at this time is still difficult to obtain happiness.

(End of this chapter)