Economics of Happiness: Reflections from the 2010 World Economic Forum, Davos

Happiness is certainly real. But, unlike a bar of gold, the economics of happiness is not well understood. But it's not that hard.
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Is happiness real? Is it possible that happiness is a tangible asset whose value can be measured and quantified? Think about owning a bar of gold. Its value is simply a reflection of various macroeconomic variables. The gold bar is nothing more than a talismanic arbiter of global trade imbalances and inflationary pressures. So if there are the economics of gold why shouldn't there be the economics of happiness?

At Davos, I attended a dinner event where we discussed the economics of happiness. I listened to economists, a priest, a monk, a hedge fund manager and others speak from their perspective on the link between wealth and happiness. It seemed intuitive to me, that if having lots of money was the answer to happiness, than all rich people should be happy. We all know that isn't the case.

According to The Happy Planet Index - a measurement of life expectancy, life satisfaction and ecological footprint, the United States ranks as low as most of sub-Saharan Africa. In other words, consuming more than our share of resources doesn't make us happier, despite the fact that we live almost twice as long than those in sub-Saharan Africa who consume very little. Our roundtable discussion focused on the relationship between GDP and happiness, and all of us agreed that the two measures are related, but important qualitative measures mattered more, such as healthy relationships, job security, freedom to pursue our interests, security, and enough money to meet our basic needs.

Later in the week, I attended an event with Professor Mohammad Yunus, 2006 Nobel Peace Prize winner, at the Swiss Alpine High School in Davos. He talked with students about his work at Grameen and the concept of social businesses. I found wisdom in the simplicity of his words when he spoke about his belief that every human being has selfishness and selflessness inside of them. He implored the children to develop their selfless side and to think creatively, challenge the rules, and help find solutions for some of the world's biggest inequalities. His own joy and happiness seems deeply rooted in his ability to live according to those words, free of the need to accumulate wealth solely for personal gain.

Part of being human is to be disappointed and a major source of our disappointment is the failure to grasp that which makes us genuinely happy. Unlike the bar of gold, we don't know what happiness is worth because we don't know which variables influence its value. We achieve money, power and fame and are still miserable. We attempt to rise above the fray on the shoulders of those who have failed and hear the footsteps of those who are plotting to do the same. It's not that happiness isn't real, it's just that the economics of happiness are not well understood. But it's not that hard.

February is Black History month and if you want to know the secret to real happiness it's the answer to a question posed by Martin Luther King, Jr.: "Life's most persistent and urgent question is, "What are you doing for others?" That's how you measure real happiness, through the others you have stopped to help. The universal measure of real happiness is "the others." No one happy ever dies alone.

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