Economics Forsaken And The Return Of Happiness

Adam Smith(1723～1790) as a founder of Classic economics has two important works, one is"The Theory of the Moral Sentiments(1759)",the other is"An Inquiry into the Nature and Causes of the Wealth of Nations(1776)". In the middle of the 19th century, German Historical School put forward the"Smith puzzle", which is also called"Smith problem"or"Smith paradox". The puzzle is that there is a paradox between Smith's two important works above.Afterward, the different views of the Adam Smith Problem arose along with the development of theories and realities. Most scholars believe that there is or is not a conflict between Smith's two works. I think these views are reasonable, but my tutor Professor Hongchun Fu has another interpretation:"An Inquiry into the Nature and Causes of the Wealth of Nations"emphasizes the growth of wealth, while"The Theory of the Moral Sentiments"emphasizes the constraint on desire. According to Paul A.Samuelson's happiness formula:"Happiness=Consumption/Desire", the answer of"Smith puzzle"is happiness or happiness maximization.Why does the"Smith puzzle"exist? The reason is that economics abandon the research about happiness. In fact, since classic economics was founded, the happiness has been the core theme. But after Adam Smith more and more economists only pay attention to the wealth, almost forgetting the human happiness.Since 1960s, however, something new pertaining to human happiness has begun creeping into economic thought. It is making its way under the umbrella of"paradoxes of happiness". It leads to the return of happiness in economics. Among the economists focusing on human happiness, Amartya Sen and Daniel Kahneman won respectively the Nobel Memorial Prize in Economics in 1998 and 2002.