At a seminar hosted by economist John Saliforax, a professor at the American University, he addressed the audience about a new phenomenon in academia that some researchers have termed the ‘economics of happiness’. He began with an introduction about the failure of economic systems, particularly those in advanced nations, to deliver happiness to their people despite the growth and prosperity some of these countries enjoy. For instance, the standard of living has clearly risen over the past 50 years in most countries, whether developed or developing, and everyone seems to firmly believe that the higher an individual’s income, the greater their happiness.
However, psychologists over the last decade have repeatedly proven in their research that global happiness levels are in continuous decline, despite progress, growth, and the increasing demand for various forms of entertainment. This has prompted economists, albeit belatedly, to pay attention to these academically verified facts, which stand in stark contradiction to economic axioms, particularly capitalist ones, that individual happiness is achieved through maximising the fulfilment of consumer desires. This, of course, was supposed to be realised with rising individual incomes as a result of increased growth rates, fundamentally built on consumption. Yet, this did not happen, and the world has grown unhappier alongside economic growth.
As a result of these findings, some economists have begun developing new metrics inspired by psychology to measure such phenomena and apply them economically, hoping to arrive at new concepts capable of addressing this neglected aspect of economics. After all, the individual was supposed to be the central focus of economics, and their emotions should not be separated from market mechanisms.
He gave examples of importing concepts of illusory happiness, such as when an Egyptian, influenced by ‘cowboy’ culture, might start consuming jeans, believing that purchasing such products could bring them some form of happiness, as portrayed by the media and its advertisements. This occurs despite the cultural differences, which can sometimes be contradictory. However, happiness based on consumption is always driven by profit-seeking producers, regardless of anything else, and survival in this arena goes to those who can most quickly and deeply tap into the consumer’s emotions and manipulate them.
Saliforax’s discussion of this new economic trend came just weeks before the recent global crisis. At the time, he gave a powerful and compelling example of Iceland as an advanced economy experiencing notable growth. He added that the Icelandic people’s clear sense of identity and their adherence to it make them a formidable barrier against superficial consumerist trends that promise happiness but never deliver. He seemed deeply impressed by the Icelandic model and its remarkable success in finding the magical formula for growth that led to the nation’s prosperity without compromising its happiness curve.
However, after the crisis hit, Iceland, as we all witnessed on news channels, fell dramatically into the miserable quagmire of collapse—not just economically but also politically. The government resigned, including its prime minister, Geir Haarde. The country has since become one of the unhappiest in the world, with everyone failing to resolve its crisis. It is now burdened with internal and external debts that are difficult to repay, at least in the near term. Some have even begun using Iceland as an example of poor management, whereas it was once hailed as a model of ‘economic happiness’. Perhaps the reason is simply due to Saliforax and his ‘evil eye’, which struck the poor nation from the heart of Cairo all the way to near the North Pole where they live. But the blame also lies with them—not just for poor management but for forgetting to add a ‘blue bead’ to the Icelandic flag after they were once classified as the happiest nation in the world.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.