In Chapter 13, Happiness, Well-being, and Capabilities, Sen concentrates on three issues. The first is the success of economics as a discipline in accounting for happiness and its importance. The second is the relationship between happiness and capability. The third is the relationship between capability and well-being.
Turning to the first issue, welfare economics is the discipline devoted to the assessment of the goodness of states of affairs and policies. According to Sen, it has been and largely remains utilitarian in character. Happiness is often understood as the sole determinant of human well-being/advantage and as the sole criterion for evaluating societies and policies. Well-being/advantage is usually defined in terms of utility. Utility is defined as happiness. Happiness is understood as desire-fulfillment. Policy evaluations are based on a comparison of the “sum total of individual welfares.” Many economists hold that interpersonal comparisons of utility are impossible.
Sen advances three criticisms of welfare economics. First, Sen argues that the new welfare economists are mistaken to think that interpersonal comparisons of utility are impossible. We can, Sen argues, get general agreement on partial orderings of the joy and pain in different lives. Second, the informational basis of well-being/advantage in welfare economics is incomplete. It should be broadened to include factors such as substantive opportunities, negative freedoms, and human rights. Omitting this information prevents us from making important distinctions in our judgments of the relative advantage of individuals who enjoy the same level of happiness, but differ dramatically along these other dimensions. Omitting this information also leads to distorted assessments. Individuals who are persistently deprived may adapt to their circumstances to make life tolerable, learning to “take pleasure in small mercies” and refusing to desire or hope for change in their circumstances. If we assess the well-being/advantage of such individuals on the basis of their happiness alone, then we would fail to get an accurate picture of their actual disadvantage. Third, Sen argues that contemporary welfare economists fail to sufficiently recognize the limits of using a monetary metric to gauge utility or happiness. Sen references empirical evidence suggesting that there is not a direct correlation between increasing wealth and increasing happiness and the joylessness of the lives of individuals in prosperous economies.
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