Scott Sumner on Utility vs Happiness [Link]

by Nic_Smith 9y12th Jan 20111 min read15 comments

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A distinction that some people grok right away and some others may not realize exists:

Imagine a country called “Lanmindia,” where much of the population has seen its legs blown off in horrible accidents.  Does that sound like a pretty miserable place?  Happiness research suggests not.  The claim is that there is a sort of natural “set-point” for happiness, and that after winning a lottery one is happy for a short time, and then you revert right back to your natural happiness level.  I find that plausible.  They also claim that if someone loses a limb, then they are unhappy for a short period and then revert back to normal.  I find that implausible, but if the evidence says it is the case then I guess I need to accept that.

My claim is that although Lanmindia is just as happy as America, it has much lower utility.  Let’s define ’utility’ as ”that which people maximize.”  People very much don’t want to have their legs blown off, and hence emigrate from Lanmindia in droves.  People behave as if they care about utility, not happiness.

-Scott Sumner, "Nonsense on stilts: Part 1.  What if utility and happiness are unrelated?" TheMoneyIllusion

This is also somewhat a reply to Hanson's "Lift Up Your Eyes" on Overcoming Bias. Some people on LessWrong are careful to make the distinction between ordinal utility, cardinal utility, and fuzzies, and others aren't quite so much. The above sentence on accepting evidence and the post script that he is not serious about one part of the post might also make interesting conversation -- part two is advice to move next door to a child molester for cheaper housing if you don't have a kid and part three is about The Fed taking advantage of banks.