Faust and Job: The Dual Facets of Happiness

Abstract

This paper advances two interrelated theses. As for the first thesis, it distinguishes well-being, on the one hand, from happiness, on the other hand. As for the second thesis, it differentiates between two important facets of happiness: what this paper calls “happiness-as-tranquility” and “happiness-as-aspiration”. Actually, in order to differentiate the two facets of happiness, we first need to distinguish happiness from well-being. This is the case because happiness, after all, is a by-product of reflecting upon and ruminating over well-being. Given it is the same well-being, how could it give rise to different facets of happiness? It can only do so if we stop conflating happiness with well-being. This entails taking to task the widely accepted concept of “subjective wellbeing”. Such concept is expressly designed to obfuscate the difference between well-being and happiness. As for the two facets of happiness (the second thesis), this paper relies upon the contrast of two famous works of literature: the story of Job and the story of Faust. The contrast uncovers the criticality of the temporal dimension in the acts of reflection upon and rumination over well-being. If people reflect on past accomplishments, they experience backward-looking happiness along the Job story—i.e., happiness-as-tranquility. If people reflect on desire, they experience forward-looking happiness along the Faust story—i.e., happiness-as-aspiration. While the two facets of happiness seem contradictory, they are indeed complementary if we recognize the temporal element when one reflects upon and ruminates over well-being.

1. Introduction

This paper uncovers two facets of happiness: what it calls “happiness-as-tranquility” and “happiness-as-aspiration”. While happiness-as-tranquility typifies the human tendency to accept the well-being that their past has handed them, happiness-as-aspiration characterizes the human tendency to seek, as long as without excess or exaggeration, a higher goal in the future. The two facets of happiness stem from different reflections upon the same well-being—whereas “well-being” is equivalent to the economist’s concept of “utility” or “welfare” that is called here (pecuniary) “substantive satisfaction”. The fact that the same well-being gives rise to two facets of happiness must entail the proposition that happiness differs from well-being. Indeed, this paper advances two interrelated theses:

Two Interrelated Core Theses: In the first thesis, there are two facets of happiness that arise, nonetheless, from the same well-being. In the second thesis, given that there are two facets of happiness arising from the same well-being, happiness must differ from well-being.

Everyday people and probably most thinkers find the second thesis, viz., the well-being/happiness distinction, to be intuitive, if not utterly obvious. Therefore, those everyday people and most thinkers are up for a surprise: most of the happiness studies and psychology literature employ and unquestionably endorse the “subjective well-being” concept—a concept expressly designed to obliterate at first approximation the difference between the two gauges of human satisfaction—well-being and happiness. This paper must question, if not confront, the subjective well-being concept in order to establish the first thesis regarding the two facets of happiness.1

Otherwise, if we go along with the literature and conflate well-being and happiness, it would be difficult to explain, not to mention identify, the two facets of happiness. If well-being and happiness denote the same thing, how could well-being give rise to two (and probably more) facets of happiness?

To support the first thesis regarding the two facets of happiness, this paper leans on two famous works of literature: The Old Testament’s The Book of Job and Goethe’s Faust. While The Book of Job expounds the virtue of happiness-as-tranquility, Faust alerts humans of the inescapable happiness-as-aspiration. The Book of Job demonstrates how happiness-as-tranquility arises if Job accepts his fortune (or in fact misfortune) when he ruminates and reflects upon his current well-being as better than being dead. Faust demonstrates how happiness-as-aspiration arises if Faust does not desire a future well-being that is excessively greater than his current/predicted one. The reason why the same satisfaction (i.e., well-being) gives rise to one or the other facet of happiness is that the decision maker employs different contexts when one ruminate/reflect upon current/predicted well-being—or what this paper aims to establish.

The proposed well-being/happiness distinction is premised on a view of how “contexts” per se function. When the decision maker employs a context in the act of rumination and reflection upon well-being, the context is not another element of the well-being set. A context rather functions as the ground while well-being acts as the figure—as exemplified in Rubin’s vase [4]. The act of rumination and reflection is not a simple psychological process. It is rather a complex process in the sense of expressing two-level constituents: substantive matter or well-being operates at the primitive level, i.e., as the figure in Rubin’s base, while the context operates at a secondary level, i.e., as the ground in Rubin’s vase. This paper promises to show how happiness is the by-product feeling arising from such complex operation at these two levels. Thus, happiness is a context-dependent emotion, whereas well-being is a simple (primitive) feeling in the sense of being a context-free emotion.

So what—what is the payoff of the distinction between two facets happiness and the corollary well-being/happiness distinction? This paper shows that the distinction between the two facets of happiness promises to solve the well-known income–happiness paradox, known in the literature the “Easterlin paradox” [5,6]. While one set of data demonstrates that the increase in well-being (as proxied by income) leads to an increase in happiness, another set of data demonstrates that there is relation between well-being and happiness [7,8]. To resolve this apparent contradiction (the paradox), we need to identify the two facets of happiness and, consequently, distinguish happiness from well-being.

Section 2 discusses the two works of literature, Faust and The Book of Job. Section 3 lays out the conceptual framework that allows us, first, to distinguish well-being from happiness and, second, to delineate the two facets of happiness. Section 4 draws some implications, most importantly regarding the Easterlin paradox. Section 5 concludes.

2. Two Works of Literature

2.1. Faust

In Faust, Goethe [9] captures the source of human unhappiness. As Faust grows old, he is frustrated with his life. At the bottom of the frustration, as Reginster [10,11] aptly argues, is the problem of boredom. Boredom can be seen as a mild form of depression, where the individual lacks aspirations, intrinsic motivations, and appetites for everyday amusements. When one is bored, it is not that one’s life is empty of goals to aspire to, but rather that one’s life is empty of the appetite to aspire.

Once Mephistopheles, the devil, becomes aware of Faust’s boredom, he offers him a bargain. Faust is so unhappy with boredom that he accepts. Namely, Mephistopheles will re-energize Faust’s life with the “aspiration to aspire” and even act as his servant to facilitate the aspiration. The aspiration would make Faust happy, However, if Faust becomes obsessed with the aspiration, i.e., if Faust begins treating achievement as a fetish, he will die and become the servant of the devil in Hell. The death symbolizes obsession, where one cannot live without living for the goal, losing his own soul and happiness in the process.

The lack of the “appetite to aspire” is so unbearable that almost everyone (including Faust) would be ready to accept the devil’s offer. Humans are ready to take the risk of becoming a slave to the aspired goal.

However, why is it so risky to pursue an aspired goal? Why does the pursuit might give rise to enormous misery, i.e., the risk of becoming the “devil’s servant in Hell” or “losing one’s soul”? The misery is not a sudden issue that arises, say, toward the end of one’s pursuit. It is rather a common feature of any pursuit. When one pursues a goal, it means that there is a gap between predicted and aspired well-being. This gap usually gives rise to misery at the start, i.e., prior to exerting the self to bridge the gap. And the individual is usually ready to tolerate present misery—as long as the misery is less than the exhilaration occasioned by the projected aspired goal.

This misery and exhilaration are emotions in the present. They differ from what the decision maker will feel in the future. Standing in the present, the decision maker designs a goal that promises, given the best information available to him or her, to lift well-being above the predicted well-being. The predicted well-being is more -or- less similar to current well-being if the decision maker does not aspire to any goal. The current/predicted well-being does not depend on aspiration-based effort. It might be impacted by surprises, i.e., the actual shock events that take place along the way.

What concerns us is the present, as the present is the stage for the emotions that motivate or may not motivate the decision maker to aspire, i.e., to construct a gap between the predicted well-being and the aspired well-being. Despite the misery occasioned by the gap, the aspired goal gives rise, as stated above, to exhilaration. Haidt [12] (Ch. 5) calls such exhilaration the “progress principle” to signify that happiness arises from the pursuit of a goal. It is another matter of what the decision maker feels about the attainment or the failure to attain the goal.

However, what escapes Haidt, what is stated above, is that the pursuit entails misery. The pursuit makes it clear to individuals that they lack the aspired goal—i.e., a gap that occasions misery.

A problem arises when such gap become serious, i.e., when the misery aspect exceeds the exhilaration that the aspiration occasions. In this case, the individual would be obsessed with the goal to the point of making one unhappy; it amounts to surrendering the soul to the devil, as is the risk that Faust faces.

One perplexing aspect of aspiration is that it cannot make the gap disappear. Making the gap disappear would be an impossibility. The individual must live with the gap. As individuals reach a goal, they must aspire to reach another. If they stop at one goal, and aspire no longer, it will most likely invite boredom, the initial state of Faust. In short, to avoid boredom, Faust must live with the irradicable gap, a manageable amount of misery. The struggle facing Faust is to prevent the growth of the gap to the point of robbing him of happiness, i.e., to the point where the misery exceeds the exhilaration.

The gap expresses the dialectical nature of happiness-as-aspiration that Faust highlights. While the aspiration is exhilarating, it is simultaneously painful. The individual must balance the inextricable misery and its dialectical opposite, exhilaration. Such double-edged sword of desire is the child of happiness-as-aspiration. The task facing Faust is challenging: how can he choose the “appetite to aspire” to avoid boredom and depression—while avoiding the excessive misery arising from becoming obsessed with aspiration?

2.2. The Book of Job

As widely and commonly understood, The Book of Job is about theodicy, i.e., justifying God. And there is a great need to justify God. If God is omnipotent and omnibenevolent, how come God allows suffering in the world—what is known as “the problem of evil”?

The story of Job illustrates the problem of evil. Job acted prudently, managed his large estate carefully, and treated his servants fairly and generously [13,14,15]. As Job praised God and obeyed his laws, he became very rich, and he thought this was a reward for being an obedient servant. Hence, he was utterly confused when disaster after disaster visited him and his loved ones. Job first lost his immense wealth of cattle; then lost his servants and children; and finally, together with his wife, lost health. Given that Job observed his part of the bargain and was met with “unjust” punishment, he felt that God betrayed him. He came very close to disowning God in return [16]. Indeed, Job’s wife urged him to disown God.

Wong and McDonald [17] characterize such an emotional state as “tragic optimism”: how infinite trust of other people (or the trust in God in the case of Job) is “rewarded” by betrayal, loss of wealth, sickness, and other calamities. It is often the case that the victim of abuse suffers from “traffic optimism”, as the abuse is leveled by people that the victim has trusted infinitely.

Should the individual turn his disappointment with God into bitterness, which amounts to cursing faith in the goodness of people in general? Job’s four friends—namely, Zofar, Bildad, Eliphaz, and Elihu—advised him to avoid bitterness. They furnished different arguments in God’s defense. The Book of Job, however, favors one argument, the one advanced by Elihu, the youngest of the four friends. Elihu’s argument is reserved to the end of The Book of Job, as if it is the final word. Also, the name “Elihu” greatly resembles “Elohim” (Hebrew: God), the God of the ancient Israelites. In addition, Elihu explicitly criticized the arguments of the other three friends of Job for reasons that we need not discuss in this paper [18]. It is sufficient to state, however, that Elihu basically highlighted that God is not perfectly omnipotent as the other three friends have argued. There is so much suffering happening in the world, including the suffering of nonhuman animals, which God does not actually control.

This should not mean that God is totally absent from the life of humans. For example, a man might be at his death bed. If there is an angel beside him, one angel out of a thousand, the angel may plead his case in front of God [19] (verse 33:23). God can be gracious and say “spare him from corruption” [19] (verse 33:24). Then, the man’s flesh is restored [19] (verse 33:25). However, and here is the critical point, God does not intervene on a daily basis. God restores the light of life “twice, three times, in his dealings with a person” [19] (verse 33:29). Maimonides [20] calls these interventions, which are aided by the angels, “miracles.” Following Maimonides, a person experiences a miracle twice or three times during one’s life.

The point is that God is not responsible for the calamities from which humans may suffer. The calamities are rather the product of random processes, what economists call “stochastic mechanisms.” However, God can cancel the consequences of a calamity or two in one’s long life. God has limited power. God generally does intervene in each one’s life—and only does so after the pleading of an angel.

Given that Job’s calamity is the product of stochastic mechanisms, Elihu suggests that Job cannot be angry with God. The calamity could not have been prevented via greater piety—or more judiciousness and prudence. This brings some solace, as it refutes any notion of some global system of justice allocating disasters according to piety, judiciousness, and prudence.

Indeed, Elihu asks Job to think of a counterfactual that is worse than the realized state of nature: Job and his wife can be dead. As long as they breathe, they are enjoying the gift of life. Thus, Job should be grateful for his good fortune. This is similar to imagining the counterfactual of losing five fingers in an accident, when one actually has lost only two. With such a counterfactual, one would experience happiness, happiness-as-tranquility. Job and all of us should be grateful for whatever little well-being we have, no matter how miniscule. We should suppress the tendency of our disappointments with outcomes to turn into bitterness, whining, and self-pity.

The upholding of a worse counterfactual than the present can be interpreted as remaining faithful. Job had to exercise a tremendous will. He had to temper his expectations. He had to think hard and fix his imagination on a counterfactual that is worse than current well-being. He could have easily slipped into anger and bitterness, which arise from upholding a counterfactual that is better than current well-being, one of wealth, children, and health. That is, upholding a worse counterfactual is the outcome of faith or, which is the same thing, faith gives him the strength to uphold a worse counterfactual than the present well-being.

Elihu’s argument is reminiscent of the mindset of people who succeed in withstanding setbacks in their lives. These people do not resort to self-pity, a mindset that would only push them down the slippery slope of anger and bitterness toward the world. These people, as Elihu is urging Job to do, manage to escape the ego-centered mindset, i.e., thinking they are the target of misfortune. Thus, the problem of evil is not restricted to theodicy or other-worldly intellectual endeavors. This should suggest, what cannot be explored here, that theodicy is not a separate intellectual endeavor divorced from social science theories of well-being, happiness, and the role of chance.

To reconstruct Elihu’s argument along with the framework of social science theories, specifically the notion of context-based evaluation [21], Job is using a counterfactual that is worse than the present well-being as a context. Job’s feeling of happiness is happiness-as-tranquility insofar as he succeeds using a counterfactual that is worse than the present calamity. The used counterfactual (the death counterfactual context) is a gain frame, as the fact that one is alive is a gain compared to the state of death. If Job has used the loss frame, i.e., the counterfactual of enormous wealth and health, he would be angry, if not bitter, which is contrary to happiness-as-tranquility.

2.3. Comparison

In The Book of Job, the time-frame is backward-looking: The decision maker can either use a real factual event or an imagined counterfactual event against which to evaluate the present. If the decision maker is unsatisfied with the present, one could employ a worse counterfactual than what has actually taken place in order to experience happiness, i.e., happiness-as-tranquility. The imagined worse counterfactual, such as being dead, makes the painful present tolerable if not celebrated.

In Faust, the time-frame is forward-looking: The decision maker imagines an aspired goal against which to evaluate the realized present that is the basis of predicted well-being. Given that the aspired goal diverge from the predicted path, it is appropriate to coin it “reversed-counterfactual.”

In The Book of Job, Job is standing in the present and assessing current well-being by looking at it from a factual event—or from an imagined counterfactual that could have taken place in the past but did not. In Faust, Faust is also standing in the present and assessing predicted well-being by looking at it from an imagined reversed-counterfactual—a counterfactual that still could take place in the future but is contrary to the normal or predicted well-being.

According to Safire [22] regarding the Biblical story, Job has led a pious life, treating his servants justly and fearing God in all actions. Job expected, out of a belief in the justness of God, that God would take care of him. Instead, he was struck by calamities stripping him from his wealth and causing him to lose his servants and children to sickness. He was tempted to curse God, but his youngest friend, Elihu, articulated the most convincing ground for why he should stay faithful to God. If humans compare their current well-being after a calamity to a better well-being in the past, they become frustrated, if not bitter and angry. However, if humans, even after a calamity, compare their current well-being to a worse one, the current suffering would not be conceived as horrible or a justifiable reason to become bitter and angry. On the contrary, they might be thankful that the calamity was rather limited to the loss, say, of five children rather than the loss of all seven children.

As Elihu reminds Job, a worse counterfactual is death. Hence, Job should praise the Lord for the gift of life. He should learn to accept his current bad luck, be patient, and avoid bitterness no matter the severity of the calamities he has encountered. For many people, Elihu’s consolation is no consolation, as death is better than staying alive with the memory of the lost wealth and the death of the servants and the children. However, for others, such as Job, the feeling of being alive was a gift and, hence, he was ready to thank the Lord for such a gift.

According to Kolenda [23] regarding the Faustian story, Faust has gained great knowledge and fame but became utterly bored as he became older. The predicted well-being is simply the same knowledge and fame. There is no excitement or thrill in the horizon. He lost the interest in finding an interesting goal in life. He became severely depressed and ready to commit suicide, until Mephistopheles suddenly appeared, offering Faust the promise to escape boredom, i.e., regain the interest in finding an interesting goal. However, there is a cost. The cost is the possible surrendering of his soul to Mephistopheles. Such surrender amounts to becoming obsessed with the goal to the point of leading a life of excessive misery, never really becoming happy. If he accepts the bargain, he gains the ability to aspire and hence potentially become happy, but there is the danger that any excessive pursuit of the goal amounts to surrendering his soul, i.e., never becoming happy. This is what makes aspiration “dialectical”, i.e., a double-edged sword [24].

To illustrate the Biblical story, imagine the decision maker calamitously loses two fingers in an automobile accident today. The individual may look at the current well-being from the counterfactual of either losing nothing, which makes the individual frustrated and sometimes bitter, or losing five fingers, which makes the individual appreciative and content. In either case, the counterfactual is the context that could have taken place in the past.

To illustrate the Faustian story, imagine the individual’s steady income with a steady job at an insurance company, with a predicted 2–3% income increase each year. The individual may look at one’s well-being from the reversed-counterfactual of either changing careers, such as becoming an actor, and possibly earning an income greater by 100%, or not trying to change careers. In either case, the reversed-counterfactual is the context that would allow the individual to experience exhilaration in the case of aspiration—or experience boredom in the case of foregoing a dream career. If the individual quits a job to pursue an acting career, one should undertake a series of actions to fulfill the goal. Otherwise, the individual would be involved in daydreaming.

3. The Proposed Conceptual Framework

3.1. Two Temporal Frames

As shown above, while Faust operates along the forward-looking time-frame, The Book of Job operates along the backward-looking time-frame. Hence, we should take the temporal dimension seriously if we want to distinguish the two facets of happiness. The key behind the distinction between the dual facets of happiness rests upon how the decision maker standing in the present faces the past as opposed to the future.

Decision makers can only exist in the present as they face the past or the future. In facing the past, Job can suppose a counterfactual past that is very negative, such as his death or the death of his wife. Such a supposition makes present well-being appear fortunate. In facing the future, Faust can suppose a reversed-counterfactual future that is very positive, full of excitement. Such a supposition goes beyond predicted well-being, i.e., a well-being that is a replication of present well-being. as stated above, this paper defines “predicted well-being” as equivalent to “present well-being” in the sense that current well-being, without the aspirational future goal, is predicted to remain more -or- less constant.

For the proposed theory, the entry point is the decision maker abstracted from society, which is the bedrock of diverse approaches in psychology, but also the bedrock of standard economics. The proposed theory relies on the most common concept in economics, “well-being”, here understood in the standard sense of “utility” that acts as a representation of preferences. The proposed theory expressly questions the modern practice that distinguishes “well-being” from “utility”. This distinction is greatly influenced by modern happiness studies [25,26]. These studies specifically view “well-being”, or what they call “subjective well-being” as a measure that captures the true and long-term interest of the individual that includes physical health, mental health, emotional stability, positive thinking, supportive family relationships, friendships, and kindness.

In this regard, these studies suppose that the standard economist’s concept “utility” or “well-being” is only concerned with satisfaction in the sense of material wealth and physical health. This is not the case, as the standard concept includes all these elements, i.e., not limited to material wealth and physical health. The standard neoclassical concept is distinguished by its insistence that whatever satisfaction a theorist fancies—ranging from the material to the aesthetic and spiritual—is reducible to a unidimensional metric, call it “utility”, “satisfaction, “the set of preferences”, or “well-being”.2

This modern literature disavows the old economic concept “utility”, as it views it about material, selfish, and myopic benefit. In this received modern literature, as shown below, there is no concept of happiness as separate from well-being or subjective well-being. Disputing this received modern framework, as shown below, the proposed framework rehabilitates the old economic concept of “well-being” as about standard “utility”—whereas such concept need not involve selfish, myopic, and material preferences—and in turn distinguishes well-being (utility) from happiness.3

Further, the proposed theory relies on some concepts from psychology, especially “context” that is used here to denote the counterfactual that enters the daily evaluation of well-being. The concept of “context” plays a great role in the psychological literature, and it should be likewise in the economics literature [4]. The proposed theory registers that the daily evaluation of well-being produces happiness (or unhappiness) because the evaluation amounts to placing “well-being” against a particular “context” that gives rise to the various kinds of happiness. Happiness, of all its facets, cannot be reduced to well-being. It is rather the product of two inputs, well-being and context, where the product can take the form of different kinds in step of the particular context employed.

As this paper studies two kinds of context, forward-looking and backward-looking, there is correspondingly forward-looking happiness and backward-looking happiness. Forward-looking happiness is the outcome of contrasting (existing and predicted) well-being against the context of an aspired counterfactual future well-being. In contrast, backward-looking happiness is the outcome of contrasting the same (existing and predicted) well-being against the context of a counterfactual past well-being. In this manner, the two contexts should not be conceived as “factors” in the standard sense of mathematical production functions. If conceived as such, the supposed contexts should enter, simultaneously and in different proportions, in determining the output (happiness). Such a conception would undermine the proposed theory. The proposed theory stipulates that each context operates at the exclusion of the other. Therefore, we have dual facets of happiness, whereas each arises separately from the other depending on the context, i.e., the time-frame, used in assessing the (existing and predicted) well-being.

3.2. The Three- vs. Two-Layer Hierarchy of Satisfaction

The proposed theory of the dual facets of happiness is based on a framework that distinguishes happiness from well-being and, in turn, well-being from the consumed goods that occasion well-being.

Prima facie, we must distinguish happiness from well-being: how could we ever make sense of the observation (Easterlin paradox) that happiness may track well-being (proxy of income) and, at the same time, it may not? That is, if income (a proxy of well-being) can in some circumstances buy happiness, but not in all circumstances, we must as a pre-requisite conceptually separate the two gauges: well-being and happiness. Failing to do so amounts to conceptually locking ourselves in a framework that must introduce many ad hoc assumptions to come to grip with the Easterlin paradox.

The proposed framework proposes a three-layer hierarchy of concepts:

i.

Goods/Income

ii.

Well-being

iii.

Happiness

This three-layer hierarchy of concepts is non-conventional. It challenges the received framework underpinning both standard economics and the field of happiness studies. The received framework involves a two-layer hierarchy of concepts:

(i)

The consumed goods, sometimes called “objective well-being”; and

(ii)

Happiness, which the standard economists call “well-being” and the psychologists and others name “subjective well-being” [30].

Most if not all standard economists subscribe to the two-layer hierarchy of concepts [27] (Chs. 1–4). Not to forget, psychologists who spearheaded the field happiness studies quickly adopted the term “subjective well-being” coined by Diener [25,31]—in distinction of the first layer, i.e., the consumed goods.

Consequently, standard economists and psychologists squeeze out the concept “happiness” as distinct from “well-being”, i.e., what is specified in the three-layer hierarchy. In the received framework, i.e., the two-layer hierarchy, the proposed term “subjective well-being” is the amalgamation of well-being and happiness. In this manner, the standard economists, similar to the psychologists, do not distinguish well-being and happiness.

Further, these economists tend to regard the newly minted concept, “subjective well-being”, to be a broader measure of welfare than “utility”—insofar as “utility” connotes basically “material well-being” such as “physical well-being”. For them, the term “subjective well-being” contains more variables such as mental health, well-reasoned preferences that care about the environment and other public goods, non-myopic preferences that forego instantaneous gratifications, and non-spurious preferences that attend to long-term well-being. However, “utility” can be dislodged from such connotations. Indeed, the widely welcomed and used term “subjective well-being” or, for short, “well-being”, in place of “utility”, turns out to be an issue of semantics and definitions, i.e., of little analytical value.

Stated differently, and here is this paper’s core disagreement with Ng [27] and other subscribers to the two-layer hierarchy of concepts, the term “subjective well-being” in contradistinction to “utility” (i.e., material or physical well-being), does not rise to the level of a theoretical distinction. The subscribers to the two-layer hierarchy effectively squash “utility” into the first layer, “the consumed goods”, while jamming well-being into the third layer, “happiness”, which they call “subjective well-being”. This effectively crushes any space that allows for the distinction between “happiness” and “well-being”—what the proposed three-layer hierarchy advances.

One can employ “subjective well-being” as a term that includes mental health, while reserving “utility” to include material and physical well-being. Such semantic employment concerns the content of the consumed goods and their outcome, the set of preferences, but cannot amount to a theoretical differentiation of the preferences. An economist can also pull from the bag other terms such as “spiritual well-being”, “sexual well-being,” “aesthetic well-being”, and so on. Such terms only signal the different content of the consumed goods and their corresponding set of preferences.

In contrast, the proposed three-way hierarchy stipulates two analytical distinctions. First, utility is the output whose inputs are the set of consumed goods. As conceived in the old standard economic textbooks, it is a subjective measure, i.e., reflecting the tastes of the person under focus. Such standard concept of utility is called here “well-being”—which hence can be subjective in the sense that different people have different utility functions.

For the second analytical distinction, happiness is the output whose inputs, as this paper postulates, are twofold: well-being (i.e., utility in its standard sense) and its particular context (i.e., the ground à la Rubin’s vase). As such, happiness is a subjective measure, similar to well-being. However, the subjectivity of happiness and the subjectivity of well-being differ. They do not lie at the same level, as happiness is the product of well-being once such well-being is contextualized, while well-being is the product of consumed goods.

In this three-layer hierarchy of concepts, there is no room for the term “subjective well-being”. It is a superfluous, if not misleading, term.

3.3. The Issue: What Makes up Preferences?

In this light, the proposed three-layer, instead of two-layer, hierarchy of concepts is orthogonal to the debate regarding what constitutes the “consumed goods” and its outcome, the set of preferences that are the basis of well-being. Most, but not all, economists consider the GDP—i.e., gross domestic product—as a good enough gauge of the relevant consumed goods, and this includes food, clothes, housing, vacations, and whatever the individual can purchase with income. Other social scientists, including many economists, maintain that the GDP measure does not adequately proxy other ingredients of human development and prosperity [27,32,33,34,35,36,37,38]. They enlarge the basket of consumed goods to include health, crime, neighborhood amenities, political stability, environmental pollution, food security, job opportunities, and even anthropometrics regarding height, infant mortality, and so on [39].

At least for some countries, GDP and the consumed goods relevant to human development do not correlate, i.e., GDP cannot act as proxy for relevant consumed goods. For the purpose of this paper, however, we can assume that GDP (income) is a proximate index of the relevant consumed goods—i.e., the goods that are relevant for human development. On this assumption, this paper can advance its framework, the three-layer hierarchy of concepts.

The proposed framework involves two innovations: the separation of well-being from consumed goods (what is basically income) and the separation of happiness from well-being. When this paper separates well-being from consumed goods, it follows the standard economist’s approach, viz., presenting well-being as a subjective function of the objective goods (income). The proposed separation recognizes that well-being varies from one individual to the next. That is, two individuals may consume the same income, but they have different subjective enjoyment as measured by well-being.

However, the separation of happiness and well-being is non-conventional for the psychologists and the economists. For the psychologists, they would rather group well-being with objective income, and regard happiness as “subjective wellbeing.” For the economists, given that happiness is also subjective, it cannot be separated from their concept of well-being, which is subjective.

As

Table 1. Income–wellbeing–happiness nexus.

	Basic Concepts	Income (Consumed Goods)	Well-Being (Subjective)		Happiness (Subjective)
Proposed Framework
Standard Economics		Income (consumed goods)	Well-being/Happiness (utility, welfare)
Happiness Studies		Objective Well-being		“Subjective well-being”

shows, the economist approach that is based on utilitarianism collapses happiness and well-being, where both are called also “utility” or “welfare,” and regarded as subjective. The psychologist treats both income and what can be an immediate objective quantity as “objective well-being”, while happiness and what might be seen as subjective quantity as “subjective wellbeing.”

Table 1 also shows that the proposed three-layers-of-concepts framework departs in a different way from the two-layers-of-concepts of the dominant framework in psychology. The two-layer framework obfuscates the difference, first, between consumed goods and well-being and, second, between well-being and happiness. These two acts of obfuscation can be traced to Diener [25] and Veenhoven [30] who promoted the concept of “subjective wellbeing.”

As a starter, “subjective well-being” is a pleonasm term—insofar as “well-being” is viewed as the standard economist utility function that is also subjective. However, there is a more important issue. The conflation of “happiness” and “well-being” may, as noted above, deprive us from the ability to account for cases when happiness does not rise with the rise in well-being, which is at the root of the Easterlin paradox.

Therefore, this paper avoids using the term “subjective well-being” or any concept conflating happiness and well-being under the term “subjectivity”—while fully aware that the term is widely popular in the literature [31,40].

3.4. The Importance of Context

Some consumption activities—as basic as eating bread, engaging in sexual intercourse, or wearing sandals—may involve exclusively the production of well-being in the sense of material enjoyment that the old standard economist’s “utility” captures well. That is, they need not produce backward-looking happiness as defined here. Indeed, such happiness arises only if the decision maker immerses the self in the consumption activities—an activity that is beyond the basic activity, i.e., the production of well-being. The immersion of the self is no different from the act of loving the activity. The act of loving or immersing the self in the activity involves smelling and tasting the bread, and not simply eating it [29]. It entails losing all the senses in sexual intercourse, and not simply gratifying a single sense. It embraces the feel of the leather of the sandals, and not simply protecting the feet from the painful pebbles. In the act of loving or immersing the self, the decision maker can produce happiness only if the basic activity is placed against a context such as thinking of the counterfactual of not having any bread, being deprived of sexual pleasure, or walking barefooted. A much worse counterfactual heightens the immersion of the self, which facilitates the production of backward-looking happiness.

With respect to the dual facets of happiness under focus here, there are two kinds of counterfactual. The first is about a past event or a state of nature regarding well-being that could have taken place but did not. The second is about a future possibility regarding well-being that one could, if one works hard enough, achieve. Such an aspired distinction or status is usually higher than the predicted/current level of well-being.

The reflection uses the counterfactual, whether of the past or the future, as the background against which to assess the current well-being. Given that the reflection uses a counterfactual, it should not be conflated with the current well-being, i.e., the object of the reflection.

The current well-being is the enjoyment of the goods consumed as captured by the old standard economist concept “utility”. The enjoyment includes the emotions associated with the comfort of relaxation. Prinz [41] expresses this notion of feeling or emotion. In contrast, as defined here, happiness consists of the emotions associated with reflection upon the current well-being:

Definition. Happiness is the feeling arising when the individual reflects on well-being where the reflection necessarily is against a context. The context can be an imagined “selected” fact from the past. It also can be an imagined counterfactual well-being that could have taken place in the past. Furthermore, it can be an imagined reversed-counterfactual that could take place in the future if the decision maker exerts him- or herself sufficiently.

That is, happiness is basically contextualized well-being, where current well-being is contrasted against imagined well-being. If put in a mathematical formula, happiness is a function, first, of well-being and, second, of the context, i.e., an imagined counterfactual or an imagined reversed-counterfactual.

While the proposed definition of happiness is non-conventional, the object of the definition is the conventionally recognized happiness phenomenon. Let us say a worker is happy with a 5% wage increase but becomes unhappy when they learn that their co-workers have received a 10% wage increase. When the worker felt happy, the context was a 0% wage increase (or any increase below 5%). When the worker felt unhappy, the context was a 10% wage increase. In either case, the product of the well-being (5% wage increase) and the context (whether a 0% or 10% wage increase) is what people recognize as happiness—what this paper specifically defines as “backward-looking happiness”.

Likewise, let us say that a father and his son are happy with the son’s aspiration to win an annual piano-playing contest at the son’s school. Here the context is the aspired goal, while the consequent feeling is what people recognize as happiness—what this paper specifically defines as “forward-looking happiness”.

While the proposed definition is non-conventional, what is being defined as happiness is what people conventionally regard as such. What is critical in this definition is the concept “context”, where happiness is nothing but contextualized well-being. The context is the frame that provides meaning to the existing fact. The meaning arises when the existing fact, such as current well-being, is placed against a selected fact from the past, a counterfactual from the past that did not take place, or a reversed-counterfactual regarding the future. Thus, by definition, context cannot be a fact—similar to how the ground cannot be a fact in Rubin’s vase [4]. To use the terminology of Rubin’s vase, the current well-being is the “figure”, while the context (imagined well-being) is the ground. Now, happiness is the outcome of such contextualized well-being: it can be either a vase or two profiles depending on the employed ground.

There are probably as many kinds of happiness as there are kinds of context. While there are numerable examples of context, the examples can be classified into a few kinds if the focus is on happiness. And they can be further classified into much fewer kinds if the focus is only on the income–happiness paradox (the Easterlin paradox) [7,8].

One can suppose that love in the sense of friendship and the feeling that cements familial and communal bonding is not, under closer scrutiny, about backward-looking evaluation and, hence, deserves to have its own context.

Also, one can suppose that hope, in the sense of wishing for a fortunate state of nature as in winning the lottery, differs from forward-looking happiness. In hope, there is no need to exert effort. In forward-looking happiness, there is a need for the decision maker to act with focus and tenacity.

Further still, this kind of hope differs from hoping for a miracle, like hoping to recover from a terminal illness. As such, belief in miracles may influence one’s state of mind—which makes beliefs in miracles still another kind of context.

While the concept of “context” is key, this paper’s focus is not a comprehensive survey of “context” per se. It is sufficient to define it. This paper defines the concept in a strict sense. The concept is about the background or the belief that is greatly the product of either the imagination or the desire to attain goals, belong to communities, or hope. Such background or belief is not usually scientific or evidence-based and, hence, cannot be the subject of Bayesian updating. Hence, “context” differs from situations, circumstances, and beliefs regarding patterns in social interactions, market trends, heuristics that ensure optimal decisions, and principles regarding rights of autonomy, property, or freedom of opinion.

This paper is restricted to dual facets of happiness and, hence, it focuses only on two kinds of context as stated above. The first context is either the selected fact or, in the case of Job, the counterfactual of being in a worse well-being that the individual uses when reflecting on the past, which gives origin to contentment. The second context is the reversed-counterfactual that the individual uses when reflecting on the future, which gives origin to exhilaration as well as misery, as in the case of Faust.

The restriction of the income–happiness nexus or, more broadly, the well-being–happiness nexus, to the dual facets of happiness is not limited to this paper. Kahneman and Deaton [42], Deaton and Stone [43], and others, also argued that there are two ways to measure happiness. They called one measure of happiness the “evaluative” kind (how people interpret their current well-being by effectively looking backward), and they named the other measure the “hedonic” kind (how people feel on a daily basis, as they try to achieve their goals).

The difference is not merely two ways of examining the same “thing”. As Deaton and Stone [43] (p. 592) recognize, the term “happiness” is rather a “portmanteau”, denoting dual facets of happiness: the hedonic kind and the evaluative kind. The hedonic kind (what this paper considers to be capturing forward-looking happiness) “respond[s] to income only up to a threshold”. This is unlike the evaluative kind (what this paper considers to be capturing backward-looking happiness).

Deaton and Stone articulate the difference:

• We look at two different ways of measuring well-being, an evaluative measure, the Cantril ladder, and a hedonic measure, daily happiness. The former invites respondents to rate their lives on a “ladder” with 11 steps, marked from 0, which represents the worst possible life for you, to 10, which represents the best possible life for you. Answering such a question requires the respondent to think about his life and interpret the question. We also look at a dichotomous measure in response to the question “Did you experience a lot of happiness yesterday?” This is one of a number of hedonic questions, which should be distinguished from the evaluative question in the ladder. Hedonic questions do not require the cognitive effort required to answer evaluative questions, they refer to different aspects of experience, and they often have different correlates. For example, hedonic measures are uncorrelated with education, vary over the days of the week, improve with age, and respond to income only up to a threshold. Evaluative measures remain correlated with income even at high levels of income, are strongly correlated with education, are often U-shaped in age, and do not vary over the days of the week … The important distinction between evaluative and hedonic well-being renders unhelpful the portmanteau use of the term “happiness,” or, indeed, subjective well-being [43] (p. 592).

Stated differently, the evaluative measure, as this paper registers, captures how people feel about their accomplishments, effectively gauging backward-looking happiness. The hedonic measure, as this paper postulates, captures how people feel from day to day as they pursue their current goal, basically gauging forward-looking happiness.4

4. Implications

4.1. The Income–Happiness (Easterlin) Paradox

As stated at the outset, the Easterlin paradox is about an inconsistency in the empirical data. These are two sets of data, each indicating a different relation between income and happiness:

1. Cross-Section Set of Data: The cross-section shows that happiness is a positive function of income. This cross-section set of data tends to delight the typical/stylized economist.

2. Time-Series Set of Data: The time-series shows that happiness is independent of income for countries that have reached a critical level of prosperity. This time-series data tends to delight the typical/stylized psychologist.

The income–happiness paradox is not that happiness may not rise with income—as is the case in rich countries. Rather, it is this fact coupled with another fact: happiness does rise with income even in the same rich countries.

To solve the paradox, as detailed elsewhere [7], we need to examine the questions behind the two sets of data along Deaton and Stone [43] as quoted above. The question can be different—which explains the contradictory account of the income–happiness nexus.

In the cross-section set of data, which pleases the stylized economist, the survey questions ask people how they feel about their life so far. These types of survey questions prompt people to pause their activity and reflect. They reflect by contrasting their current well-being against the backward-looking context of their well-being. The backward-looking context can be close to the fact. It also can be somewhat imagined, the subject of selective memory. Furthermore, it can be a counterfactual—as in the case when one loses a hand in an accident and contrasts current well-being to the counterfactual of losing the whole arm.

If the backward-looking context involves a lower level of income, as has been the case for the growing rich economies, there is an improvement. Thus, the cross-section data shows an unambiguous monotonic relationship between happiness and income: happiness will rise as long as income rises. When asked, people express contentment, clearly showing that happiness tracks income.

Such a cross-sectional set of data is more or less captured by The Book of Job—with a slight modification. Given that Job’s backward-looking context is much better than his current well-being, he is highly unhappy—and even angry to the extent of almost being ready to curse God [18]. However, God appeared to him in the form of his youngest friend, Elihu, advising him to use a counterfactual: Job and his wife are dead. Given this backward-looking (counterfactual) context, Job experiences happiness, happiness-as-tranquility. He and his wife should feel happy (happiness-as-tranquility) for being still alive.

In contrast, the time-series set of data, which pleases the stylized psychologist, is what one should expect when survey questions ask people how they feel at this moment. As detailed elsewhere [7], these types of survey questions prompt people to assess their day in relation to their goal aspiration. Given that people always have a goal aspiration, irrespective of their income, that is more ambitious than their current income, they will give the same answer about their happiness. The answer expresses happiness-as-aspiration. Given they are rational, i.e., have a reasonable level of aspired desires, they maintain the same upbeat opinion about the future. Thus, even if their current income rises from one period to the next, their aspiring goal is still ahead, usually expressing the same gap. Thus, they feel the same level of happiness-as-aspiration.

Put differently, the outcome should be happiness-as-aspiration whose level is somewhat steady, i.e., independent of income.

This time-series data set shows that there is a disconnect between income and happiness. Such an outcome expresses the struggles of Faust, making sure to choose a reasonable level of ambition that avoids the misery of boredom, on the one hand, and the misery of aspiring too high and, hence, being a “loser” on the other hand.

In Faust, there is no reference to the current level of income or stature of Faust. What matters is keeping a reasonable level of desires that assures him (positive) happiness-as-aspiration.

The only qualification, mentioned above, in the operation of happiness-as-aspiration is that people must have already reached a level of income security, i.e., do not have to worry about daily survival. The only worry for such economically secure people is the pursuit of an aspired goal, where people set up a higher goal each week or month than what has been achieved, keeping up with their achievements.

To sum-up, with the help of the Job/Faust contrast, allowing us to decipher the two facets of happiness, we can understand why there is “inconsistency” in the two data sets. It turns out that there is no inconsistency; there is no Easterlin paradox. Each set of data simply speaks to a different facet of happiness.

There are many attempts to resolve the Easterlin paradox. However, they fall short of offering solutions insofar as they fail to recognize the two facets of happiness. For example, the “relative income hypothesis” proposed initially by Duesenberry [45,46] basically focuses on the level of aspiration, as proxied by relative income, which succeeds in capturing only happiness-as-aspiration. It ignores the role of the change in absolute income that impacts happiness-as-tranquility [47].

Indeed, another theory, called “set-point theory” [48,49], explicitly argues that events in the past have no long-term impact on happiness. If one loses a limb, one would not be impacted negatively in the long term. Thus, similar to the relative income hypothesis, the advocates of set-point theory simply do not see a link between happiness and well-being.

There are sophisticated versions of set-point theory, such as the one advanced by Kahneman [44]. However, as detailed elsewhere [8], at least Kahneman’s version does not succeed in solving the Easterlin paradox.

4.2. Other Implications

The proposed dual-facet theory of happiness sheds light on the just-world hypothesis [50]. This hypothesis proposes that people feel entitled to a certain level of well-being, as they have behaved properly and effectively in the past and, as a corollary, use such entitlement as the context to assess realized (current) well-being. The just-world hypothesis expresses the use of a better counterfactual than the realized well-being to generate negative happiness-as-tranquility. However, as this paper shows, the just-world hypothesis cannot be the only word on backward-looking assessment: humans can use a worse counterfactual than the realized well-being to, instead, generate happiness-as-tranquility.

Furthermore, the proposed theory highlights the difference between complacency and contentment. Complacency is the decision not to desire a station higher than one’s predicted well-being. It amounts to choosing a club that does not pose challenges to the self. In contrast, contentment is the act of posing a worse counterfactual that propels the individual to count one’s blessings. While complacency is a forward-reflection strategy where inaction is rather a source of lethargy and sloth, contentment is one of backward-reflection, where inaction is not even pertinent.

Moreover, the proposed theory allows us to delineate jealousy and envy. As defined here, jealousy amounts to the pain that one might derive from comparing one’s well-being to a peer’s higher well-being. The gap gives rise to misery, as this paper discusses. The person derives pleasure from closing the gap either through effort, as this paper discusses with respect to adopting an aspired goal, or through income re-distribution along the lines of social justice, which this paper does not discuss. Jealousy turns into envy if the person wishes to narrow the gap through the destruction of the other’s resources, i.e., without anyone necessarily gaining any portion of the resources.

Jealousy can be a positive emotion, as it propels the decision maker to close the gap without any destruction of resources. In contrast, envy cannot be a positive emotion, as it involves the desire to close the gap by destroying the resources of the other.

5. Conclusions

Thinking about Faust, or the happiness-as-aspiration facet, ancient Greek philosophers recognized that heroism stems from the tenacity of the individual to undertake tasks judged to be almost impossible. Plato, for example, called such aspiration-as-heroism “thumos.” Similarly, in Nichomachean Ethics, Aristotle regarded eudaimonia as the outcome of an individual’s aspiration to flourish and fulfill one’s capabilities, given the necessary condition of fulfilling virtuous obligations [40,51]. While this paper does not employ the rather catch-all phrase “virtue,” it follows Aristotle by identifying happiness with the act of aspiration to flourish and achieve greater outcomes.

As this paper shows, Faust demonstrates that happiness-as-aspiration is not an easy endeavor. First, it necessarily involves misery, as it entails a gap between what one has and what one desires. Second, if an individual is not careful, one can be driven by ambition to the point of obsession, becoming the slave of the devil.

Thinking about The Book of Job or the happiness-as-tranquility facet, ancient Greek philosophers, starting with Zeno and reaching maturity in Stoic philosophy, stressed the role of contentment and equanimity. They recognized how one’s failure to be satisfied with one’s lot might lead to anger, if not bitterness.

As this paper shows, The Book of Job reveals that happiness-as-tranquility is not an easy endeavor. First, Job came close to becoming angry at God and slipping into bitterness, failing to realize the role of luck. Second, if one’s luck is good, one must recognize that one’s success is at least partially the outcome of luck. Otherwise, one would slip into self-conceit, smugness, and self-aggrandizement.

The key that underpins the difference between happiness-as-aspiration and happiness-as-tranquility is the role of time in setting the context: is the individual evaluating predicted well-being with respect to a context consisting of an aspired future state, or is the individual evaluating realized well-being with regard to a context consisting of a past state, whether a selected fact or counterfactual? In everyday reflections, the individual ponders the predicted well-being against a reversed-counterfactual, and ponders the realized well-being against a selected fact or counterfactual event of the past. Indeed, the individual may undertake both evaluations within the same hour or minute. Thus, it is imperative to be aware of the two contexts, the two temporal frames of reference, as researchers study human happiness. This is a challenging task, but imperative if we want to get a grip on the question of human satisfaction and solve the Easterlin paradox.