The session examines how economics might be reoriented toward human happiness, cooperation, and social welfare rather than treating income growth and self-interest as its primary goals. Richard Layard argues that while competitive markets have greatly increased material living standards, happiness in wealthy countries has not risen correspondingly because people compare themselves with others and because many of the most important sources of well-being—trust, relationships, mental health, and social connection—lie outside the marketplace. The Dalai Lama emphasizes that societies place too much value on money and too little on inner well-being, mutual respect, trust, and constructive forms of cooperation and competition. William Harbaugh shows that market mechanisms can harness self-interest effectively but fail when important benefits, such as helping the poor, are public goods. His experiments suggest that giving activates brain reward systems and that people balance costs to themselves against benefits to others, while “warm-glow” altruism may motivate charitable action more effectively in large societies than purely other-regarding concern. Ernst Fehr then demonstrates that many people are conditional cooperators who contribute when others do likewise, but cooperation can collapse in the presence of persistent free riders; appropriately designed institutions, social norms, education, and prosocial sanctions can reverse this decline and sustain public goods. Overall, the discussion suggests that a flourishing economy requires both compassionate individuals and institutions designed to channel self-interest toward cooperation, trust, and shared well-being.

• Dialogue 20
  5 sessions
• April 10, 2010
  Kongresshaus, Zurich, Switzerland
• ML20-session-3_FINAL.stamped_doc |docx|
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