Economics of Love, Life, and Happiness

1. Economics of Love, Life, and Happiness Lok Sang Ho Economics Department Lingnan University December 2, 2010 HK IEd.

2. What is Love Love is an aspiration from deep inside: An aspiration that the loved one will live a life free from worry; A wish that the loved one will realize one’s full potential and will enjoy a rich life: Away from danger and ever joyful. 愛是源自內心的一個願望 盼望對方有安穩無憂的生活 盼望對方衝破界限盡展潛能 體現豐富的生命 趨吉避凶 幸福快樂

3. 純淨的愛不夾雜其他 廣博的愛澤及一切生命 頑強的愛歷久常新百折不撓 忘我的愛不惜犧牲一切 愛是對生命的認同 捨此並無他愛 A pure love is free from self-interest considerations; A broad-minded love benefits all; An enduring love is ever so new; A selfless love knows no sacrifice too big. Love always stems from identifying with Life . There is no other kinds of Love.

4. Love is unconditional and certainly not an exchange. Love requires nothing in return. Love is the strongest motive. Love often begins with a relationship. Yet it must transcend that relationship. Love is a Blessing from the Heart.

5. 敬愛生命… 愛己如愛他人, 愛始自自愛， 先學會愛護自己的生命， 再愛護自己的家人， 再愛護一切生命。 Have Reverence for Life… Love others as you would love yourself. Love must begin with self Love, Learn to love your own life, Then learn to love your family, Then learn to love all forms of life,

6. Ｌ+Ｉ+Ｆ+Ｅ = Happiness Ｌ即　Love, 愛心 Ｉ即　Insight (wisdom), 智慧 Ｆ即Fortitude, 堅毅 Ｅ即　Engaging, 投入（行動）

7. Love, but why Love Economics? • Economics can be called Study of Wisdom • Economics is about choices、balancing、optimizing；Rational Choice is the basis of Utility Maximization • Yet…..

8. There is a lot of misunderstanding about Economics • Some think that Economics is about economic benefits ignoring social benefits • Some think economists have their eyes on GDP but not Happiness • Some think economics is all about money, but not about humanity • But actually Economics is very practical, offering answers or at least a useful approach to answering many problems that we encounter in our daily lives.

9. Important concepts of economicsthat are really useful:

10. Sunk Costs: what we need to leave behind as we look forward to the future • Some people may have invested too much of their time and emotion in a relationship, so that they are heart broken and keep thinking about the past, even though the relationship is finished. • Some people keep thinking about the cost of their investment, and cannot make the decision to terminate a money losing venture. • A bygone is a bygone. Nothing can change the fact. We need to learn to leave it behind and face a new day.

11. Marginal Thinking • For every decision, there is a cost and a benefit that arises from that decision. Comparing the marginal cost and marginal benefit arising from that decision is the basis of rational decision making. • The Chinese emphasize the need to know where to stop知止. The idea is that going overboard is like not going enough. Good things can turn into bad when the point of optimality is passed. As long as Net Marginal Benefit is positive, however, more is better.。

12. Opportunity Cost: • Weighing what you will get against what you will give up(the opportunity cost) when you pick a path of action is the basis of rational decision making. • There is something to give up whatever you do.

13. Benefit, Utility, Happiness;Material Goods; Mental Goods • Benefit has to be the benefit toward enriching one’s life, or the benefit of enriching someone else’ life. The quality of life is the ultimate concern for every single decision. • The quality of life has two components: physical goods and mental goods. • Physical goods are rival. What you consume becomes no longer available to someone else. • Mental needs are often satisfied via the consumption of physical goods, such as conspicuous consumption. • But it is possible that one can satisfy one’s mental good needs while also benefiting others. Such happiness is more enduring and benefit more people. ；

14. Key mental goods • Sense of security(as opposed to sense of insecurity or threat) • Self esteem • Sense of achievement or success • Autonomy and freedom (as opposed to enslavement) • Being accepted by others (as opposed to being marginalized or rejected) • Love (as opposed to hate) • Generosity (as opposed to jealousy)

15. Profit and Utility Maximization • Profit gained can bring benefits to oneself and to others • The process of making profit can benefit others but also can hurt others • Not profitable is not the same as not worthwhile • Low wages does not imply low productivity • Utility has to be based on the longer view. Sustainability is a concern. • Taking the longer view takes the centre stage in Love Economics.

16. Means and Ends工具与目標 • A rich and meaningful life is the ultimate source of joy and satisfaction. Don’t forget that. • Chasing after profits and fame but hurting the quality of life is taking means for ends. • Treasure each day, take advantage on all means available to you, and realize a rich and meaningful life is the practice of Love Economics.

17. Capital資本 • Capital in economics originally means produced means of production. It is an accumulated asset. • In the economics of life, positive capital is everything that we accumulate which may enrich life and in particular the wisdom that we have learnt through day to day living. • Human capital is the accumulation of skills so we can be productive in the economy • Psychological capital is the accumulation of skills and capacity so we can produce the mental goods we need • Spiritual capital is the accumulation of wisdom so that we have the capacity to transcend the day to day ups and downs in life, take life as a whole, transcend marginal calculations, and take a truly holistic view toward life. • Social capital is the accumulation of the capacity of collective action and cohesion, so that a community becomes stronger, more cohesive, and able to achieve greater things together.

18. Negative psychological capital is a liability • While we can accumulate positive psychological capital, we are all prone to accumulative “negative psychological capital” • Negative psychological capital is a habit of generating negative emotions that we have acquired through day to day living. It makes us prone to becoming self centred, jealous or envious, angry, self deceiving, anxious, insecure, etc.

19. Insight from the Daodejing The Sage desires to be free of desires, so he will not value goods that most people value; He learns to unlearn, so he will value things that most people do not value 是以聖人欲不欲，不貴難得之貨，學不學，復眾人之所過。以輔萬物自然而不敢為 (chapter 64)

20. Daodejing chapter 48 為學日益，為道日損。 損之又損，以至于無為。 As we learn we accumulate more and more in the mind; To tread the Dao, however, we take things out of the mind. As we take more and more things out of the mind, We finally arrive at the state of losing the sense of contriving. At that point we will be in the state of non-action. At that point all actions will be done in the state of non-action. Unloading all the negative capital, we will see our original mind.

21. 致虛極，守靜篤。萬物并作，吾以觀其復。夫物芸芸，各復歸其根。歸根曰靜，靜曰復命。復命曰常，知常曰明。(ch. 16) Be after the Truthfulness of Emptiness; Stick to the absolute stillness of the mind. You will see all the living things around you in a new light. You will observe their real, original faces. All things under heaven with their diversity shall fall back to their proper places and shall rediscover their origins. Going back to one’s origin is the same as stilling the mind. It can also be known as the Rediscovery of Life. The Life Rediscovered is the Eternal. Knowing the Eternal is true understanding.

22. The Mystery of the Happiness Formula Wait a minute…Will play automatically…

23. Ｌ+Ｉ+Ｆ+Ｅ = Happiness Ｌ即　Love, 愛心 Ｉ即　Insight (wisdom), 智慧 Ｆ即Fortitude, 堅毅 Ｅ即　Engaging, 投入（行動）

24. Love is an aspiration from deep inside: An aspiration that the loved one will live a life free from worry; A wish that the loved one will realize one’s full potential and will enjoy a rich life: Away from danger and ever joyful.

25. A pure love is free from self-interest considerations; A broad-minded love benefits all; An enduring love is ever so new; A selfless love knows no sacrifice too big. Love always stems from identifying with Life . There is no other kinds of Love.

26. Love is unconditional and certainly not an exchange. Love requires nothing in return. Love is the strongest motive. Love often begins with a relationship. Yet it must transcend that relationship. Love is a Blessing from the Heart.

27. Have a Reverence for Life, loving yourself as much as you would love others. Love starts with loving yourself…your life… Then extending to your immediate family… Then extending to all forms of life.

28. Good is the one who treads the Way and the Truth; Great is the ambition that is consistent with the Way. Sutra of Forty-Two Chapters

29. Life… Splendor amid Confusion.

30. A mistake would be no more than a momentary regret… if only the reflective mind turns it into wisdom..

31. To the initiated: Every day is just as wonderful.

32. Indulgence and Freedom People take indulgence for freedom. But they lose freedom being indulgent. They think they are looking for freedom; But unwittingly they have given up freedom. As the indulgent mind takes over, The free mind is gone. Emptiness and agony follow. A never-ending enslavement of the mind follows.

33. Forever fearless, Fight against all odds.

34. Forever Forever composed and relaxed, Forever friendly to yourself Forever keeping direction toward the Light Forever refusing to fall into the trap. Forever trusting, Forever hopeful, Forever seeking your true self.

35. In Memory: To the loved ones who had lived in war and died in war: Let a prayer of love, hope, and peace-- A gentle flower from the heart Bless them Forever.

36. The freedom to love, The courage to live: The world may fall apart, and the earth may shift. These shall never change, I hear a voice from above.

37. Freedom Everywhere I go I make it my home; To be a free man, I make it my dream.

39. written August 20, 2007, Takayama Japan 平心度歲(Pingxin Dusui)（寫于日本高山，2007年8月20日） Letting the years go by while keeping a tranquil mind 心平如靜水，懷暢似詩仙， 得失同江月， 悠悠度歲年。 With a mind level and calm like water in a well,And a sense of freedom as enjoyed by fish in a mountain stream,Take gains and losses no different from the moon in a pond;Watch the years flow, like scenes in a dream.

40. 快樂方程式 Happiness Formula = LIFE

41. Measures of prospective happiness 未來 Disagree or agree (scale of 0 to 10) I meet everyday with excitement and joy 我以興奮的心情迎接每一天 I do not usually worry about the future 我對未來並不憂慮 I expect to continue to learn more things in the rest of my life 我期待不斷學習 Measures of happiness in process 現在 Disagree or agree (scale of 0 to 10) I enjoy my work/housework.我享受我的工作（包括家務） I enjoy the time with my family.我享受與家人相處的時間 I find much interest in my living. 我從生活中找到很多樂趣 Measures of retrospective happiness 過去 Disagree or agree ( scale of 0 to 10) Looking back, I am satisfied with the things done by me. 回首過去, 我滿意自己所做過的事 I have grown wiser because I am able to learn from my mistakes. 我從錯誤中學到很多，智慧漸長 Looking back, there is nothing regretable. 回首過去, 沒有使我十分遺憾的事情

42. Regression Analysis (迴歸分析) Dependent Variable: 快樂指數(max=10) 快樂由人生三部份組成：現在， 過去， 未來 ** & *** indicate 5% & 1% statistical significance R bar square: 0.412 F-statistics: 185.136*** 统計上, 那個人生三部份對快樂指數影響較大? 現在組成部份>過去組成部份> 未來組成部份 For someone with 10 for each of the 3 components, Happiness Index=1.70+1.64+3.50+2.77=9.61

43. Dependent Variable: 快樂指數(max=10) 按年齡劃分的廻歸分析 Coefficient (t-statistics) ** & *** indicate 5% & 1% statistical significance

44. 按年齡劃分, 不同快樂組成部分的平均得分(最低0分, 最高10分) mean (N)

45. Happiness Formula 快樂方程式 : = L I F E L = LOVE 關愛 I = INSIGHT 智慧 F = FORTITUDE 堅毅 E = ENGAGEMENT 行動

46. Measures of Love 關愛 Disagree or agree ( scale of 0 to 10) I very much care for my family 我十分關心我的家人 My family members care for me very much我的家人十分關心我 Measures of Insight 智慧 Disagree or agree ( scale of 0 to 10) Success means doing the best I can, even if the outcome fails to impress others. 只要盡了自己的力量, 不論結果如何, 亦屬成功 IfI have acted in good conscience, then I do not care about how others think of me. 只要光明磊落, 就不用理會別人如何評價自己 I am comfortable with myself and will not be troubled by my inadequacies. 我接受我自己，不會因自己的不足而煩惱

47. Measures of fortitude 堅毅 Disagree or agree ( scale of 0 to 10) In the past, I would persist regardless of difficulties. 過去當我遇上挫折時, 都能堅持下去。 In the future, I will persist regardless of difficulties. 將來我遇上挫折時, 一定會堅持下去。 Measures of engagement 行動 Disagree or agree ( scale of 0 to 10) I strive for opportunities to learn and develop my potential. 我爭取機會學習盡量發揮所長 I have clearly identified goals and purposes in life. 我有清晰的人生目標

48. Regression Analysis (迴歸分析) Dependent Variable: 快樂指數(maximum 10) (Without controls) For 10 marks of each component, Happiness Index = 1.48+1.95+1.66+1.87+1.94=8.9 R bar square: 0.339 F statistics: 100.858*** **& *** indicate 5% and 1% statistical significance respectively

49. Regression Analysis of the Happiness Formula 2010 Dependent variable: Happiness Index (Scale of 0 to 10) (with controls) R bar square: 0.359 F-statistics: 21.903*** (***indicates 1% significance)

50. Regression Analysis 2 of the Happiness Formula 2010 Dependent variable: Happiness Index (Scale of 0 to 10) (with voluntary work added to the controls) R bar square: 0.368 F-statistics: 20.469*** (***indicates 1% significance)