Bryan Caplan says:
The view that money has a major effect on happiness is ideologically convenient for me. But it goes against first-hand experience, the wisdom of the ages, and the rightly interpreted empirical evidence. So to hell with ideological convenience.
I find this admirable, but puzzling. A libertarian surely doesn't need a view on which goods (other than freedom) makes us happy. All he needs is a framework in which people are free to pursue whatever ends we want - whether those ends be money or whatever. As Robert Nozick wrote:
Utopia will consist of utopias, of many different and divergent communities in which people lead different kinds of lives under different institutions.
I fear, though, that there's a reason why libertarians might find it convenient to think that money makes us happy. It's because actually-existing capitalism does not give us Nozick's Utopia, which means there's a tension between supporting liberty and supporting capitalism. If, however, you think that money gives us happiness, then this tension weakens.
Here's what I mean. Capitalism has totalitarian tendencies, in the sense that it squeezes out (other) utopias. For example:
- Most of don't have outside options; we can't live off our savings or inheritances or on our smallholding. We are therefore compelled by circumstance to enter into capitalist relations to earn our living. This curtails our freedom to pursue other lifestyles, such as a love of arts and music or caring for others.
- As Richard Sennett has suggested, flexible capitalism can undermine stable communities.
- Capitalism prioritizes the goods of effectiveness (money and power) over those of excellence. This creates a society of "trampling, crushing, elbowing, and treading on each other's heels", which many of us would prefer not to live in.
These tendencies are awkward for a right-libertarian wanting to defend actually-existing capitalism. So, what can he do? One line of attack is to say - with much justification - that capitalism has provided more freedom (both formal and substantial) for more people than any hitherto-existing form of society. But this runs into the Marxian objection that a post-capitalist society could do even better.
This leaves Bryan's instinctive answer. If you believe that money makes us happy, then you can argue that, in depriving us of alternative lifestyles but delivering the physical goods, capitalism isn't really imposing much of a loss upon us, because it's giving us what makes us happy, what we'd choose anyway.
There is, though, a third option here. It's to recognize that capitalism and real freedom aren't wholly compatible, and to look for economic institutions - of which a basic income is one - which better promote freedom. Libertarianism and Marxism have much in common.