Diminishing Returns to Income, Companionship – and Happiness

From philosophical and intuitive sources, I find three goods that should serve as ultimate ends in assessing a high quality of life: subjective well-being, human development, and justice. With acknowledged plural ends (we use them whether we acknowledge them or not), each takes its value from its scarcity relative to the other two – a version of diminishing marginal utility. Contrary to economists' belief that income (together with leisure) is the source of all “utility”, evidence shows that companionship, which does not pass through the market, has higher “utility” and contributes more to well-being than does income. But if money income has diminishing marginal utility, so does this competing good, companionship. With arguments drawn from the meaning of happiness, I show that happiness, too, may have diminishing marginal utility and that often it must rely for its hedonic and social value on such other goods as human development and justice.