The American Dream is summarized in the Declaration:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.
This is elaborated in the Constitution, and summarized in the Preamble:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
It is evident that both national security and a legal system based on order and justice are prerequisites preserving life and liberty, and that a democratically elected government responsible to the people is required to ensure that the benefits of good government are extended to all.
But the meaning of "the pursuit of happiness" is less clear. Speth lays out the different visions of happiness that have shaped political interpretation of it.
This is key for macroeconomics, especially, since it deals with government as a key economic factor. Accordingly, the conception of the purpose of both life and government underlie the assumptions of a macroeconomic theory, since macroeconomists shape their theories with an eye to policy formulation. Economic theories and especially macroeconomic theories can be viewed as providing the rationale for policy proposals that are normative through and through, in spite of being disguised as being entirely positive, e.g., neoliberalism.
Therefore, economics presupposes views of metaphysics as the study of what is, epistemology as the study of what we can know about what is, ethics as the study of what we ought to do about what is, and aesthetics as the study of how we should feel about what is, in addition to using science as an empirical method of testable explanation of how things stand and change state, and what this may imply causally.
Without a critical approach to economics through the philosophy of economics as a method for clarification of assumptions and other aspects of thought and language that remain implicit, economic reasoning is not only unclear but can also be misleading.
For example, there is growing interest in examining the assumption that growth is an adequate criterion for economic progress when it may not be related to happiness. Happiness is an ambiguous concept, so it must be clarified first. On examination, Speth shows, growth as an economic criterion is based on a conception of happiness that well-defined in terms of the survival of the fittest. Therefore, "growth" as a criterion can be determined by GDP change, regardless of distribution. This is the neoliberal assumption that has become conventional wisdom.
The problem with this is that the US has the largest GDP globally, but it is the lowest in many key social indicators that involve happiness considered as "utility," i.e., relative material satisfaction. On many measures, the US is not the happiest nation on earth, "American exceptionalism" notwithstanding.
A key concept of Modern Monetary Theory is public purpose. Certainly, this must relate to the founding documents, and in particular to key statements from those documents cited above.
How then should MMT define itself wrt "the pursuit of happiness"?
The neoliberal view is that maximum utility is the criterion of action, presuming homo economicus to be a rational actor pursuing self-interest and capable of being modeled econometrically in terms of a representative agent. This is presumed to be self-evident, but it is contradicted by research in both cognitive and social science, as well as having been dismissed as actually irrational by thinkers for millennia because it overlooks the inherently social nature of human beings.
Maximum utility is based on methodological individualism. It is called "methodological" because the assumption of self-interest as the guiding principle of human motivation is a methodological presumption. However, this presumption is often if not generally presumed to be ground in ontological individualism, that is, that individualism is constitutive of human nature. Some economists leave this implicit, while others, especially the Austrian School, make it explicit.
Others claim that such presumptions ignore society as a complex web of relationship, involving interdependence in modern societies, and now global society. This is called "community," and it is the meaning of "fraternity," in the Enlightenment political ideal of "liberty, equality and fraternity." Now "fraternity" is called "solidarity in Europe.
Modern Monetary Theory based itself on a broader view of methodological individualism than neoliberalism or Austrian economics, in that it agrees that individuals are the elements in complex social system, and explanation must be ultimately grounded in causal mechanisms that stem from individual action. However, it accepts that other factors are at work in shaping individual decisions other than rational self-interest as generally conceived by methodological individualism that presumes ontological individualism. Ontological individualism is an oversimplification of human complexity.
According to MMT, the purpose of government is public purpose, that is to say, government is to serve the public interest rather than dominant private interest groups. The public interest is distributive. Economic happiness is only one aspect of human happiness and it involves prosperity.
Microeconomics is about prosperity of households and firms, whereas macroeconomics is concerned with the prosperity of entire societies and in the age of globalization, with global prosperity. At the macro level, prosperity is necessarily distributed. Public policy is about achieving this distribution through government pursuit of public purpose, which complements the pursuit of private purpose by individuals and interest groups, such as firms.