"No satisfaction based upon self-deception is solid, and however unpleasant the truth may be, it is better to face it once for all, to get used to it, and to proceed to build your life in accordance with it."
Is self-knowledge necessary for happiness? Bertrand Russell apparently thought so. So did the Oracle at Delphi in ancient Greece, where the phrase "Know Thyself" was purportedly etched into the temple. More recently, the Dalai Lama co-authored a book titled "How to See Yourself as You Really Are", so presumably he thinks self-knowledge is important for happiness, too.
I'm not so sure. It's not that I think self-deception is good, I just think it's an empirical question whether self-aware people are happier. I can think of many reasons why self-knowledge might lead to greater happiness. For example, self-aware people might make better decisions (e.g., where to live, what career to pursue, whether to have kids) and they are probably more pleasant to be around as friends, coworkers, and family members. But I have to admit that I often find myself envying the blissfully ignorant, and I can't help but wonder whether self-knowledge is worth it.