Again, I still think the same: filling people will silk or gold isn't going to make them forget their kinsmen were lined up and shot.
It's an abstraction from one generalisation; to wit, that comfortable people are generally happier than uncomfortable people. Questioning it at the level you do is fine on philosophical grounds, but I do not think that level of realism is relevant to a critique of the mechanism as a game mechanic.
Secondly, didn't you earlier argue that more complexity is a good thing?
It depends on the complexity. I have argued strongly against the Civ IV unit promotion system in the past, for example, because it is complexity at that tactical level of having to think about individual units in combat, rather than at the logistical level of running a whole nation. I strongly favour fixed governments over civics.
Additionally, I don't see how ideology affects this. A liberal might think Nationalism is silly but still recognise that it causes strife. Capitalists realise that anti-globalisation protesters exist, and that unions do strike, even if they think they shouldn't. Authoritarians recognise that Amnesty does write letters, and people go on hunger strikes, and socialists also know that people like having consumer goods, and dislike arbitrary controls. This section isn't to do with what ought, it's to do with what the populace thinks ought.
I think you miss my point.
Ask a libertarian what's going to make people most happy, and they will say freedom. Ask a social democrat, and they will say peace, order, and good government. Ask a dedicated follower of Trotsky or a neoconservative and they will say something else again. I think trying to implement any half-way complicated model of what does and does not make people happy, in Civ, is going to risk failing for players of any political persuasions other than that of whatever the model assumes, in exactly the same way that implementing differences between religions risks failing for people who believe in the religions in question, and that's something I would like to see Civ avoid.